Indebtedness

THE CHIEF EXECUTIVE OFFICER RECOMMENDS:

That the Chicago Board of Education ("Board") amend Section 404.2, Indebtedness Policy.

PURPOSE:

This policy establishes procedures for the Board to ensure that individuals and vendors that are doing business with the Board comply with court-ordered child support obligations and parking ticket violations by leveraging the Board's procurement authority.

POLICY TEXT:

I. Definitions

"Bid contracts": All city contracts let by a competitive bidding process as set forth in Illinois Compiled Statutes, 105 ILCS 5/10-20.21.

"Bidder": any person who submits a bid for a bid contract.

"Board": the Board of Education of the City of Chicago, but also includes its departments, operational elements and schools, Chicago Public Schools, and School District 299.

"Contract": any agreement or transaction pursuant to which a contractor (i) receives Board funds in consideration for services, work or goods provided or rendered, or (ii) pays the Board money in consideration for a lease, or license allowing it to rent or otherwise use Board property.

"Contractor": the person to whom a contract is awarded.

"Court-ordered child support arrearage": that the Circuit Court of Cook County has issued an order declaring the respondent in arrearage on his or her child support obligations in a specific amount as of the date of that order.

"Debt": a specified sum of money owed to the Board, the State of Illinois Student Assistance Commission, the City of Chicago or the County of Cook for which the period granted for payment has expired.

"Outstanding Parking Violation Complaint": a parking ticket, notice of parking violation complaint on which no payment has been made or appearance filed in the Circuit Court of Cook County within the time specified on the complaint.

"Potential contractor": any person who is seeking to enter into a contract other than a bid contract.

"Substantial Owner": any person who owns or holds a ten percent (10%) or more percentage of interest in any bidder, potential contractor or contractor, as revealed by the disclosures required by the Chief Procurement Officer, including those shareholders, partners, beneficiaries and principals more specifically described therein; except that where the bidder, potential contractor or contractor is an individual or sole proprietorship, substantial owner means that individual or sole proprietorship.

II. Provisions Pertaining to Employment

Compliance with Parking Violation Obligations

1. Every person who is given the offer of employment with the Board shall file an affidavit with the Chief Talent Officer disclosing any debt owed by the applicant and any outstanding Parking Violation Complaint issued to any vehicle owned by the applicant prior to his or her appointment.
2. No person who is given an offer of employment with the Board and has outstanding Parking Violation Complaints or debts shall be hired by the Board unless payment of the fines for the violations has been made or until an appearance is filed with the Circuit Court of Cook County to contest the parking violation or, in the case of debts, until payment is made in full.

3. Nothing herein shall prohibit the Board from hiring a person who owes a debt or outstanding Parking Violation Complaint if the Chief Talent Officer determines that such person:

   1. Has entered into an agreement with the Board or any entity mentioned in Section I, for the payment of all debts owed and is in compliance with the agreement; or
   2. Is contesting liability for or the amount of the debt in a pending administrative or judicial proceeding; or
   3. Has filed a petition in bankruptcy and the debts owed are discharged in bankruptcy.

III. Provisions Pertaining to Bidders and Contractors

• Compliance with Child Support Orders

  1. Every bidder shall be required to submit an affidavit disclosing (1) any delinquencies by any of its substantial owners on a court-ordered child support arrearage and, (2) if any exist, whether the substantial owner has entered into a court-approved agreement for the payment of all child support owed and is in compliance with such agreement. In addition, every potential contractor shall submit such an affidavit prior to execution of any contract.
  2. With respect to bid contracts, where the affidavit shows that a substantial owner of a bidder is delinquent under Section III (A) (1) and has not satisfied the obligation pursuant to the terms of that section, the Chief Procurement Officer shall add eight percent to the bidder's bid price. This eight percent shall increase the bidder's bid price for the purpose of canvassing the bids in order to determine who is the lowest bidder. This eight percent penalty shall apply for purposes of comparing bid amounts and shall not affect the amount of any contract payment. The provisions of this subsection shall only apply where not otherwise prohibited by federal, state or local law.

  3. In addition, where the Chief Procurement Officer otherwise determines that a bidder, or a substantial owner thereof, is delinquent on a court-ordered child support arrearage, the foregoing eight percent penalty shall be applied; provided that such penalty shall not be applied if, where practicable, the purchasing agent notifies the bidder of such determination and, prior to the Chief Procurement Officer's awarding of the contract, the bidder promptly provides the Chief Procurement Officer with sufficient evidence of the following:

     1. As of the date the bid was submitted, the substantial owner had paid all child support then due under the court order, as evidenced by a certified court order or certified clerk's record that no support was due and owing on that date; or
     2. As of the date the bid was submitted, the substantial owner had entered into a court-approved agreement for the payment of all child support owed and was in compliance with such agreement.

  4. The Chief Procurement Officer or designee is hereby authorized to do the following:

     1. investigate the child support payment records of any substantial owner to determine court-ordered child support arrearages;
     2. provide information on substantial owners to the appropriate Cook County and State of Illinois governmental entities, to the extent allowed by law, to assist those offices in enforcement of child support obligations;
     3. provide the names and business addresses of substantial owners to persons seeking to enforce court-ordered child support arrearages, on the condition that such information be used solely for the purpose of assisting in child support enforcement; and
     4. to promulgate regulations relating to the operation of this section.
  5. If the Chief Procurement Officer determines that a bidder, potential contractor or contractor, or a substantial owner thereof, has made a misrepresentation to the Procurement Department regarding compliance with any child support order, or if the Chief Procurement Officer determines that a contractor more than once has submitted affidavits showing a substantial owner's unpaid court-ordered child support arrearage, the Chief Procurement Officer shall notify that bidder, potential contractor or contractor that it and the substantial owner thereof shall be referred for debarment from contracting on additional contracts for a period of three years, as provided under the Board's Debarment Policy Section 401.6. The bidder, potential contractor or contractor shall have the opportunity to seek reconsideration of such ineligibility by submitting to the purchasing agent sufficient evidence that: (1) the substantial owner is no longer affiliated in any way with the contractor, bidder or potential contractor; or (2) the substantial owner no longer has any outstanding child support arrearages, as evidenced by a certified court order or certified clerk's record that no support is due and owing; provided that, where the ineligibility is based on a misrepresentation, such payment in full shall not be reason to suspend ineligibility unless the Procurement Officer also determines that such misrepresentation was inadvertent; or (3) the substantial owner was not an obligor under a court-ordered child support arrearage at the time of the alleged misrepresentation.
  6. The Chief Procurement Officer shall have the authority to suspend the ineligibility of a bidder, contractor or potential contractor for the foregoing reasons, using the procedures set forth in Section III (A) (5).