While I was rooting around in hotel agreements, the following provisions caught my eye.
First Example
This was in a contract between a hotel and some instrumentality of Tennessee state government:
The HOTEL certifies, under penalty of perjury, that to the best of its knowledge and belief the HOTEL is not on the list created pursuant to Tenn. Code Ann. § 12-12-106 (Iran Divestment Act). The HOTEL further certifies that it shall not utilize any subcontractor that is on the list created pursuant to Tenn. Code Ann. § 12-12-106.
The statute in question says that anyone who is on the state’s list of persons engaging in investment activities in Iran is ineligible to contract with the state, and that if the state has entered into a contract with any such person, the state must terminate that contract.
Because the list is publicly available, whichever state entity is signing a contract with a hotel would be able to check for itself whether the hotel is on the list, so I’m not sure the first sentence is necessary. Mind you, the idea of a hotel engaging in investment activities in Iran is preposterous. The statute doesn’t attempt to address investment by affiliates.
The second sentence goes beyond what the statute requires, so someone must have felt particularly strongly about this issue.
Second Example
This was in the same contract:
In compliance with the requirements of Tenn. Code Ann. § 12-3-309, for any contract for goods or services purchased by [government agency], HOTEL hereby attests that it shall not knowingly utilize the services of an illegal immigrant in the performances of this Agreement and shall not knowingly utilize the services of any subcontractor who will utilize the services of an illegal immigrant in the United States in the performance of the Agreement.
That’s because the statute in question says the following:
After January 1, 2007, no person may enter into a contract to supply goods or services to a state governmental entity without first attesting in writing that the person will not knowingly utilize the services of illegal immigrants in the performance of the contract, and will not knowingly utilize the services of any subcontractor who will utilize the services of illegal immigrants in the performance of the contract.
Third Example
This was in another hotel agreement:
Pursuant to Section 231.006, Texas Family Code, Hotel certifies that it is not ineligible to receive the award of or payments under this Agreement and acknowledges that this Agreement may be terminated and payment may be withheld if this certification is inaccurate.
This statute targets child-support deadbeats and any business of which a deadbeat “is a sole proprietor, partner, shareholder, or owner with an ownership interest of at least 25 percent.” Under the statute, a bid for a contract from state funds “must include the name and social security number of the individual or sole proprietor and each partner, shareholder, or owner with an ownership interest of at least 25 percent of the business entity submitting the bid or application.” And the statute includes a statement that must be included in any state contract; it’s a generic version of the provision quoted above.
What I Think
If a state has the urge to promote some goal through its contracting, presumably that’s because a more comprehensive solution can’t be achieved. Activism through contracting is a distant second-best, a sideshow.
Instead of scoring cheap shots with state activism through contracting, we could work to restore functioning democracy. A fringe benefit might be that we have fewer provisions like this encumbering state contracts.
(I’m a politics ignoramus, but since politics has wandered onto my turf, I feel free offer an opinion. I expect that people have written at length about this. If you know of any such articles, please provide links in the comments.)
Government contracting is a perennial swampland of grief, as anyone who’s attempted to sell software to los federales can attest. However, since the politicians who voted for the statutes that you cite were presumably duly elected, the functionality vel non of democracy seems extravagantly off piste.
From a drafting standpoint, it seems to me that a simple statement/representation by the government contractor that it is eligible to enter into the contract should cover all these fiddly points, to which one could add as a flourish an acknowledgment that the government may terminate the contract forthwith if the statement proves to have been untrue when made (the question thereupon remaining whether the government is authorized by the statutes to terminate if the contractor violates the eligibility criteria after signing the contract). If the state wants to go all belts and suspenders it could append a listing of all the relevant statutes governing eligibility.
They’re trying to address macro problems at the local level. Necessarily it’s inefficient and intrusive. But what do I know.
Spend an afternoon of grief reading the entirety of representations appended to most federal acquisition contracts (plus do all of checking of lists and posting of posters and analyses of workforces and filing of certificates that you just represented you’d do). Unless, of course, you weren’t hoping your eyes would be bleeding by 3 PM.
I’m less convinced that it’s a political issue versus a bureaucracy that has to answer to no one (which happens quite easily when you’re the biggest buyer on the planet and people are lining up to take the punishment of selling to you).
And at the state level I see no real difference between red state contracts versus blue state contracts other the issues du jour each state has an interest in.
What would be more interesting would be to see credible studies done to show if any of this actually makes any difference to the issues allegedly being addressed. My sense is that makes no damned difference at all.
Vance Koven writes: From a drafting standpoint, it seems to me that a simple statement/representation by the government contractor that it is eligible to enter into the contract should cover all these fiddly points ….
But as Publius alludes to above, an abstract representation like that makes the contract reviewer’s job more difficult. If you want to get the deal to signature more quickly (and thereby make your client smile), then list the specific representations you want the other side to make.
D.C., I think you read my comment too quickly. I did say that if you wanted to get into those weeds, you could, with supernal clarity, attach an exhibit with citation all the laws you have to comply with. Seems to me that’s cleaner than having clause after clause of representations. And don’t forget that government contracting counsel and bureaucrats are specialists in tracking all this stuff; changing the formatting only makes it easier for the non-specialist without derogating from what the specialist brings to the trough, I mean table.
I’m assuming the government is drafting the contract and that the vendor is having to review the contract and its certifications; that’s been my experience.
“Swampland of grief.” I love it.
This is a current hot-button issue with respect to net neutrality. California passed a state bill that’s now being challenged on several grounds, including federal preemption. Seeing that challenge, California and other states are moving to prohibit public service procurement from ISPs failing to abide by net neutrality, variously defined, network-wide.
Thanks for the info.
You probably saw this: https://www.npr.org/2018/12/26/680129742/texas-school-employee-suing-over-pro-israel-oath
Summary: a Texas school district fired a speech pathologist because she wouldn’t sign a pledge not to boycott Israel that had recently been slipped into all contracts.
Ugh. I knew Israel would be in the mix, but I didn’t have an example. Thank you!
My home state is always ready to do a solid for the Holy Land.
Others seem to have covered the main points, so a few side issues:
1/ HOTEL is surely the short name defined term for a corporation, perhaps a big one, so it’s not absurd to think that a hotel-owning entity would invest in the Islamic Republic.
2/ ‘The HOTEL further certifies that it shall not utilize any subcontractor’: Read ‘the HOTEL shall not use’.
3/ ‘HOTEL hereby attests that it shall not knowingly utilise the services’: Read ‘HOTEL shall not knowingly use the services’.
4/ The second clause of the second example tees up contractor liability for knowingly using a subcontractor who thereafter unknowingly uses the services of an illegal immigrant. That’s absolute liability, not liability based on fault. Not good, and probably not intended.
5/ The statute in question requires ‘attestation’ of future events rather than creating a prohibition.
If the contractor after signing uses illegal immigrants or uses subcontractors who use illegal immigrants, there is arguably no breach, since the contractor made the required attestation, and the contract imposed no further obligation or prohibition concerning the subject matter.
It’s as if the statute required a contractor to attest that the next day’s weather would be fair. A storm the next day would not constitute a breach.
6/ H.L. Mencken said, ‘In a democracy the people get the government they deserve, good and hard’.