1. Definitions. For the purposes of this section the definitions of “contractor” and “subcontractor” contained in Section 10.8.1 of this article shall be applicable.
2. Listing of Subcontractors. Each officer, department, board or commission awarding contracts for the construction of any public work or improvement within the City of Los Angeles shall provide in the bid documents prepared for such work or improvement that every person making a bid or offering to perform the work shall state therein:
(a) The name and address of each subcontractor who will perform work or labor or render service to the bidder in or about the construction of the work or improvement in an amount in excess of one-half of one percent (1/2%) of the prime contractor’s total bid or $10,000.00, whichever is greater.
(b) That portion of the work which will be done by each subcontractor.
The prime contractor shall list only the subcontractor for each such portion as is defined by the prime contractor in its bid. Failure of prime contractor to specify a subcontractor for any portion of the work shall constitute agreement by said contractor that it is fully qualified to perform that work and shall perform with its own forces.
3. Substitution. No prime contractor whose bid is accepted may substitute any person as subcontractor in place of the subcontractor listed in the original bid or offer except in the following instances:
(a) When the subcontractor listed in the bid after a reasonable opportunity to do so fails or refuses to execute a written contract when such contract, based upon the general terms, conditions, plans and specifications for the project involved or the terms of such subcontractor’s written bid, is presented to it by the prime contractor.
(b) When the listed subcontractor becomes bankrupt or insolvent.
(c) When the listed subcontractor fails or refuses to perform its subcontract.
(d) When the listed subcontractor fails or refuses to meet the bond requirements of the prime contractor as set forth in Subsection 4 of this section.
(e) When the contractor demonstrates to the satisfaction of the awarding authority that the subcontractor was listed by inadvertent clerical error.
(f) When the awarding authority determines that work being performed by the listed subcontractor is substantially unsatisfactory and not in substantial accordance with the plans and specifications, or the listed subcontractor is substantially delaying or disrupting the progress of the work.
(g) When the listed subcontractor fails to submit an Affirmative Action Plan acceptable to the awarding authority.
The prime contractor, as a condition of asserting a claim of inadvertent clerical error in a listing of a subcontractor, shall within two working days after the time of the prime bid opening by the awarding authority given written notice to the awarding authority and copies of such notice to both the subcontractor it claims to have listed in error and the intended subcontractor who had bid to the prime contractor prior to bid opening. Any listed subcontractor who has been notified by the prime contractor in accordance with the provisions of this section as to an inadvertent clerical error shall be allowed six working days from the time of the prime bid opening within which to submit to the awarding authority and to the prime contractor written objection to the prime contractor’s claim of inadvertent clerical error.
In all other cases, the prime contractor must make a request in writing to the awarding authority for the substitution of subcontractors, giving reasons therefor. The awarding authority shall mail a written notice to the listed subcontractor giving reasons for the proposed substitution. The listed subcontractor shall have five working days from the date of such notice within which to file with the awarding authority written objections to the substitution.
Failure to file written objections pursuant to the provisions of this section within the times specified herein shall constitute a waiver of objection to the substitution by the listed subcontractor and, where the ground for substitution is an inadvertent clerical error, an agreement by the listed subcontractor that an inadvertent clerical error was made.
If written objections are filed, the awarding authority shall give five days’ notice to the prime contractor and to the listed subcontractor of a hearing by the awarding authority on the prime contractor’s request for substitution. The determination by the awarding authority shall be final.
4. Subcontractor’s Performance Bonds. In the event any subcontractor submitting a bid to a prime contractor does not, upon the request of the prime contractor and at the expense of the prime contractor at the established charge or premium therefor, furnish to such prime contractor a bond or bonds issued by an admitted surety wherein the prime contractor shall be named the obligee, guaranteeing prompt and faithful performance of such subcontract and the payment of all claims for labor and materials furnished or used in and about the work to be performed and performed under such subcontract, the prime contractor may reject such bid and make a substitution of another subcontractor subject to the provisions of Subsection 3 of this section. Such bond or bonds may be required at the expense of the subcontractor only if the prime contractor in its written or published request for sub-bids (1) specifies that the expense of such bond or bonds shall be borne by the subcontractor and (2) clearly specifies the amount and requirements of such bond or bonds.
5. Assignment. No contractor shall permit any subcontract to be voluntarily assigned or transferred or allow it to be performed by anyone other than the original subcontractor listed on the original bid without the consent of the awarding authority or its duly authorized officer.
6. Penalties. A contractor violating any provisions of this section shall be deemed in violation of the contract and the City may at its discretion:
(a) Cancel the contract.
(b) Assess the contractor a penalty of not more than 10% of the amount of the subcontract involved.
7. Notwithstanding the requirements of this section, Council may, by ordinance, waive the requirements in Subsections 2. and 5. for specific projects involving the competitive sealed proposal process under Los Angeles City Charter Section 371(b) and provide in the ordinance alternative requirements.
In any proceeding under this section the prime contractor shall be entitled to a public hearing and to five days’ notice of the time and place thereof.
SECTION HISTORY
Added by Ord. No. 150,595, Eff. 4-2-78.
Amended by: Subsec. 2.(a), Subsec. 3.(f) deleted, Subsecs. (g) and (h) relettered Subsecs. (f) and (g) respectively, Ord. No. 150,786, Eff. 4-24-78; Para. 2, Ord. No. 170,882, Eff. 3-1-96; Subsec. 7. added, Ord. No. 184,936, Eff. 7-11-17.