Chamber-supported “Only Retain for a Reason” Initiative Passes Both Houses with Strong Bipar- tisan Support The Chamber is a long-time advocate for improvements to the state’s procurement processes. This year we had the pleasure of joining a retainage reform coalition that advances Illinois toward a retainage model for state contracts where the Capital Development Board (CDB) and state universities will “only retain for a rea- son,” thereby, creating cash-flow solutions for, oftentimes, small and minority contractors; HB 1224 (Davis, W./ Preston). On State projects, some State agencies retain 10% of contract funds until projects close-out, which can be months (or even years) after the contractors first take on the job, and only after subcontractors have com- pleted their work. This leads to cash flow problems for contractors, especially as they seek to take on new projects. Federal regulations currently permit contracting officers to withhold retainage only if there has been a problem with the job or contractor. Illinois has an across-the-board policy of retaining 10% of the funds owed until it closes out, whether or not a problem exists. HB 1224 will now allow retention on these projects only when there is a problem or when “satisfactory prog- ress” has not been achieved. The Chamber strongly supports this concept and believes that this precedent will allow small businesses to be more able to compete fairly for state projects. Under the new model, determina- tions to retain will be made by the State agency on a case-by-case basis based on the successful completion of milestones. The bill was a product of significant negotiation and passed both chambers with all opposition brought to neu- tral. This was largely done by exempting IDOT projects from the purview of the bill. During the last week of session, HB 1224 passed the Senate, on a vote of 56-0-0 and passed the House on a vote of 86-28-0 with broad bipartisan support. The Chamber was in Support of the proposal. No Procurement Omnibus Filed in the House or Senate While several procurement-related bills did see passage in the final weeks of session (view below), there was no overarching procurement omnibus filed this year. In the closing weeks of the spring session, there were rumors about what proposals might be included in the end-of-year package. However, no language was ultimately filed. Earlier in the year, there were some limited subject matter hearings on procurement reform in the Senate. Some of the legislation below passed out of committee or received a subject matter hearing but didn’t pass both chambers before adjournment. SB 2317, and IDOT initiative, seeks to reduce delays caused by the number of signatories required for project changes over $250,000. The bill proposes increasing the threshold to $750,000. SB 245 concerns project goals for Disadvantaged Business Enterprise (DBE) participation and seeks to limit what is considered a “good faith effort.” SB 2334 would require supplier diversity reporting to be made publicly available. SB 1294, aimed at addressing outsourcing, would prohibit the awarding of contracts if more than 10% is performed outside US. SB 2157 re- stricts the procurement of goods from deforested areas, and SB 101 attempts to streamline veteran certifica- tion processes across the state. Numerous bills were also filed this year related to construction and project management for colleges and universities. The Chamber remains engaged in procurement-related legislation and looks forward to continuing work with our members and allies in the business community to improve project delivery and contracts with the state. Local Government HB 1158 (Du Buclet/Murphy) amends the Metropolitan Water Reclamation District Act. This bill raises the annu- al borrowing limit for MWRD from $150,000,000 to $250,000,000. This bill Passed Both Houses. 17 | END OF SESSION REPORT
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