CHAPTER 70:07:04
SUSPENSION AND DEBARMENT
Section
70:07:04:01 Suspension for subcontracting violation.
70:07:04:02 Suspension of bidder.
70:07:04:03 Suspension -- Notice and content -- Effective date.
70:07:04:04 Repealed.
70:07:04:05 Grounds for debarment -- Contract crime.
70:07:04:06 Grounds for debarment -- Violation of antitrust laws.
70:07:04:07 Conviction of person imputed to business.
70:07:04:08 Debarment based on affiliation.
70:07:04:09 Reasons for debarment.
70:07:04:10 Right to hearing on suspension and debarment.
70:07:04:10.01 Notice of suspension or debarment.
70:07:04:10.02 Hearing request.
70:07:04:10.03 Failure to respond.
70:07:04:11 Debarment period when conviction imputed or based on affiliation.
70:07:04:12 Duration of debarment.
70:07:04:13 Effective date of debarment.
70:07:04:14 Time limit for initiating debarment or suspension.
70:07:04:15 Term of debarment
70:07:04:16 Termination of debarment or award during debarment.
70:07:04:17 Continuation of contracts.
70:07:04:18 Award of department contracts to debarred or suspended business prohibited -- Exception.
70:07:04:19 Subcontracts with debarred or suspended business prohibited -- Exception.
70:07:04:20 Suspension of prequalification.
70:07:04:21 Period of suspension.
70:07:04:22 Prequalification requirements following completion of suspension or debarment.
70:07:04:01. Suspension for subcontracting violation. The standard specifications for road and bridge construction included in the construction contract shall contain provisions for subcontracting.
If the secretary determines a contractor has violated subcontracting provisions, the secretary may suspend the bidding qualifications of the contractor for up to 180 days.
Source: SL 1975, ch 16, § 1; 8 SDR 45, effective October 28, 1981; 11 SDR 22, effective August 12, 1984; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from § 70:01:05:20, 19 SDR 154, effective April 11, 1993; 40 SDR 121, effective January 6, 2014; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:02. Suspension of bidder. The secretary may suspend a business from bidding upon receiving notice or learning of a conviction for a contract crime or violation of antitrust law or upon receiving evidence of an affiliation described in § 70:07:04:07, 70:07:04:08, or 70:07:04:09.
Source: 19 SDR 154, effective April 11, 1993; 40 SDR 121, effective January 6, 2014; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:03. Suspension -- Notice and content -- Effective date. The order of suspension must describe the reason for suspension and the period of suspension. The order must be sent by certified mail to the business suspended.
The order of suspension must take effect on the date the order is mailed. A suspension may not exceed 180 days.
Source: 19 SDR 154, effective April 11, 1993; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:04. Commencement of debarment proceedings after suspension. Repealed.
Source: 19 SDR 154, effective April 11, 1993; 47 SDR 38, effective October 6, 2020.
70:07:04:05. Grounds for debarment -- Contract crime. The commission may debar a business if the business or a principal or former principal of the business is convicted in any jurisdiction of a contract crime or if a conviction is imputed to the business as set forth in §§ 70:07:04:07 and 70:07:04:08.
Source: 19 SDR 154, effective April 11, 1993; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:06. Grounds for debarment -- Violation of antitrust laws. The commission may debar a business if the business or a principal or former principal of the business is convicted in any jurisdiction of violating SDCL chapter 37-1, federal antitrust laws, or another state's antitrust laws or if a conviction is imputed to the business as set forth in §§ 70:07:04:07 and 70:07:04:08.
Source: 19 SDR 154, effective April 11, 1993; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:07. Conviction of person imputed to business. The conviction of a person for a contract crime is imputed to a business when the conduct which gave rise to the conviction occurred in connection with the person's performance of duties for or on behalf of that business in the course of employment or with the knowledge, approval, acquiescence, or subsequent ratification of the person's conduct by the business.
Source: 19 SDR 154, effective April 11, 1993.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:08. Debarment based on affiliation. The conviction of a person or business for a contract crime in any jurisdiction is imputed to any principal, former principal, successor business or corporation, or any other person who is associated with or formerly associated with the convicted person or business and who participated in, knew of, or had reason to know of the contract crime.
Source: 19 SDR 154, effective April 11, 1993; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:09. Reasons for debarment. The commission may debar a business for the following reasons:
(1) The business employs a former principal of a debarred or suspended business or person as an officer, director, or manager or in another significant decision-making capacity while the former principal or business is debarred or suspended;
(2) The business is owned by or associated in a joint venture with a debarred or suspended business or is controlled by a principal or former principal of a debarred or suspended business; or
(3) A former principal of a debarred or suspended business has a significant financial interest in the business and the principal has the authority to or will control, direct, manage, or influence activities of the business concerned with the department contract in question.
Source: 19 SDR 154, effective April 11, 1993; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:10. Right to hearing on suspension and debarment. The secretary may suspend a business and the commission may debar a business only after a hearing or opportunity for hearing pursuant to contested case procedure in SDCL chapter 1-26 has been provided for the business.
Source: 19 SDR 154, effective April 11, 1993; 40 SDR 121, effective January 6, 2014; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:10.01. Notice of suspension or debarment. The secretary shall notify the business of the intent to suspend or debar. The notice must inform the business of the right to request a hearing prior to imposition of suspension or debarment and must include an explanation of the procedure for requesting a hearing. The notice must be sent by certified mail to the address on record with the department. The secretary shall send notice of intent to disbar within 60 days after a suspension order.
Source: 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:10.02. Hearing request. To request a hearing, the person shall submit a written request to the secretary. A mailed hearing request must be postmarked or an electronic hearing request must be received within twenty days following the date of the notice to suspend or debar. Upon receipt of a request for hearing, the secretary shall issue a notice of hearing pursuant to SDCL chapter 1-26.
Source: 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:10.03. Failure to respond. Failure to request a hearing within the time specified in § 70:07:04:10.02 constitutes a waiver of the right to a hearing. If the right to a hearing on suspension is waived, the secretary may issue an order of suspension. If the right to a hearing on debarment is waived, the commission may issue an order of debarment.
Source: 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:11. Debarment period when conviction imputed or based on affiliation. The period of debarment if a conviction for a contract crime is imputed under § 70:07:04:07 or based on affiliation under § 70:07:04:08 may not be less than any period of debarment imposed on the convicted person or business.
Source: 19 SDR 154, effective April 11, 1993; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:13. Effective date of debarment. A debarment takes effect on the date of the final decision by the commission. The order for debarment shall be sent by certified mail.
Source: 19 SDR 154, effective April 11, 1993; 40 SDR 121, effective January 6, 2014.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:14. Time limit for initiating debarment or suspension. A debarment or a suspension must be initiated within three years from the date of the conviction of a person or business for a contract crime.
Source: 19 SDR 154, effective April 11, 1993; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:15. Term of debarment. The commission shall establish the term of debarment, based on the following:
(1) The seriousness of the offense;
(2) Whether restitution has been made;
(3) Whether the debarred person cooperated in civil or criminal lawsuits;
(4) The state's need to preserve the competitive bidding process; and
(5) Whether the business is debarred or has been debarred in another jurisdiction or in this state.
Source: 19 SDR 154, effective April 11, 1993; 40 SDR 121, effective January 6, 2014.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:16. Termination of debarment or award during debarment. The commission may terminate a debarment by order or may award a department contract to a debarred or suspended business under any of the following circumstances:
(1) The business is the sole supplier of a material or service required by the department;
(2) The commission determines that an emergency exists; or
(3) The contract is for purchasing materials or renting equipment for routine road maintenance.
Source: 19 SDR 154, effective April 11, 1993; 40 SDR 121, effective January 6, 2014.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:18. Award of department contracts to debarred or suspended business prohibited -- Exception. Except as provided in § 70:07:04:16, the department may not award a department contract to a debarred or suspended business.
Source: 19 SDR 154, effective April 11, 1993; 40 SDR 121, effective January 6, 2014; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:19. Subcontracts with debarred or suspended business prohibited -- Exception. Except as provided in § 70:07:04:16, a contractor to whom a department contract has been awarded by the commission may not subcontract with a debarred or suspended business for performance of the department contract. The department may not approve a debarred or suspended subcontractor, except as provided in § 74:07:04:16.
Source: 19 SDR 154, effective April 11, 1993; 40 SDR 121, effective January 6, 2014; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:20. Suspension of prequalification. The secretary shall suspend the prequalification status of any business based on a violation of a state or federal law, rule, or regulation; an order of a federal or state department or agency pertaining to the construction, maintenance, repair, or supervision of highways; suspension or debarment by a state or federal agency; poor or unsatisfactory management, quality, and timeliness of work performed on existing or previous contracts; inability to finance the work; lack of equipment or capable and experienced personnel; or failure to submit supplemental information as requested by the committee under § 70:07:02:18. A suspension pursuant to this section prohibits the business from bidding on any department contract for which prequalification is required.
Source: 40 SDR 121, effective January 6, 2014; 47 SDR 38, effective October 6, 2020; 49 SDR 47, effective November 21, 2022.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10, 31-5-10.1, 31-5-10.2, 31-5-10.3.
70:07:04:21. Period of suspension. The suspension of prequalification status must be for a specific period of time, based on the seriousness of the deficiency, but not to exceed 180 days.
Source: 40 SDR 121, effective January 6, 2014; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
70:07:04:22. Prequalification requirements following completion of suspension or debarment. A business that was suspended or debarred and has completed the suspension or debarment period, shall reapply for prequalification status before bidding on a construction contract for which prequalification is required. The business may submit prequalification application information before the end of the suspension or debarment period, but no prequalification approval is effective until completion of the suspension or debarment period.
Source: 40 SDR 121, effective January 6, 2014; 47 SDR 38, effective October 6, 2020.
General Authority: SDCL 31-5-10.
Law Implemented: SDCL 31-5-10.
