Using Bid Credits

Section 680.230 Using Bid Credits a) Requesting Bid Credits for Use in a Bid 1) Contractors and subcontractors may request a Bid Credit Certificate from the Department to be used for a bid on a specific project. The Bid Credit Certificate will identify the amount of available bid credits that a contractor or subcontractor elects to use for the project.  Prior to July 1, 2027, the bid credit certificate will only include credits earned in the project's region. 2) The Bid Credit Certificate may only be used in connection with the bid for the specific project for which it is was requested. 3) The bid credits requested by the contractor or subcontractor for the Bid Credit Certificate will be sequestered in the contractor or subcontractor's account and cannot be used for more than one bid at a time bid. b)         Applying the Bid Credits 1)         T he awarding authority for public works projects shall include language in the Invitation for Bid specifically advising that contractors and their subcontractors may use Bid Credits earned from the Illinois Works Jobs Program Act, including the maximum amount of bid credits that can be used for the project as set forth in subsection (d). 2) Contractors shall attach all Bid Credit Certificates to their bid for the public works project, or as otherwise directed in the Invitation for Bid issued by the awarding authority. 3) Bid credits are used to lower the base bid of a contractor to outbid the lowest qualified and responsible bidder who did not use bid credits by at least $1. The awarding authority will only apply the amount of bid credits necessary for the contractor to outbid the lowest qualified and responsible bidder by at least $1. 4) The contractor with the lowest effective bid will have the opportunity to accept the contract at the bid amount that was submitted by the lowest qualified and responsible bidder who did not use bid credits.  For example, Contractor A submits a bid for $1,000,000.  Contractor B submits a bid for $1,050,000, but also uses $60,000 Bid Credit Certificate.  Contractor B's base bid is lowered to $990,000, and would then have the opportunity to accept the contract at the base bid submitted by Contractor A ($1,000,000). 5) If the awarding authority receives multiple bids from contractors who submit Bid Credit Certificates, the contractor with the lowest effective bid will be selected as the prevailing bidder, and will have the opportunity to accept the contract at the lowest base bid amount. 6) If the awarding authority determines that two bidders have the same adjusted bid value, all pre-existing selection criteria shall apply to select the prevailing bidder. No preference shall be afforded to the bidding party which submitted the most bid credits. 7) The use of bid credits shall not be treated as a procurement preference pursuant to the Illinois Procurement Code [30 ILCS 500/45-5], and unless otherwise provided in the Invitation for Bid, all applicable procurement preferences shall apply. c)         Combining Bid Credit Certificates 1)         Multiple Bid Credit Certificates may be combined in a bid for a specific project. 2) A contractor who combines its Bid Credit Certificate with that of a subcontractor must use at least $5,000 of its own bid credits. 3) In the event the contractor accepts the contract from the awarding authority at a value below that contractor's base bid, the difference between the contractor's base bid and the price it accepts the contract at should be distributed proportionally among all contractors and subcontractors that are part of the bid. The proportion of the difference that is applied to each contractor should not be more than the proportion of their share of the base bid. For example, prime contractor submits a base bid of $1,000,000.  That bid is comprised of subcontractor A's bid of $200,000, subcontractor B's bid of $200,000, and subcontractor C's bid of $100,000.  Prime contractor used a Bid Credit Certificate of $100,000, which consisted of prime contractor's $40,000 bid credits, subcontractor A's $30,000 bid credits, and subcontractor B's $30,000 bid credits.  If prime contractor accepts the contract at $900,000, then the prime contractor should receive $450,000, subcontractor A should receive $180,000, and subcontractor C should receive $90,000 of the overall contract amount. 4) The contractor that submits a Bid Credit Certificate of a subcontractor on a bid must use that subcontractor on the project for which the bid is submitted, unless the subcontractor elects not to participate in the project or is disqualified by the Awarding Authority. 5)         A subcontractor who elects not to participate in a project after the bid is submitted shall forfeit their bid credits. The prevailing bid shall not be disrupted, and the contractor will not be required to elicit or submit additional bid credits. 6)         In the event that a subcontractor is disqualified by the Awarding Authority after the bid is selected and during due diligence review, the credits contributed by that disqualified subcontractor will not be returned. The prevailing bid shall not be disrupted, and the prime contractor will not be required to elicit or submit additional bid credits. d) Maximum Permitted Credit Usage. The maximum amount of bid credits that may be used for a specific project when bidding on a public works project shall be as follows: 1) 3% of the total project cost for projects that are $5 million or less. 2) 4% of the total project cost for projects that are $50 million or less but more than $5 million. 3)         5% of the total project cost for projects more than $50 million. e)         Return of Bid Credits 1)         Bid credits ultimately applied by an awarding authority will be subtracted from the prevailing contractor or subcontractor's account at the expiration of the protest period of the award. Any excess bid credits that were not used by the awarding authority will be returned to the contractor or subcontractor's account. 2) In the event that a bid contained multiple Bid Credit Certificates, excess bid credits shall be calculated, and ultimately returned to the parties that submitted the Bid Credit Certificates, in a manner proportional to the original contribution of each party. This provision shall not be construed to contravene the requirement that a prime contractor must submit no less than $5,000 of its own credits with each bid (see Section 680.230(c)(2)). 3) Bid credits that were sequestered in an account will be unfrozen if they are not accepted by the awarding authority, or if the contractor or subcontractor withdraws its bid with the awarding authority and returns the bid credit certificate to the Office of Illinois Works, or if the Bid Credit Certificate expires.  Contractors shall notify the Office of Illinois Works if the bid credits are not accepted by the awarding authority using a form provided by the Department.  The Department will return the sequestered bid credits to the contractors account within 10 business days of receipt of notice. 4)         Unless the Department receives notice from the contractor or awarding authority that the bid credits were not accepted or withdrawn, or unless additional time is requested by the contractor to extend the duration of the Bid Credit Certificate, the Bid Credit Certificates shall expire 90 days after issuance. After expiration, the credits will be returned to the contractor or subcontractor's account within 10 business days.