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F I S C A L I M P A C T R E P O R T

SPONSOR Vigil

DATE TYPED 2/23/05

HJM 66

SHORT TITLE

Transportation Dept. Contract Requirements

SB

ANALYST Moser

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

NFI

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Transportation (DOT)

SUMMARY

Synopsis of Bill

House Joint Memorial 66 would require the NMDOT to study its contracts “to ensure that con-

tractor employees are afforded full access to the salaries, wages and benefits” available through

the contractor, then to report findings to the LFC by 10-1-05.

Significant Issues

This memorial requires NMDOT to study all its contracts, including construction contracts, pro-

fessional service agreements, vendor contracts, etc., for possible unpaid benefits to those who

work for the contractors. The NMDOT indicates that it has in excess of 700 contracts in force,

not including construction contracts, at any given time. The term “benefits” has not been de-

fined, and could include various types of insurance information, per diem and travel allowances,

retirement plans, etc. The NMDOT may have a difficult time obtaining much of this informa-

tion, and some of the records, or portions thereof, may contain confidential information (e.g., so-

cial security numbers, health/medical information, etc.) to which the department would not have

access.

The language customarily included in NMDOT contracts requires the contractors to make their

records available for audit purposes. The purpose of an audit is to verify the obligations between

House Joint Memorial 66 -- Page 2

the NMDOT and its contractors rather than obligations between contractors and their employees.

The purpose of the proposed study extends beyond audit purposes outlined in current contracts.

The department indicates that the existing contract language would not require contractors to co-

operate in this study and contracts perhaps would need to be renegotiated.. Consequently, there

is no requirement under NMDOT’s current contracts for contractors to participate in this study.

Although the NMDOT has remedies against its contractors for violations of contract provisions,

the NMDOT does not have actual enforcement power over the “salaries, wages and benefits

available through the contractor” to its own employees. There are other entities, such as the US

Department of Labor and the NM Department of Labor, that have enforcement power with re-

spect to wages and working conditions of private employers. Similarly, there are state and fed-

eral agencies that address complaints of discrimination and equal pay issues, such as the US

Equal Employment Opportunity Commission and the NM Human Rights Commission. Addi-

tionally, if contractor employees are represented by a union the union has jurisdiction for proc-

essing and investigating these types of complaints. Employees who believe that they are not be-

ing paid salaries, wages or benefits as provided by law can file complaints with those agencies,

which would then be able to actually conduct investigations, which would include the authority

to compel disclosures and compliance.

In contrast, the NMDOT indicates that it has no actual authority to “ensure” that the contractor is

providing “full access” to employees of its salaries, wages and benefits. Any attempt by the

NMDOT to require that private contractors provide those salaries, wages and benefits may con-

stitute an interference with the contractual relationship between the contractor and its employees.

Workers for NMDOT contractors now have an array of statutory wage and benefit protection.

The Fair Labor Standards Act, Little Miller Act, Davis Bacon Act, Public Works Minimum

Wage Act, Title VII and New Mexico Human Rights Act are all available to protect New Mex-

ico workers.

PERFORMANCE IMPLICATIONS

Assembling this data will require a significant investment in time and resources.

FISCAL IMPLICATIONS

The precise fiscal impact cannot be ascertained.

ADMINISTRATIVE IMPLICATIONS

Assembling this data will require a significant investment in time and resources. However, the

precise administrative impact cannot be ascertained. It may be that the NMDOT will have to

hire a consultant to conduct the study, particularly with a study/submission deadline of October

1, 2005.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

With respect to construction contracts, this memorial duplicates federal and state requirements

already in place for verification of wages and benefits by means of contractor furnished certified

payrolls for its workers.

House Joint Memorial 66 -- Page 3

OTHER SUBSTANTIVE ISSUES

This memorial requires NMDOT to inject itself into the private relations between a contractor

and its workers, and gather data that may not be readily obtainable for all contracts. Workers by

law already have an array of labor protections, as noted above.

GM/yr