Illinois Vendor Registration Act

Effective January 1, 2009, business entities whose aggregate contracts with Illinois agencies exceed $50,000 or whose bids and proposals on state contracts exceed $50,000 must comply with Public-Act 95-0971 (“BEREP”) and Executive Order 3 (2008) (the “Executive Order”). The purpose of the new laws is to crackdown on “pay-for-play” in the government contract procurement process.

Public-Act 95-0971: Business Entity Registration for Procurement Act

On January 1, 2009 , Illinois Public-Act 95-0971 went into effect. BEREP requires business entities whose aggregate contracts with state agencies exceed $50,000 or whose bids and proposals on state contracts exceed $50,000 to register with the Illinois Board of Elections by February 2, 2009. Additionally, businesses bidding on state contracts must include (1) a registration certificate, including a disclaimer stating that its registration will remain current, or a certificate stating that the entity is exempt from registration and (2) a statement making the contract voidable if the bidder fails to comply with registration requirements.

Who Must Register

BEREP applies to the following business entities: (1) entities whose bids and proposals on State contracts exceed $50,000; (2) entities whose contracts with state agencies, in the aggregate, exceed $50,000; (3) entities whose bids and proposals on state contracts combined with the entity’s total value of state contracts exceed $50,000. State agencies include boards, commissions, agencies, institutions, authorities, and corporations that are created by the Illinois Constitution or state statute and are under the executive branch’s control. Further, state agencies include public institutions of higher learning and certain public employee retirement systems. State agencies, however, do not necessarily include municipal entities. For example, it is our understanding that the Illinois Municipal Retirement Fund, the public pension fund covering municipal employees, takes the position that it is not a state agency for the purposes of BEREP or the Executive Order. You should consult with your contracting agency(ies) to determine whether the agency is covered under BEREP.

Business Entity Registration Procedure

Business entities may register with the Illinois Board of Elections in one of two ways. First, business entities may e-mail a completed Business Entity Registration Form as a PDF attachment to berep@elections.il.gov . In the alternative, a business entity may file the Business Entity Registration Form in paper form by February 2, 2009. The Business Entity Registration Form may be accessed at http://www.elections.il.gov/Downloads/BusinessRegistration/PDF/BEREPForm.pdf.

Business entities must provide all disclosed affiliated entities and people with a copy of the Business Entity Registration Form by e-mail, first class mail, or hand-delivery within 10 days of registering.

Once registered, the business entity will receive a stamped copy of the Business Entity Registration Form which acts as the registration certificate. The registration certificate will be e-mailed or mailed via first class mail within two business days of registration.

In addition to the initial registration, business entities will have to re-register on the Illinois Board of Elections website (http://www.elections.il.gov ) once an electronic registration system is established. Business entities will have 60 days to re-register from the date the electronic registration system is established.

For a detailed description of the registration process, please refer to BEREP’s “Emergency Rules” found on
http://www.elections.il.gov/Downloads/BusinessRegistration/PDF/EmergRuleSec100-180.pdf .

Business Entity Registration Requirements

Entities must disclose the names, addresses, and nature of affiliation of affiliated entities and people. Affiliated entities include the following: (1) subsidiaries or contracting business entities; (2) members of the same unitary business group¹; (3) not-for-profit corporations created by the business entity or one of its affiliated entities; or (4) political committees for which the bidding entity or one of its affiliated entities is the sponsoring entity. Affiliated people include the following: (1) people with an ownership interest or distributive share of the bidding or contracting business in excess of 7.5%; (2) the bidding or contracting entity’s executive employees²; and (3) the executive employees’ spouse and minor children.

While the business entity must supply an affiliated person’s address, it is not required to disclose the person’s residential address. Additionally, names of minor children will not appear on the searchable Illinois Board of Elections website unless contributions are credited to the minor.

The Business Entity’s Responsibilities After Registration

A business entity must deliver a copy of its registration certificate to applicable procurement officers by March 31, 2009 if it has a state contract or a pending bid or proposal. Further, the business entity must ensure its registration is current. If the business entity has a pending bid or proposal, it must update its registration within two business days of any changes until a day after the contract is awarded. If the business entity has contracts exceeding $50,000, it must update its registration within 10 days of any changes until the later of the expiration of the awarding incumbent officeholder’s term or two years following the contract’s termination or expiration.

An affiliated entity or person must also disclose that it is affiliated with a business entity registered with the Illinois Board of Elections.

Penalties for Non-Compliance

A business entity required to register will be fined up to $5000 ($1000 per business day) for intentionally, willfully, or materially failing to disclose information required for registration or for failing to update its registration. In addition to the monetary penalty, the contract, bid, or proposal is voidable by the chief procurement officer. Finally, a business entity failing to deliver copies of its registration to disclosed affiliated entities and people could be fined up to $1,001.