By: Sean T. Devenney
Ohio recently passed dramatic changes to its public works procurement statute. In particular, Ohio authorized the utilization of both the design-build and construction manager at risk (CMAR) delivery method for construction projects. Amazingly, Ohio has gone from only permitting public works project on a multi-prime basis into what appears to be one of the most liberal and progressive public works contracting states in the Country. http://www.dbia.org/advocacy/ohio110701.htm It will be interesting to see what, if any, impact the Buckeye State’s decision will have on Indiana. While Indiana adopted the design-build delivery method in 2005, it has not moved forward on permitting public works projects to utilize the CMAR delivery method. Perhaps the change of heart in Ohio will serve as a bell weather for similar changes in Indiana to continue the momentum gained through the adoption of the design-build statute.
Additionally, this change in Ohio law opens up another interesting point. Indiana based CMs and design-builders may now actively seek business opportunities on public projects in Ohio. Going across state lines for work represents an obvious opportunity to expand business, but it also presents challenges. For those Indiana based companies considering doing work in the Ohio, they will have to comply with Ohio law, which could differ significantly from Indiana. The public works statute in Ohio serves as a prime example of one of the many legal challenges to doing work in another state. For instance, the public works statute in Ohio requires the contractor (and its subcontractors) to be enrolled in a drug-free workplace program of the bureau of workers’ compensation for Ohio or a comparable program approved by the bureau. The drug-free program requires among other things that the contractor have a written drug and alcohol policy and the ability to test employees for drug use. Additionally, an Indiana contractor must take steps to make sure it has properly registered to do business in Ohio with the Ohio Secretary of State’s office, and must have a valid certificate of compliance issued by the Ohio Equal Opportunity Employer Coordinator certifying that the contractor met its obligations under affirmative action programs authorized under Ohio and/or Federal law. These are just a few examples of the type of employment-related legal issues that must be dealt with when doing business in another state.
As business opportunities in a down economy become scarce the pressure to expand geographically increases. However, the decision to enter new markets means the contractor or design professional may be required to meet new and different legal requirements. This hurdle coupled with the overall general business risks associated with expansion must be carefully considered prior to moving across state lines.