TRANSMITTAL LETTER FOR BOARD MEETING OF JULY 17, 2025
COMMITTEE ON PROCUREMENT
Mr. John P. Murray, Acting Executive Director
Title
Report Regarding the District Doing Business with Corporations or Limited Liability Companies Not Authorized to Transact Business in Illinois
Body
Dear Sir:
This report is provided to update the Board of Commissioners (Board) on the District’s practice when corporations or limited liability companies (companies) are issued purchase orders, contracts, or requests for proposals but are not registered or authorized to do business in Illinois (foreign company), and the foreign company requests a waiver to the State of Illinois registration requirements.
While the District has a strong preference for doing business with Illinois based companies and/or those foreign companies that properly register with the Illinois Secretary of State (State), there are limited instances where doing business with foreign companies that do not register with the State is necessary.
By way of background, on December 7, 2006, the Director of Procurement & Materials Management (PMM) submitted a report informing the Board that in cases where a bidder is a duly organized foreign company whose existence is properly documented, where dealing with it is necessary or desirable and where the foreign company has requested a waiver of the State of Illinois registration requirement, the Department Head seeking the contract will state in writing that it is in the best interest of the District to enter into an agreement with such foreign company. These waivers are subject to the Executive Director’s written approval when the contract is $10,000.00 or less and are subject to Board approval if the contract is over $10,000.00. Thereafter, in 2015, the Executive Director delegated waiver authority on contracts under $10,000.00 to each Department Head subject to that Department Head providing written notification to the Director of PMM. The use of the $10,000.00 threshold was related to the mandatory competitive bid threshold.
Effective January 1, 2025, Public Act 103-0865 (P.A. 103-0865) amended Section 11.3 of the Metropolitan Water Reclamation Act, 70 ILCS 2605/11.3, increasing the mandatory competitive bid threshold to no less than $60,000.00. P.A. 103-0865 was the culmination of one of the District’s 2024 State of Illinois Legislative Program initiatives, approved by the Board at its January 4, 2024 regular meeting. While the original Board approved initiative was to increase the mandatory competitive bid thresholds on non-emergency contracts and operating emergencies to $100,000.00, the Illinois General Assembly set the minimum amount at $60,000.00.
Consequently, at its March 6, 2025 meeting, the Board adopted a policy increasing the mandatory competitive bid threshold from $25,000.00 for furnish and deliver contracts and from $10,000.00 for service contracts to $60,000.00 for all contracts, to be consistent with P.A. 103-0865.
To remain consistent with the March 6, 2025 Board policy, it is in the District’s best interest that the Executive Director delegate waiver authority for foreign company State of Illinois registration requirements for those contracts that are $60,000.00 and less to each Department Head, subject to the Department Head providing written notification to the Director of PMM. Consistent with the practice involving contracts over $10,000.00 waiver requests for contracts over $60,000.00 will be presented to the Board for consideration and approval.
Contract documents will still require proof of State of Illinois registration and this waiver requirement will continue to be limited to instances when foreign companies request the waiver, when there is a compelling need for the goods or services, and when the provider has a good performance record with the using department.
This report deals solely with foreign companies. Companies which purport to be domestic Illinois companies will continue to be held to strict compliance with Illinois laws, including business organization statutes. The Law Department will continue to provide assistance to all departments in the contract administration process to maintain compliance with the law with due consideration to the procurement needs of the District.
Respectfully Submitted, Darlene A. LoCascio, Director of Procurement and Materials Management
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