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Ethics Tutorial - Colorado General Assembly

- Contracts and Claims - 18 of 25

Background

Statutory provisions governing standards of conduct for public officials proscribe certain acts related to contracts and claims.  Section 24-18-201, C.R.S., prohibits members of the General Assembly (among other public officials) from being "interested in any contract made by them in their official capacity or by any body, agency, or board of which they are members or employees".

This statute sets forth several exclusions to the definition of “contract”, such as:
  • A contract awarded to the lowest responsible bidder in a competitive bidding process;
  • Merchandise sold to the highest bidder at a public auction; and
  • With regard to members of the state legislature, a contract for which a member has disclosed a personal interest (in accordance with House or Senate rules) and upon which the member has not voted.
    So, if a transaction involves one of the above circumstances, section 24-18-201, C.R.S., (which is limited to “contracts”) is not implicated. Additionally, for the purposes of the statute, a public official is not deemed to "be interested in" any corporation in which the official holds only a minority interest.

Contracts made in violation of these laws are voidable, and the transgressor may be subject to criminal penalties and an additional fine.

Hypothetical

Legislative contract in which member may be interested

Using a competitive bidding process, the state of Colorado (acting through the Legislative Council of the General Assembly) will be considering proposals from vendors for a contract to create an innovative new mobile device application (or “app”) that will compile and categorize all the committee and floor votes cast by Colorado state legislators each session.  You are currently a member of the Colorado State Senate and serve on the Legislative Council, which is responsible for both reviewing proposals from vendors that seek to perform services for the General Assembly and for making the final selection of a vendor. You are also the 51% owner of a closely held software development corporation, AppMaker, which builds customized apps for a variety of purposes. AppMaker’s other shareholders want to submit a bid for the contract.

Question


Based on section 24-18-201, C.R.S., which one of the following statements is FALSE?

Select Section 24-18-201, C.R.S., may be inapplicable because the contract is being awarded in accordance with established "competitive bidding procedures".

Select AppMaker may submit a bid on the contract, despite your position on the Legislative Council and the fact that you will benefit economically if AppMaker is awarded the contract.

Select As a majority shareholder, are deemed to “be interested in” the transaction within the meaning of section 24-18-201, C.R.S.

Select If AppMaker submits a bid and is awarded the contract, you must disclose your personal interest in, and vote “no” on, the contract.


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Last updated: 09 OCT 2015


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