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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.


Incorrect answer:As a majority shareholder, are deemed to “be interested in” the transaction within the meaning of section 24-18-201, C.R.S. is NOT FALSE.
red xWith 51% of the shares, you are a majority shareholder, which means that you are deemed to possess the quantum of interest with which section 24 18 201, C.R.S. (which defines the term "be interested in" to exclude only "holding a minority interest in a corporation"), is concerned.

It is worthwhile to note that the contract will be awarded to the lowest responsible bidder based on a competitive bidding process and that such contracts are excluded from the “contracts” with which section 24-18-201, C.R.S., is concerned. In other words, if AppMaker is selected as the lowest responsible bidder, the transaction is not a “contract” within the purview of section 24-18-201, C.R.S. However, because you will derive some economic benefit if AppMaker is awarded the contract, it may be advisable for you to disclose your interest prior to voting and/or to abstain from voting if, in your judgment, there may be a perception that you have a conflict of interest.

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Last updated: 09 OCT 2015

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