Wednesday, September 17, 2014

Issues to Consider in Privatizing Government Services

Rather than employing public agency staff to perform essential governmental services, some agencies are contracting out such services in a move toward privatization.

Privatization as a form of P3:  In an article entitled "Privatization: Determining the Role of P3s," that appeared in the August 2014 edition of Government Finance Review, author Kyle Steitz refers to privatization as a form of Public-Private Partnerships (P3) even though P3s are often focused on "economic development projects proposed by developers who are looking for financial assistance from a jurisdiction that stands to benefit from the project."

Key privatization considerations:  In reviewing whether to privatize our contract out government services, the article suggests the following issues that must be addressed:
  • Preliminary evaluation
  • Retaining advisors or experts
  • Public participation
  • Economic and fiscal impact analysis
  • Financial negotiations
  • Service level implications
  • Risk assessment
  • Monitoring of performance and results
Contracting implications:  Privatizing existing governmental functions requires a different set of decision-making processes and contract documents than is typical for when government agencies procure services. And, of course, agencies must address considerations of what is permitted by applicable laws and the impact of privatization on collective bargaining (union) agreements in place for agency employees who may be affected by privatization.
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

Tuesday, September 16, 2014

When Should You Notify a Bidder of a Non-Responsive Bid?

Bidders often make mistakes in not submitting all required documents or filling out forms properly.  So when should a bidder be notified that their bid is non-responsive?

Options for notification:  A public agency could notify the bidder of a non-responsive bid at the following points in time:
  • Sooner:  As soon as the irregularity is identified and a decision has been made that the bid is non-responsive.
  • Later:  When the public agency recommends an award of the contract to another bidder
Sooner is better:  Generally, it is better to notify a bidder of a non-responsive bid as soon as the determination has been made that the bid is non-responsive. One of the advantages of doing this is that it helps to protect the project's schedule.  In other words, if a public agency waits until the time of an award recommendation, and a protest is made then, the protest could end up delaying award and the start of the project.  By notifying the bidder early, if they do protest the non-responsive determination, it provides the public agency with more time in which to address the protest, and hopefully keep the project's schedule.

What bids are non-responsive?  If the irregularity in the bid is material, the bid should be rejected as non-responsive.  If the irregularity is immaterial, public agencies have discretion whether to accept the bid as responsive or reject it as non-responsive.  The test as to the materiality of an irregularity is whether it gives one bidder a substantial advantage or benefit not enjoyed by other bidders. 

Case-by-case determination:  Talk with your attorneys and evaluate potential non-responsiveness issues on a case-by-case basis.  It is important to maintain the fairness and equity of the competitive bidding process, and so material irregularities should not be waived and those bids should be rejected as non-responsive.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

Tuesday, September 9, 2014

No Competitive Bids: Agency to Pay $5 Million to Settle Lawsuit

In 2010, the Washington, DC Metropolitan Area Transit Authority (Metro) awarded a $14 million federally funded contract without competition to a consulting company hired to oversee an integration of the agency's financial and business computer systems.  

Settlement:  In a settlement of a whistleblower lawsuit, Metro agreed on August 20, 2014 to pay more than $5 million to settle the case, without admitting any wrongdoing.  Metro will also pay $390,000 to the worker who alleges he was fired for raising concerns about the lack of competition.

Federal audit:  Metro's procurement problems goes beyond just this one contract.  In an audit commissioned by the Federal Transit Administration, FTA found that Metro's procurement practices allowed award of other contracts without competition and contracts were awarded to preferred vendors without adequate qualifications.  As a result, FTA has restricted Metro's use of federal funds until Metro implements procurement reforms that demonstrate an ability to properly manage procurement processes.

Additional information:  Click on the links below for more about Metro's procurement issues:
Lessons learned:  The following are some of the issues raised by Metro's problems:
  • Policies:  Have clear procurement policies and practices that comply with applicable laws and best practices.
  • Chief Procurement Officer:  Ensure the agency has a chief procurement officer with sufficient authority to ensure compliance with procurement requirements, even when political pressure is exerted by elected officials and agency leadership.
  • Training:  Regularly train agency leadership and staff on procurement policies.
  • Grant compliance:  Ensure compliance with federal grant requirements.
  • Review waivers of competition:  Establish a process with sufficient internal checks and balances for when goods and services may be obtained without competition.
  • Documentation:  If no competition is used, document the basis for waiving competitive selection processes.
  • Public perception:  Consider the perception of how waiving competitive selection procedures will be viewed in the newspaper and on social media 
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

Monday, September 8, 2014

Training: Public-Private Partnerships for the Delivery of Public Infrastructure

Public-Private Partnerships for the Delivery of Public Infrastructure - An Overview 

When:  September 17, 2014, 4:45 pm - 7:00 pm (Pacific Time) 

Where:  Seattle, WA (Ivar's Salmon House, 401 NE Northlake Way) 

Cost:  $37 (includes dinner) 

Sponsored by: APWA, Washington State Chapter 

Information and registration:  Click here.
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

Washington Construction Law Seminar on September 18-19

21st Annual Washington Construction Law Seminar:  I've attended this seminar in previous years and always found it to be very helpful.  I will be attending again this year.

When:  September 18-19, 2014 (9:00 a.m. to 5:00 p.m.) 

Agenda and Speakers:
  • Federal Construction Law - New Developments (Bruce P. Babbitt)
  • Washington State Public Works Competitive Bidding and Bid Protests (Arnold R. Hedeen)
  • Key Clauses of Construction Contracts (Alan Bornstein)
  • Integrated Project Delivery (Scott R. Sleight)
  • Key State Tax Considerations for Construction Projects (George C. Mastrodonato)
  • Building Information Modeling (BIM) (Brendan J. Peters)
  • Construction Changes/Differing Site Conditions (John P. Ahlers)
  • What Happens When Someone in the Chain Goes Bankrupt? (Jerry N. Stehlik)
  • Discovery Issues in Construction Claims (Andrew L. Greene)
  • Washington Construction Law - New Developments (Paul R. Cressman, Jr.)
  • Claims Against Design Professionals (Stanton P. Beck)
  • Design Professional Considerations (Blaine J. Weber)
  • Ethical Considerations for Construction Lawyers (John A. Strait)
  • Insurance in the Construction Industry (Todd C. Hayes)
  • Lien and Bond Claims; Dealing with Sureties (Kerry C. Lawrence)
  • Construction Mediation (Henry C. Jameson)
  • $645 - Government employees
  • Other fees for different categories
  • The sponsor of this training, The Seminar Group, will provide my blog readers with a $50 per person discount off of the regular tuition rate.  Call The Seminar Group to register and mention Mike Purdy and the discount code "SPP50." 
  Credits:  Approved for continuing education credits with:
  • Continuing Legal Education (CLE) credits for Washington, Oregon, Idaho, California, Alaska
  • Construction Risk & Insurance Specialists by IRMI
  • AIA (American Institute of Architects)
  • American Institute of Constructors
  • Construction Management Association of America
Sponsored by:  The Seminar Group

Information and registration:  Click here.
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

Sunday, September 7, 2014

Job Opening: Procurement and Supply Specialist 2

State of Washington, Department of Social and Health Services
  • Position: Procurement and Supply Specialist 2
  • Location:  Lakewood, Washington
  • Closing Date:  September 17, 2014 at 11:59 pm, Pacific Time
  • Salary: $2,994 to $3,918 Monthly
  • Job Summary: This position maintains inventories and ensures the accountability of purchased items and services for DSHS Institutions as part of Consolidated Institutional Business Services (CIBS).  Functions include planning, coordinating, and performing the procurement of services, supplies, materials, parts and equipment for specialized commodity areas in accordance with state laws and requirements.
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

Thursday, September 4, 2014

Job Opening: Assistant Buyer

King County (WA)
  • Position: Assistant Buyer
  • Location:  Seattle, Washington
  • Closing Date:  September 11, 2014 at 4:30 pm, Pacific Time
  • Salary: $54,100 to $68,556 Annually
  • Job Summary:  The duties of the individual in this position will include the following: Prepare purchase orders and change orders from approved requisitions in an automated financial system. Interact closely with agency staff throughout King County, and work with vendors and contractors to ensure that county business is conducted openly, inclusively, and provides the best value.  Support fellow procurement staff in developing bids, specifications, tabulations, and solicitation documents.  Monitor expenditures and other forms for compliance.  Establish and administer small dollar value contracts for individual agencies.  Resolve contract and procurement issues.
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC