Wednesday, January 28, 2015

How Not to Implement Bidder Responsibilty Criteria on a Project

Establishing bidder responsibility criteria on public works construction projects can be a good idea.  It helps ensure that the low bidder is, in fact, capable and qualified to successfully perform the work.  Some public agencies, however, go about implementing responsibility in ways that are counterproductive and lack transparency. 

City of Des Moines, Iowa:  In September 2014, the City of Des Moines adopted what they grandiosely call the "City of Des Moines Taxpayer Quality Assurance Policy."  It only applies for building or facility projects estimated to cost more than $1 million.  In essence, it is intended to be a bidder responsibility law, but it is flawed in a number of ways:
  • More Prequalification than Responsibility:  The law requires that all contractors interested in bidding on a project must complete and submit "no later than two weeks prior to the deadline for accepting bids" a "General Contractor Quality Assurance Questionnaire" and respond to 26 questions.  Establishing bidder responsibility is generally determined after bids have been opened to assess whether the low bidder is responsible.  The City of Des Moines' questionnaire begins to look more like a prequalification process.
  • All bidders must complete questionnaire:  Unlike bidder responsibility practices, the City is requiring all bidders to complete and submit the questionnaire.  Because of the length and complexity of some of the questions, this may cause some bidders to decide not to bid on city work, thus reducing competition and increasing prices, or to bid on the project but increase their prices to recoup their costs in completing the questionnaire and to deal with the hassle of bidding with the City.
  • Responsiveness vs. Responsibility:  The City's practice of requiring the questionnaire prior to bidding makes submission of the form a matter of responsiveness initially before an analysis is even made of whether the bidder is responsible. In other words, if a bidder fails to submit the questionnaire by the deadline, presumably their bid is non-responsive. Documentation of bidder responsibility should never be made part of the bid process, but requested of the low bidder after bid opening.
  • Questionnaire is subjective:  The questions asked by the City are not actual bidder responsibility criteria, but collects information about which the City does not disclose what the basis will be of their evaluation of the questionnaire.  In other words, to properly implement bidder responsibility, there must be actual criteria and standards, so that anyone looking at the documentation submitted should be able to come to the same conclusion about whether the bidder met the criteria or not.  
Misguided effort:  The City of Des Moines' attempt to ensure responsible bidders is ultimately misguided.  It creates a subjective process that will discourage competition and increase costs. The policy also attempts to fix a non-existent problem.  According to the City's engineers, "in general, the City of Des Moines has not experienced major issues in its public bid construction program." Click here to read an excellent and more detailed analysis of the City's law from the law firm of Fabyanske Westra Hart & Thomson. 

Use bidder responsibility criteria:  The preferred method for implementing bidder responsibility is to publish actual criteria in the bid documents, and to then request documentation from the low bidder a certain number of days after bid opening demonstrating that they meet the criteria.  Criteria should be crafted in such a manner to not unduly restrict competition, but to establish a baseline threshold of the ability of the bidder to successfully perform the work.  Click here to read "Suggested Guidelines for Bidder Responsibility" published by the State of Washington's Capital Projects Advisory Review Board.


Presidential History:
  • Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.comOn a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.
Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Tuesday, January 27, 2015

Should Work Be Bundled Together Into 1 Project or Broken into Separate Projects?

How do you define a public works construction project?  Should work for multiple subcontractor trades be bundled together into one larger project, or should it be broken into smaller separate projects?   

Issues with a bundled project:  There are a number of issues associated with bundling work into one project: 
  • Liability:  The general contractor, instead of the public agency, assumes the liability for performance of the entire project in accordance with the contract documents.
  • Schedule:  The general contractor, instead of the public agency, is responsible for scheduling the work of the subcontractors in an appropriate sequence in order to complete the work on time. 
  • Warranty:  Maintenance and warranty issues are simplified by having the general contractor as the public agency’s single point of contact for resolving warranty issues.
  • Small Businesses:  May negatively impact the use of small, disadvantaged, minority, and women owned businesses who might not be able to bid a larger project. 
Issues with separate projects:  There are a number of issues associated with breaking work down into separate projects: 
  • Schedule:  Managing the schedule for multiple subcontractors takes staff time for public agencies.
  • Expertise:  Managing and overseeing all of subcontractor trades requires a level of expertise that may be beyond that of a government project and construction manager.
  • Time for Managing Subs:  More administrative time is required for the public agency to manage all facets of construction with multiple subcontractors, rather than having the contractor manage it all.
  • Audits:  Multiple contracts may result in more exposure to audits and potential violations of ordinances and policies.
  • Procurement Regulations:  Splitting projects under bidding thresholds may violate procurement regulations, or at the least, give the appearance of inappropriate actions on the part of public agencies.
  • Streamlined Award:  Splitting a project into smaller bids may be a more streamlined process for internal approval of an award, requiring fewer levels of approval.
  • Cheaper:  No markup of subcontractor costs results in reduced direct costs for the public agency.
In the news:  A city manager in Georgia recently separated work out into multiple smaller projects less than $20,000 each in order to avoid obtaining approval of the city council for a larger project.  City of Covington city manager Leigh Anne Knight, also argued that it was done to save money, an argument that is difficult to prove.  The city’s planning director acted as the construction supervisor for the projects, leading the city council and mayor to assert that the planning director’s time would be better spent performing his duties as planning director.  The council will consider defining by ordinance what constitutes a “project.”  For more information about this story, click here.


Presidential History:
  • Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.comOn a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.
Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Monday, January 26, 2015

Seminar: Alternative Project Delivery

Seminar:  Alternative Project Delivery

When:  Friday, March 13, 2015 (all day) 

Where:  Bellevue, WA (Red Lion Inn) 

Agenda:  In the last few years there have been significant changes to the General Contractor/Construction Manager delivery method to include Heavy Civil Construction projects, and to the Design-Build delivery method to include Progressive Design-Build.  This seminar will have presentations from owners, contractors, and consultants on how they select and manager Alternative Project Delivery, and the risks and benefits associated with these delivery methods.

Sponsored by:  Pacific Northwest Chapter of CMAA (Construction Management Association of America


Presidential History:
  • Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.
Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Thursday, January 22, 2015

Job Opening: Procurement Program Contracts Manager

Washington State DSHS (Department of Social and Health Services)
  • Position: Procurement Program Contracts Manager
  • Location:  Olympia, Washington
  • Closing Date:  February 15, 2015 at 11:59 pm Pacific Time
  • Salary: $63,144 to $81,600 Annually
  • Job Summary:  This position provides and is responsible for oversight, research and analysis pertinent to DSHS procurements and contracting; performs complex and high-level staff work related to statewide procurement and contracting issues; and foresees, identifies, and resolves statewide issues related to DSHS procurements and contracting.
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Job Opening: Regional Manager, National IPA

National IPA (National Intergovernmental Purchasing Alliance)
  • Position: Regional Manager, Lead Contract Specialist
  • Location:  West Region (CA, AZ, WA, NV, ID, OR, UT).  Successful candidate should live in the West Region
  • Closing Date:  Open Until Filled
  • Job Summary:  The Regional Manager (RM) is an executive position responsible for developing relationships with institutions of higher education and suppliers.  Working with purchasing and other professionals at universities and community colleges, the RM will engage collaboratively with major suppliers to increase utilization of the National IPA contract portfolio and Novation contracts. The RM will report to the Group Director – West Region, live within the Region and should expect to travel up to 50% of the time. 
  • Responsibilities:  Responsibilities will include, but not be limited to:
    • Identifying new business opportunities within the higher education marketplace.
    • Providing training and sales support for National IPA’s supplier partners.
    • Developing strong business relationships and engaging key stakeholders.
    • Cultivating contract utilization for large spend categories.
    • Supporting company sales and marketing initiatives.  
  • Qualifications: 
    • Purchasing experience in higher education, public sector or a minimum of 3 years direct sales experience (preferably in the higher education sector).
    • Bachelor's degree required.
    • Located in the West Region (CA, AZ, WA, NV, ID, OR, UT)
  • Skills and Abilities: 
    • Excellent communication, negotiation, and presentation skills.
    • Excellent organizational and project management skills with ability to work collaboratively in a dynamic work environment.
    • Customer focused with strong relationship building skills.
    • Professional, self-motivated, assertive and driven to succeed.
    • Ability and skills to work from virtual office environment
     
  • About National IPA:  National Intergovernmental Purchasing Alliance (National IPA), a Provista Company, is a privately-owned Group Purchasing Organization (GPO) in the public, education and non-profit market sector.  The National IPA was established through a collaborative effort of public agencies across the United States with the specific purpose of reducing procurement costs by leveraging group volume.  National IPA aggregates purchasing volume of participating public agencies across the country in order to receive larger volume discounts from suppliers.  There are over 56,000 public, education and non-profit agencies nationwide that participate in the National IPA cooperative purchasing program. More information about National IPA is available at www.nationalipa.org.
Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Wednesday, January 21, 2015

Federal Bid Protests Increase in 2014

Bid protests on federal procurements increased by 5% in FY 2014 over bid protests filed in FY 2013.  There were a total of 2,561 bid protests filed with the federal Government Accountability Office (GAO), up from 2,429 filed in FY 2013.
 

Reverses decrease from previous year:  The increase in bid protests reversed a slight 2% decrease in FY 2013, which marked the first time in a number of years that the number of protests had actually declined.  The following shows the percentage change in bid protests since 2006. (The federal fiscal year runs from October 1 through September 30 of each year.)
  • 2006 to 2007 - 6% increase
  • 2007 to 2008 - 17% increase
  • 2008 to 2009 - 20% increase
  • 2009 to 2010 - 16% increase
  • 2010 to 2011 - 2% increase
  • 2011 to 2012 - 5% increase
  • 2012 to 2013 - 2% decrease 
  • 2013 to 2014 - 5% increase
Reasons for protests:  GAO reports the following as the most prevalent reasons why they sustained protests filed with them during the 2014 fiscal year:

  • Failure to follow the solicitation evaluation criteria
  • Flawed selection decision
  • Unreasonable technical evaluation
  • Unequal treatment of offerors
More Information:  Click here to read the complete GAO report to Congress on bid protests during FY 2014 (7 pages). 
Practical Tips:  Make sure you have a comprehensive and independent quality control process for reviewing your solicitation documents before they are advertised to ensure that the selection process and requirements are clear.  Your solicitation documents should also define your agency's protest procedures, which may be partially governed by your state law.
Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Tuesday, January 20, 2015

Training: Public Works Bidding and Contracting

2 Day Class on "Public Works Bidding and Contracting"

Mike Purdy
When:  February 26-27, 2015 (8:00 am to 5:00 pm) 

Where:  Kennewick, Washington 

Instructor:  Mike Purdy 

Training Outline:  This two day "Public Works Bidding and Contracting" class will cover the following subjects:

  • Types of Public Works Contracts
  • What is a Public Work, Ordinary Maintenance, and Maintenance?
  • On-Call Public Works Contracts and the State Auditor's Office
  • Small Works Rosters
  • Developing Bid Documents
  • Bid Receipt and Opening
  • Bonds and Insurance
  • Bid Responsiveness
  • Bidder Responsibility
  • Bidding and Award
  • Prevailing Wages
  • Change Orders
  • Retainage and Contract Close-out
Cost:
  • $140 - WA NIGP Chapter members
  • $180 - Non-WA NIGP Chapter members
Sponsored by:  Washington State Chapter of NIGP

Information and Registration:  Click here. Don't delay as decision whether there are enough registrants to hold the class must be made in the next week or so.
Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com