Revising GC/CM Contract

I've recently been working on revising the University of Washington's GC/CM construction contract to accommodate changes to the GC/CM law recently passed by the Legislature (SSHB 1506). There are some provisions in the new law that impact how an agency administers these projects.

Training on WA Construction Law

There will be a two day training session on Washington state construction law issues offered in Seattle on September 20th and 21st at the Washington State Convention and Trade Center. It will be taught by 18 well-respected professionals in the industry, primarily attorneys, including Paul Cressman, John Ahlers, Christopher Soelling, Bruce Babbitt, and Greg Guedel. The cost is $695 ($625 for government employees). It is sponsored by The Seminar Group. For more information, visit their website.

New Draft of Responsibility Guidelines

Based on the July 24th meeting of the Task Force on Bidder Responsibility Guidelines (part of CPARB's Industry-Wide Subcommittee), I revised the draft of the suggested guidelines onFriday and sent it to the task force members for review. The Industry-Wide Subcommittee will meet on Monday, August 6th to review the guidelines. We still need to fill in the details of the appendices to the guidelines.

Bid Opening

On Thursday, I conducted a bid opening at the University of Washington Tacoma for a $6.3 million new assembly hall building. With five minutes before the bid receipt deadline, we had received no bids. Then two bids came in. With one minute to go, another bid was clocked in. With nine seconds before the deadline, another bidder raced in. The final bidder, who had been madly filling in the final figures in a chair just steps from the bid counter, slapped their sealed bid on the counter with a nail-biting three seconds before the clock struck the 2:00 p.m. deadline. Interestingly, the low bidder was the first one to submit its bid. My effort in Tacoma was part of training the staff there on receiving and conducting bid openings on their own. I've developed a set of written guidelines and procedures, laying out issues to be aware of in managing bid receipt and opening. If you'd like a copy of the guidelines as part of thinking about your own practices, please let me know and I'd be glad to e-mail you a copy.

Changes in Small Works Roster Law

SHB 1328, which became effective on July 22nd, provides additional tools to public agencies using the Small Works Roster process for public works construction projects. While some of the requirements of the legislation are not particularly clear (at least to me), here's my understanding of the impact of the new statute:

1) For a Limited Public Works project (less than $35,000) under the Small Works Roster process, a public agency may restrict which contractors to solicit bids from to those on the Roster with gross revenues less than $1 million annually as reported on the contractor's annual federal income tax return.

2) For a Small Works Roster project (less than $200,000), a public agency may "encourage" contractors with gross annual revenues under $250,000 to submit bids. The practical impact of this provision isn't particularly clear as it seems that a public agency has always had the ability to "encourage" contractors, regardless of gross revenue, to apply for a Small Works Roster and to subsequently submit bids under that process.

News from the Bidder Responsibility Task Force

CPARB's task force on developing bidder responsibility guidelines for public agencies met on Tuesday morning to review the second draft of the document. There was general consensus about the content of the guidelines with a few relatively minor changes. There was discussion about including in the subcontractor responsibility contract language a provision that the contractor would be required to submit documentation of verification of subcontractor responsibility to the owner upon the owner's request. Members of the task force expressed an interest in talking with others before including this provision.

The appendices still need to be developed further (list of suggested supplemental criteria, examples of actual criteria used by various agencies, resource contact list, and Powerpoint slides of training on bidder responsibility that I did in June).

CPARB's Industry-Wide Subcommittee (to which the task force reports) canceled their August 3rd meeting due to the lack of a quorum. Hopefully, another meeting of the subcommittee will be held on August 6th so that the subcommittee can report back to CPARB at its August 9th meeting.

Assignment of RCW Numbers

Sometime in August, the Washington State Office of the Code Reviser expects to complete its assignment of actual Revised Code of Washington (RCW) numbers to legislation passed in the last legislative session.

Until then, you can refer to the Legislature's website on legislation for information about specific bill numbers. The Legislature also maintains a website of all RCWs that will be updated in August to reflect the newly passed legislation. This website is a helpful tool since you can also do an electronic word search within a particular law (press ctrl F to search).

Employment Security Dept. Number

The new bidder responsibility legislation, which became effective on July 22nd, requires that public agencies verify that a bidder with a low responsive bid is "responsible" and meets the mandatory criteria outlined in the law (SHB 2010) before awarding a contract. One of the criteria is that the bidder must, if applicable, have an Employment Security Department number. Because this information is not publicly available through a website to verify, like other mandatory criteria, I have chosen at the University of Washington, to add a line to the UW's bid form asking bidders to include this information. The language in our Instructions to Bidders then reserves the right to ask a bidder for additional information verifying that they have an Employment Security Department number (or other required numbers). We will decide on a case-by-case basis whether we need to obtain this further validation that the bidder actually has an Employment Security Department number.

Training Reminder

On August 1st, the Washington State Chapter of NIGP (National Institute of Governmental Purchasing) will offer a one day class in Everett on the "Basics of Public Works Contracts Administration," taught by Charlotte Walther, Procurement and Contracts Administrator for the Port of Everett. Charlotte is a very knowledgeable resource. If you'd like a copy of the flyer for this class, you can contact me (http://www.mpurdy.com/contact/) and I'll e-mail it to you. You can register for the class online at http://www.wanigp.org/insidepages/meetings.cfm#19.

New Laws Effective on Sunday

SHB 2010 (Bidder Responsibility) and SHB 1328 (Small Works Roster and Dollar Threshold Consistency), along with other legislation approved by the Legislature this spring, will become effective this Sunday, July 22nd.

The legislation extending and modifying the provisions for alternative public works contracting (GC/CM, Design/Build, and Job Order Contracting) became effective on July 1st.

If you'd like training on any of this new legislation, have any questions, or would like help in making changes to implement the new laws, please let me know.

Construction Industry Report

The cost estimating firm Davis Langdon has recently released its 2007 second quarter report on the state of the construction industry. The report, which addresses issues such as price escalation and labor shortages, concludes that escalation will continue to be a concern, but at a reduced level. The report states that material prices are beginning to stabilize and the volatility in strategic materials and commodities, to abate. A copy of their 14 page report may be found at the following website: 2nd Quarter Construction Market Report.

Minor Change to Bidder Responsibility Language

I've made a couple of minor changes to the mandatory bidder responsibility language for bidding documents, and the subcontractor bidder responsibility language for contracts. I've added the words "as a contractor" to the criterion that the contractor must have a current certification of registration so that the language would now read in part as follows: "Have a current certificate of registration as a contractor in compliance with chapter 18.27 RCW..." You can find the current text of what I'm suggesting be used at my website at http://www.mpurdy.com/resources/

Let me know if you have any questions about this.

Draft Bidder Responsibility Guidelines

As part of chairing the task force for bidder responsibility guidelines (under the Industry-Wide Subcommittee of the Capital Projects Advisory Review Board - CPARB), I've developed draft guidelines that the task force has discussed. I've made revisions to the guidelines based on comments at the task force meeting on June 29th and sent them to the task force for comments. Once adopted by CPARB, the suggested guidelines will be published on CPARB's website.

In the meantime, if you have any questions about what you need to do to implement the new bidder responsibility legislation (SHB 2010) that becomes effective on July 22nd, please let me know. I'm glad to provide free advice on the subject to help you on your way.

Free "Global Construction Survey"

KPMG, an international auditing firm, recently conducted a 2007 Global Construction Survey looking at construction procurement for the 21st century. I have a copy of this 32 page report as a PDF that I would be glad to e-mail to you upon request. E-mail me at mpurdy@mpurdy.com for a copy.

The report states that "the single overwhelming conclusion that can be drawn from our study is that the shortage of qualified contractors is without doubt the biggest challenge to new construction projects in the future." Other issues deal with the increasing complexity of projects and risk transfer issues.

MRSC Posts Legislative Updates

The Municipal Research & Services Center (MRSC) recently posted to their website the Powerpoint training that I recently did on 2007 Legislative Updates. You can find it at the following website address: http://www.mrsc.org/Subjects/PubWorks/pwcontracts.aspx#pres

As I mentioned in an earlier entry, the training is also available on NIGP's Washington State Chapter website: http://www.wanigp.org/insidepages/newsletters.cfm

Let me know if you have any questions as you work through implementing these new laws.