Substitute SB 6235 - Poor Public Policy

SB 6235 was introduced in response to the recent audit of the Port of Seattle conducted by the State Auditor’s Office. In fact, the recommendations in SB 6235 exactly match the recommendations that the auditors made to the Legislature. On Thursday, January 31, 2008, there was a public hearing on the bill – actually, according to my information – on a substitute bill. As of this writing, however, the substitute bill has not been posted to the Legislature’s website. However, I have reviewed a copy of it, and will be glad to e-mail it to you upon request.

One of the most problematic sections of SB 6235 was an attempt to redefine “public work” to include consultant services and architectural and engineering services, something that doesn’t make much sense. If approved in that format, it would require these consultant services to be bid based on price, a direct contradiction of RCW 39.80 requiring that four disciplines be selected based on qualifications and then negotiating the price with the most qualified firm. The four affected disciplines are architectural, engineering, landscape architectural, and land surveying. The current practice under RCW 39.80 is known as Qualifications Based Selection.

Under the substitute bill for SB 6235, the redefinition portion of public works is eliminated. However, it is replaced with an equally problematic structure, and one that doesn’t make a lot of sense in light of the Port of Seattle audit, and goes in the opposite direction of the original bill that would require more types of work to be bid. Part of the substitute bill would change and add definitions to RCW 39.80, the A&E Qualifications Based Selection statute, so that fewer types of contracts would actually be bid.

In the substitute bill, a new definition of “other construction-related services” would be added as follows: “’Other construction-related services’ means other consultant services provided by any person, other than as an employee of the agency, in connection with and furtherance of any public work, including project management, construction supervision, construction management, land surveying, environmental services, technical testing, and inspection services. Other construction-related services do not, however, include legal services, accounting or auditing services, claims consultant services, or other similar services that may be required in connection with any public work.”

Another new definition of “Public work consultant services” is also added in the substitute bill meaning “architectural, engineering, and other construction-related services provided by a consultant.”

The impact of these new definitions is to add new categories to a Qualifications Based Selection process (project management, construction supervision, construction management, land surveying, environmental services, technical testing, and inspection services). This flies in the face of the Port of Seattle audit in which the Port was criticized for not selecting consultants in a competitive manner. Under this proposal, an agency could no longer use price as one of the factors in selection. In other words, none of the work of “other construction-related services” could be bid, nor could price even be one factor in the evaluation process. Instead, agencies would be forced to select the most qualified firm, and then negotiate with the firm, a practice that puts the agency at a disadvantage in obtaining the best possible price.

Furthermore, the substitute SB 6235 is flawed in that it defines “land surveying” twice. Under the current statute, land surveying is part of what is already covered by RCW 39.80 as it is within the professional practice defined in chapter 18.43 RCW and referenced in RCW 39.80. In the proposed definition of “other construction-related services” land surveying is also added to that list.

One of the critical distinctions between the current four disciplines covered under Qualifications Based Selection (architectural, engineering, landscape architectural, land surveying) and the proposed additional disciplines is that the current disciplines each require registration or licensing in the State in order to practice that discipline. None of the proposed additional disciplines meets that test of being a licensed profession.

Clearly the intent of substitute SB 6235 is directed at port districts. Notice that in Section 9 of the substitute bill, it specifically indicates that port districts must comply with chapter 39.80 RCW “in the procurement of all architectural, engineering, and other construction-related services.”

The problem with the substitute version of SB 6235 is that it is not good public policy for it removes from the competitive bidding arena a number of types of work that have been traditionally selected based on both qualifications and price. The proposed legislation would require selection only based on qualifications. I’m not sure that the drafters of the legislation understand the negative public policy impacts of attempting to tinker with the law in order to control port districts. Or maybe they do understand better than I think and this is an attempt by business to gain an upper hand in contract pricing with public agencies. Instead of having to live with their bid, firms in the disciplines to be added would negotiate with the public agency – a practice that puts the agency at a clear disadvantage.

Different sections of Washington state law are highly interconnected and without a clear understanding of those sections, attempting to make changes often results in negative unintended consequences.

There are other important technical flaws to the legislation. It proposes adding “consulting, architectural, engineering, or other services” to RCW 39.30.020 where it is stated that violations by an agency official of any law or regulation “requiring competitive bidding” subjects the official to civil penalties. The problem is that “consulting, architectural, engineering, or other services” do not require competitive bidding, especially if the other provisions of the substitute bill are adopted that would remove from competitive bidding the disciplines noted under the proposed definition of “other construction-related services.”

The proposed legislation also deals with other issues as well.

Bottom line: the substitute SB 6235 is a poorly thought-through piece of legislation that would have negative impacts on the public’s ability to obtain services at competitive prices – just the opposite of what the State Auditor argued for in their audit of the Port of Seattle. It should be opposed vigorously by public agencies. The views in this blog represent my personal opinions alone.