Audit Finding on Competitive Bid Laws

The Washington State Auditor’s Office has issued a finding that the Northshore Utility District in King County did not comply with public works competitive bidding requirements.

After awarding a $1.3 million project for the extension of sewer and water lines in five neighborhoods, the District issued four change orders that the auditor found “were for work not within the original scope of the project.”

The District responded by stating that the work needed to be performed in order to provide appropriate service.

For more detailed information about the finding and the District’s response, please click here.

While there is no specific state law addressing change orders, it is clear that the Auditor’s Office has determined that if, in their opinion, the work is outside the original scope of work, then it should have been bid as a separate project. This would constitute what is frequently referred to as a “cardinal change.”

One of the lessons learned from this audit is that if a public agency has an emergency project (one that is officially declared an emergency and for which competitive bidding requirements are waived), that work may be added by change order to an existing, even unrelated project. If, however, the work is not officially declared an emergency, all the normal competitive bidding requirements apply.

I have developed a training session on what are appropriate versus inappropriate types of change orders. If you are interested in discussing having me provide this training for your agency, please contact me.