Wednesday, December 30, 2009

Happy New Year!

Best wishes for a healthy, peaceful, and prosperous New Year!

Annual Meeting of NIGP's Washington State Chapter

The Annual Business Meeting of the Washington State Chapter of NIGP (National Institute of Governmental Purchasing) will be held on Tuesday, January 12, 2010.

Where: City of Seattle - City Hall (600 4th Avenue, Seattle, WA, Bertha Knight Landes Room)

Time: 8:30 a.m. to 3:00 p.m.

  • Arun Raha - 2010 Economic Outlook
  • Steve Krueger - 2010 Legislative Issues Affecting Purchasing
  • Chapter Member - $20
  • Non-Chapter Member: $50
  • National NIGP Member Only: $50
  • Annual Business Meeting
  • Training
  • Honors and Awards
For more information and to register, visit the website of NIGP's Washington State Chapter.

Tuesday, December 29, 2009

Summary of 2009 Training and Speaking by Mike Purdy

It's been a busy year!

Below is a summary of the training and speaking I've done during 2009.

If you are interested in me providing training for your agency or speaking to your association, please contact me.

I'll be posting a list soon of training and speaking that I have scheduled so far for 2010.

Monday, December 28, 2009

Minimum Wages in 2010

The San Francisco law firm of Littler Mendelson PC maintains a helpful "Wage and Hour" blog.

In their December 21, 2009 blog entry, they note that the federal minimum wage rate will remain at $7.25 per hour in 2010.

They also note that Alaska, Connecticut, and Kansas will increase their minimum wages, while Colorado will decrease their minimum wage. The blog entry also notes a number of states that will not be making any changes to their minimum wage rates in 2010.

Click here to see the blog entry with additional details.

NJ Considers Law to Require Union Contractors on Public Works

The New Jersey Legislature is considering a bill that would have the impact of requiring that all contractors on public works projects be union contractors.

The provisions of the bill would mandate that all contractors and subcontractors on public works projects to participate in an apprenticeship program for each trade or classification in which they employ craft workers.

Because unions are the primary sponsors of such apprenticeship programs, the bill would require non-union contractors to sign collective bargaining agreements in order to bid on public projects - in practice, a backdoor Project Labor Agreement (PLA) requirement.

Under the guise of construction workforce development and protection of worker safety, this legislation is an example of efforts by organized labor throughout the nation to eliminate non-union competition. Government agencies should resist such efforts that have the impact of limiting competition on public works projects and increasing costs. All contractors, regardless of whether they are union or non-union, should have the ability to bid on public projects.

For a brief article with more details on the subject, visit the website of Fox Rothschild LLP, a law firm.

To read a copy of the proposed New Jersey legislation, Assembly Bill 4305,
click here.

In Washington State, legislation has been expanded over a number of years and now requires various public agencies in the state to require that 15% of the labor hours on public works projects over $1 million be performed by apprentices enrolled in a state approved apprenticeship and training program. RCW 39.04.320 affects the state department of transportation, the state department of general administration, all school districts, and all universities and colleges.

Sunday, December 27, 2009

Top 20 Public Contracting Blog Stories of 2009

Out of more than 370 blog entries I've written during 2009, I've highlighted below a list of 20 of the top stories and entries.

I hope you continue to find this Public Contracting Blog helpful. More to come in 2010!

  1. State of Washington Delays Implementation of New Retainage Release Law

  2. Retraction of Previously Published Prevailing Wage Rates

  3. Mike Purdy Announces Retirement - Will Continue Consulting

  4. W.A. Botting Files for Bankruptcy

  5. New Washington Public Works Laws Effective July 26, 2009

  6. County in Florida Considers Local Preference Ordinance

  7. Comparing Data from Prevailing Wage Worker Interviews with Certified Payrolls

  8. Report on Accuracy of Cost Estimates for Capital Projects

  9. A Dozen Tips for Public Works Specifications

  10. Lump Sum vs. Not-to-Exceed Contracts

  11. How to Check if a Contractor is Debarred

  12. Revised Standard Design-Build Contracts Released

  13. Allowable vs. Unallowable Overhead

  14. Non-union Contractor Challenges Federal "Project Labor Agreement" Requirement

  15. Qualifications and Price as Selection Criteria

  16. Responsive Bids and Responsible Bidders

  17. $9 Million Bid Transposition Error: Airport Staff Recommends No Correction is Permitted

  18. Is Failure to Acknowledge Addenda a Material Irregularity?

  19. Public Works Bribery Case in Tulsa

  20. 5 Keys to Making Ethical Contracting Decisions
If you're not already a subscriber to Mike Purdy's Public Contracting Blog, I encourage you to sign up for a free e-mail subscription. Every time I post a blog entry, you'll receive it by e-mail. To sign up, follow the instructions in the upper right hand corner of the Blog.

Tuesday, December 22, 2009

Merry Christmas!

Best wishes to you and your family as you enjoy time together during this holiday season!

Monday, December 21, 2009

31 States Permit Design-Build for State Transportation Projects

A total of 31 states permit state transportation departments to use Design-Build.

Another 14 state DOTs have some form of Design-Build authorization, but with some limitations.

There are only 5 states that do not have any such Design-Build authority (Nebraska, Iowa, Indiana, New York, Connecticut).
Source: December 2009, Dateline, The Journal of The Design-Build Institute of America (DBIA)

Sunday, December 20, 2009

Contractor Gets 5 Years in Jail in Tulsa Bribery Case

An Oklahoma contractor, Max E. Wolf, will serve four years and nine months in jail for bribing a government employee to approve inflated invoices on City of Tulsa public works projects. Wolf pleaded guilty in September 2009 and was sentenced on December 14, 2009.

Harlan Eugene Yocham of Yocham Enterprises was also sentenced to prison for paying a $7,000 bribe to the same Tulsa employee to approve a "fraudulent and inflated" invoice. Yocham will serve five month in prison and then another five months of home detention.

For more information about the sentencing,
visit the website of the Tulsa World.

For additional background information about this wide-ranging bribery scandal that also included others, click here to read other blog entries I've written.

Wednesday, December 16, 2009

When to Disclose Selection Scores for Qualifications Review

Under some selection methods, a contractor is chosen based partially on qualifications and partially on certain prices they bid. For example, this is true in Washington State when selecting a contractor for either General Contractor/Construction Manager (GC/CM), Design-Build, or Job Order Contracting.

In such a situation, the price is usually requested only from a shortlist of finalists after the qualifications (and maybe an interview) have been evaluated.

It is very important that the scores for the qualifications and interview not be disclosed to the contractors prior to them submitting their prices. If these scores are disclosed to them prior to the submission of the price bid, the contractor is in a position to determine how low they need to bid in order to get the project. This may result in a contractor essentially "buying" the job with a low price, and does not result in a truly competitive selection process.

Be sure that any evaluation committee members or others in your agency who have access to the qualification and interview scores know that this information should remain confidential until submission of the bid prices.

Tuesday, December 15, 2009

Ohio Ponders Elimination of Multiple Prime Construction Awards

As part of an initiative to plug an $851 million hole in the State of Ohio's budget, the state's Construction Reform Panel has recommended elimination of a practice in which public agencies are required to hire a separate contractor for general construction, heating and cooling, plumbing, and electrical work.

The Ohio Construction Reform Panel noted that using a single prime contractor for a project could result in cost savings due to fewer lawsuits and in projects being completed faster. Click here to read the April 2009 report of the Panel.

Visit the website of the northern Ohio based News-Herald to read an editorial on Ohio's consideration of moving toward a single prime contracting model for construction.

The multiple prime contracting methodology, which is used by only a few states, is counter to trends in the construction industry toward more seamless integration of all parties in the process. This trend toward more efficient systems is characterized by what is known as Integrated Project Delivery (IPD).

Integrated Project Delivery is defined as a "project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to reduce waste and optimize efficiency through all phases of design, fabrication and construction." (AIA California Council)

The multiple prime contracting model also is not consistent with principles embedded in what is known as Lean Construction. Visit the website of the Lean Construction Institute for more information.

Monday, December 14, 2009

High School Project in Spokane Approved to Use GC/CM Process

The Spokane School District (Washington) received approval on December 3, 2009 to use the General Contractor/Construction Manager (GC/CM) alternative public works contracting procedures on the $91 million Ferris High School improvements project.

The approval came from the
Capital Projects Advisory Review Board's (CPARB) Project Review Committee.

GC/CM contracting in Washington State is authorized in chapter 39.10 of the Revised Code of Washington (RCW).

To read a copy of the application of the Spokane School District to use GC/CM, please click here.

If your agency is planning to use GC/CM or is currently using it, and you need advice or help, please contact me to discuss how I might be of assistance.

Sunday, December 13, 2009

How to handle a bid that is too low

In the world of public works construction contracting, public agencies are required to award the contract to the responsible bidder submitting the low responsive bid.

Bid is Too Low: But what should a public agency do when the low responsive bid (from a responsible bidder) is so low that the public agency is concerned about the bidder's ability to perform the work?

Impact of Economy on Bidding: Over the last year, as our economy has fallen, most public agencies are receiving significantly lower bids, lower than the estimate, as contractors have shaved profit and expenses just to win the job and keep their workers employed.

Low Bid Concerns: Often a bid may be so low that the public agency has concerns about whether the low bidder really understands the complete project, or whether the public agency will be subsequently badgered to approved unjustified change orders.

Meet with the Bidder Before Award: Before awarding a bid that is significantly lower than the estimate, and lower than the range of other bids, the public agency should meet face-to-face with the contractor to review the scope of the work, the contractor's understanding of the work, and the contractor's original bidding spreadsheets. The purpose of this conversation should be to ensure that the bidder is comfortable with their bid. If the owner has concerns, the owner should attempt to convince the bidder to request withdrawal of their bid.

Risks of Low Bid Contracting:
A public agency should not be anxious to enter into a contract with the low bidder just because they are the low bidder, if their bid does not cover all of the work. Likewise, a contractor who has left major elements of the work out of their bid should be petitioning the owner to let them withdraw their bid. A project where the margin of profit is so low or non-existent can often be the project that puts a contractor out of business.

Letting the Bidder Withdraw Their Bid: In the event the contractor determines that their bid price is unreasonably low, they may request the owner to let them withdraw their bid without forfeiture of their bid guarantee. Such a request is really in the best interest of all parties. A project that begins with the contractor believing they will lose money on the project is not likely to be a particularly successful project.

Claim of Error: Typically, bidding documents for public agencies will have provisions for how a bidder may claim error on their bid amount. Often, such notice under a claim of error provision must be given to the owner within 24 hours of the bid submittal deadline. However, a meeting with the bidder to review the details of their bid may not occur until after such a deadline. Nevertheless, the public agency has the discretion to accept a request for withdrawal of their bid, even after the claim of error deadline.

No Bid Negotiation: Whenever a contractor requests withdrawal of their bid, either within the claim of error deadline, or after a meeting with the owner to review their prices, it is important to remember that there should be no negotiation or adjustment of their bid price. The bidder has the option of agreeing to perform the work at their bid price or requesting to be relieved of their liability for the bid. Any adjustment to their bid price, even if they would still be the low bidder, results in bid negotiation, something that is prohibited by most state and federal laws governing public works construction projects.

Thursday, December 10, 2009

Northwest Chapter of DBIA to Hold Annual Meeting

The annual meeting of the Northwest Region of the Design-Build Institute of America (DBIA) will be held on Monday, December 14, 2009 at noon at the local offices of M.A. Mortenson Construction (14719 N.E. 29th Place, Bellevue, WA).

Nominees for new officers, to be voted on at the meeting, include the following:
  • President, Jim Yowan, M.A. Mortenson Company
  • Vice President, Eric Smith, University of Washington
  • Secretary, Bill Kent, M.A. Mortenson Company
  • Treasurer, Sian Roberts, Miller Hull
  • Past President, Robynne Thaxton Parkinson, Law Offices of Robynne Thaxton Parkinson
If you are planning to attend the meeting, please RSVP to Hank Sitko at

Wednesday, December 9, 2009

Verification of Subcontractor Responsibility

As many of you know, in 2007, the Washington State Legislature approved a new law dealing with bidder responsibility (RCW 39.04.350).

Mandatory and Supplemental Responsibility Criteria: That law establishes certain mandatory criteria that a low bidder on a public works project must meet prior to a public agency awarding a contract to them. The law also enables a pubic agency to establish relevant supplemental bidder responsibility criteria that are applicable to a project. It is up to the public agency to verify that the low bidder meets both the mandatory bidder responsibility criteria and any of the optional supplemental bidder responsibility criteria that the agency may have established for a project before award of the contract.

Subcontractor Responsibility: What is less well known is that the 2007 legislation also established subcontractor responsibility criteria that the contractor is responsible for verifying prior to execution of a subcontract. If a subcontractor hires lower tier subcontractors, they are responsible for verifying that their lower tier subcontractors meet the subcontractor responsibility criteria.

In addition, RCW 39.06.020 requires that every subcontract contain language including the subcontractor responsibility criteria and the requirement to verify the compliance of the subcontractor. From my recent reviews of a couple of subcontracts from fairly large and well-known general contractors, I've noted that they have not included this language in their subcontracts, even more than two years after the effective date of the new law.

The Capital Projects Advisory Review Board (CPARB) has published Suggested Guidelines for Bidder Responsibility for public agencies and contractors on how to comply with the responsibility laws. It includes suggested language that contractors can include in their subcontracts, and that subcontractors can include in their lower tier subcontracts. To view the entire guidelines, go to CPARB's website and click on Suggested Guidelines for Bidder Responsibility.

The following is the language in CPARB's guidelines:
A. The Contractor shall include the language of this section in each of its first tier subcontracts, and shall require each of its subcontractors to include the same language of this section in each of their subcontracts, adjusting only as necessary the terms used for the contracting parties. Upon request of the Owner, the Contractor shall promptly provide documentation to the Owner demonstrating that the subcontractor meets the subcontractor responsibility criteria below. The requirements of this section apply to all subcontractors regardless of tier.

B. At the time of subcontract execution, the Contractor shall verify that each of its first tier subcontractors meets the following bidder responsibility criteria:

1. Have a current certificate of registration in compliance with chapter 18.27 RCW, which must have been in effect at the time of subcontract bid submittal;

2. Have a current Washington Unified Business Identifier (UBI) number;

3. If applicable, have:
a. Have Industrial Insurance (workers’ compensation) coverage for the subcontractor’s employees working in Washington, as required in Title 51 RCW;

b. A Washington Employment Security Department number, as required in Title 50 RCW;

c. A Washington Department of Revenue state excise tax registration number, as required in Title 82 RCW;

d. An electrical contractor license, if required by Chapter 19.28 RCW;

e. An elevator contractor license, if required by Chapter 70.87 RCW.

4. Not be disqualified from bidding on any public works contract under RCW 39.06.010 or 39.12.065 (3).
Follow-up: If you are a public agency, you might want to check with your contractors and subcontractors about whether they are in compliance. You may also want to do some educational training with your contractors and subcontractors about this requirement. If you are a contractor or subcontractor, review your subcontracts to make sure they are in compliance with the law.

If you need any assistance, or would like me to conduct training on subcontractor responsibility as well as the mandatory and supplemental bidder responsibility criteria, please contact me.

Tuesday, December 8, 2009

Mike Purdy Announces Retirement

A Career in Public Contracting: In October of 1979, fresh out of MBA school, I began a career in public contracting that now spans more than 30 years – twenty-plus years managing construction and consultant contracts for the City of Seattle, followed by a five year stint as Contracting and Procurement Manager at the Seattle Housing Authority, and for the last four-plus years serving as the Contracts Manager at the University of Washington’s capital projects office.

It has been a rewarding journey and career, and I continue to learn new things everyday.

Retirement: But our lives are more than just careers, and the measure of our days is more than the routines of work. In order to pursue other interests in the second half of my life, I have decided to retire as of February 5, 2010.

Consulting: In my retirement, I plan to stay engaged with public contracting issues and spend more time providing consulting services and training to public agencies and businesses - helping them navigate through the complexities of public contracting.

Blogging: I will also continue to maintain this Public Contracting Blog, providing timely and relevant information to professionals who deal with government contracts.

Writing: I'm also looking forward to spending a significant amount of time writing. There are many ideas I have for books I would like to write that I have dreamed of over the years. Some I have begun writing, while others are only a title or a concept. I hope to bring some of these writing projects to completion and get them published.

Pace of Life: There are seasons in our lives, and this seems like the right time for me to make a change that will bring with it a different pace of life and new challenges. None of us are guaranteed any days, and while I’m still relatively young and healthy, I look forward to re-directing my time and energy into other pursuits.

I look forward to continuing to interact with all of you in the future! Keep in touch!

Monday, December 7, 2009

Qualifications and Price as Selection Criteria

In selecting a consultant, service provider, or contractor (under certain alternative public works contracting methods), both qualifications and price are important evaluation criteria.

It is an art form to determine, on a case-by-case basis, how to weight the points between qualifications and price.

Leaning Toward Qualifications: If the number of points is too heavily weighted toward qualifications, a public agency will get the most qualified firm, but may end up paying more for the service than could be obtained in a more competitively structured solicitation. This would occur, for example, if qualification related criteria was worth 85 points, while price was only worth 15 points.

Leaning Toward Price: On the other hand, if the number of points is too heavily weighted toward price, a company can essentially buy the contract by submitting a low price, even though they may not be the most qualified firm. This would occur, for example, if the points were reversed from the above example, and qualifications were only worth 15 points, but price was worth 85 points.

Factors to Consider: In making decisions on how to most appropriately allocate the weighting of the evaluation criteria, it is important to think about the following:
  • What type of service you are attempting to procure.
  • The local market and who is likely to bid or propose. Are the firms all qualified?
  • The relative importance of qualifications versus price in meeting your agency's objectives.
  • Is the project on a very tight budget?
  • Is the agency willing to pay more because of the critical need to obtain the most qualified firm?
Qualifications Based Selection: In selecting certain professional services, remember that many government agencies have laws that prohibit the use of price as a selection criterion when selecting architects, engineers, landscape architects, land surveyors, and other licensed professions.

For example, in the State of Washington,
chapter 39.80 of the Revised Code of Washington mandates a Qualifications Based Selection (QBS) process for these disciplines without using cost as a selection criterion. Likewise, the federal government's Brooks Act is also a Qualifications Based Selection process where price may not be used as an evaluation criterion.

Price as the Only Criterion: Other than these regulated professions, many laws require that price be either part of the selection criteria or, particularly in the case of goods and supplies and most public works, often the entire basis on which selection is made.

Alternative Public Works Contracting: In the State of Washington, three alternative public works contracting procedures (Design-Build, Job Order Contracting, and General Contractor/Construction Manager (GC/CM)) require selection partially based on qualifications and partially based on price. See chapter 39.10 RCW for more information or contact me.

Thursday, December 3, 2009

ARRA Websites

Many public agencies have developed websites dedicated to information on the American Recovery and Reinvestment Act (ARRA). These websites include information on funding received, projects implemented, jobs created, and reporting requirements.

The following are some websites you may want to look at:
More websites later...

Tuesday, December 1, 2009

Spokane Schools Seeks Approval to Use GC/CM

Spokane Public Schools has submitted an application to the State of Washington's Project Review Committee to use the alternative public works delivery method of General Contractor/Construction Manager (GC/CM) on renovations to Ferris High School, with an estimated construction cost of $77 million.

The Project Review Committee will consider the application at their December 3, 2009 meeting. GC/CM contracting is authorized by chapter 39.10 of the Revised Code of Washington.

To view the application from Spokane Public Schools, click here.

A Dozen Tips for Public Works Specifications

In writing or reviewing specifications for public works projects, here's a quick list of a dozen things to remember:
  1. Disputes. Write the specs with potential disputes in mind.

  2. Clarity and Simplicity: Specs should be clear to contractor, public agency, and outside parties.

  3. Say it Once: Address each subject once. Avoid re-writing in the technical specs items covered elsewhere in the contract documents.

  4. Definitions: Use consistently throughout. Identify abbreviations and acronyms.

  5. Make the Contractor Responsible: Assign responsibility to the contractor only, not to subcontractors, installers, or manufacturers. You only have a contract with the contractor.

  6. Avoid Submissions with the Bid: Let the bidders focus on submitting a good bid price, and avoid non-responsive bids when bidders don't submit materials with the bid that shouldn't be part of the bidding process.

  7. Means and Methods: Avoid directing the contractor on how to do the work.

  8. Level of Precision: Avoid unnecessary precision that can result in higher costs.

  9. Verifying Performance: You should be able to verify or check that the contractor met a given specification requirement.

  10. Streamlined Specs vs. Full Sentences: If using streamlined specs, make them clear and include explanatory paragraph that streamlined sentences should be interpreted with the meaning implied. Example of streamlined sentence: "Spread with notched trowel." Example of full sentence: "The contractor shall spread adhesive with a notched trowel."

  11. Use Active Voice: Use active, not passive voice, as it assigns responsibility more clearly.

  12. Avoid Ambiguous Words: Words to avoid include: and/or, any, as appropriate, as a minimum, shall function as intended, etc.
I will be teaching a class on Writing Effective Technical Specifications in Vancouver, Washington on March 3, 2010. Registration will begin sometime in late January or early February for this 5 hour workshop. Cost for early registration: $100. If you are interested in advanced information on the registration, please contact me.

Monday, November 30, 2009

Verifying Debarment Status on Federally Funded Projects

If a public agency receives federal funding for any project, one of the requirements is that the agency check to ensures that the selected vendor, contractor, or consultant is not debarred or suspended from doing business with the federal government.

It is easy to check the federal debarment status of a company. Visit

Make sure you print out a copy of the web page showing that the company is not debarred and keep it in your contracting file for when you are audited.

The City of Yakima (Washington) was recently audited by the Washington State Auditor's Office who issued a finding for Yakima's failure to check the debarment status of a number of firms. To read the audit finding, click here.

Pacific County (Washington) also faced a similar audit finding from the Washington State Auditor's Office. Click here to read the audit.

Make sure your agency has a clear procedure for ensuring that the status of vendors, contractors, and consultants on federally funded projects is checked before entering into a contract with them.

Sunday, November 29, 2009

Training in Spokane: Fundamentals of Construction Contracts

Training: The Fundamentals of Construction Contracts: Understanding the Issues

When: December 11, 2009

Where: Spokane, Washington

Cost: $359

For more information and to register, click here.

Sponsored by: Lorman Education Services

  • James Majeskey
  • Jason T. Piskel
  • Tyan Yahne

Tuesday, November 24, 2009

Happy Thanksgiving!

Wishing you and your families and wonderful day of Thanksgiving! May it be a time to remember and reflect on the many things we have to be thankful for.

On October 3, 1863, in the midst of the Civil War, President Abraham Lincoln issued a Thanksgiving proclamation - the first one in an unbroken string of presidential proclamations to designate the last Thursday in November as a national day of Thanksgiving.

The following is the text of Lincoln's 1863 Thanksgiving proclamation:

The year that is drawing toward its close has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added which are of so extraordinary a nature that they can not fail to penetrate and soften even the heart which is habitually insensible to the ever-watchful providence of Almighty God.

In the midst of a civil war of unequaled magnitude and severity, which has sometimes seemed to foreign states to invite and to provoke their aggression, peace has been preserved with all nations, order has been maintained, the laws have been respected and obeyed, and harmony has prevailed everywhere, except in the theater of military conflict, while that theater has been greatly contracted by the advancing armies and navies of the Union. Needful diversions of wealth and of strength from the fields of peaceful industry to the national defense have not arrested the plow, the shuttle, or the ship; the ax has enlarged the borders of our settlements, and the mines, as well of iron and coal as of the precious metals, have yielded even more abundantly than heretofore. Population has steadily increased notwithstanding the waste that has been made in the camp, the siege, and the battlefield, and the country, rejoicing in the consciousness of augmented strength and vigor, is permitted to expect continuance of years with large increase of freedom.

No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God, who, while dealing with us in anger for our sins, hath nevertheless remembered mercy.

It has seemed to me fit and proper that they should be solemnly, reverently, and gratefully acknowledged, as with one heart and one voice, by the whole American people. I do therefore invite my fellow-citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next as a day of thanksgiving and praise to our beneficent Father who dwelleth in the heavens. And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings they do also, with humble penitence for our national perverseness and disobedience, commend to His tender care all those who have become widows, orphans, mourners, or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the interposition of the Almighty hand to heal the wounds of the nation and to restore if, as soon as may be consistent with the divine purpose, to the full enjoyment of peace, harmony, tranquility, and union.

In testimony whereof I have hereunto set my hand and caused the seal of the United States to be affixed.

Done at the city of Washington, this 3d day of October A.D. 1863, and of the Independence of the United States the eighty-eighth.


Monday, November 23, 2009

Comparing Data from Prevailing Wage Worker Interviews with Certified Payrolls

Most federally funded public works projects require the payment of federal prevailing wages and compliance with the Davis-Bacon Act (and related acts).

Federal prevailing wage provisions require the public agency to conduct interviews on the construction site with workers to inquire about how much they are being paid, to observe whether they are working within the classification they are being paid for, and to ask whether they are receiving overtime pay, where required.

The public agency then has the obligation to take the information from the employee interviews and compare it with the information reported by the contractor or subcontractor on their weekly certified payrolls. These payroll reports must be submitted to the public agency who is responsible for reviewing the payrolls to determine if the workers were paid appropriately. Discrepancies between the interviews and payrolls should be investigated further by the public agency.

A recent audit finding by the Washington State Auditor's Office found that King County failed to check the payroll reports even when employee interviews revealed that four subcontractor employees were potentially underpaid the prevailing wages due to them.

The audit also found that King County "did not have a process to determine whether the state of Washington prevailing wage rates or the federal Davis-Bacon Act wage rates were higher; therefore, the County was not able to ensure the contractor complied with the state law that stipulates the higher of the two wages must be paid to the workers."

Click here and go to page 24 of the report to read the finding for this item.

Report on the Accuracy of Cost Estimates for Capital Projects

The Washington State Joint Legislative Audit and Review Committee (JLARC) issued a 73 page report in late September 2009 publishing their findings on the accuracy of cost estimates for capital projects for ten state agencies. The study looked at projects over $5 million.

The report concluded that "a large majority of capital project cost estimates reviewed meet professional expectations for accuracy," and that the cost estimating practices used by the agencies was consistent with professional standards.

To read the report,
click here.

Job Opening: Contracts Specialist 3

The Washington State Department of General Administration is recruiting for a Contracts Specialist 3 position.

The salary range from $4,033 to $5,289 per month.

Filing closes on Friday, December 4, 2009

For more information and to apply, visit GA's website by clicking here.

Sunday, November 22, 2009

Prevailing Wages for GC/CM Preconstruction Services Contracts

Under Washington State's General Contractor/Construction Manager (GC/CM) project delivery method (known in other places as CM at Risk), the public agency initially enters into a pre-construction services contract with the selected contractor. See chapter 39.10 RCW.

The scope of work for this pre-construction services agreement typically covers tasks such as cost estimating, constructability reviews, and value engineering. Often, the contractor will be requested to perform limited physical or exploratory work. While a pre-construction services contract is normally viewed as a consultant agreement, to the extent the contractor is performing physical work, that work may be subject to prevailing wage requirements.

Thus, it is important for pre-construction services contracts to include language requiring the payment of prevailing wages when applicable. The following prevailing wage language may serve as a guide for public agencies in developing and negotiating a pre-construction services contract as part of a GC/CM project:
"To the extent that any of the work in this Pre-construction Services Contract is subject to the payment of prevailing wages, the Contractor shall comply with all applicable provisions of Chapter 39.12 of the Revised Code of Washington concerning prevailing wages, shall provide the Owner with all documents required therein, and shall pay not less than the prevailing rate of wage to such laborers, workers, or mechanics in each trade or occupation required for the work whether performed by the Contractor, subcontractor, or other person doing or contracting to do the whole or any part of the work subject to prevailing wages and contemplate by this Contract. The execution date of this Contract shall be the effective date for any prevailing wages required to be paid under this Contract. In any case, the Contractor shall not pay any person described herein less than the hourly minimum rate of wage."
A copy of the prevailing wages applicable as of the execution date of the pre-construction services contract must also be attached as part of the contract. If the project contains any federal funds, the prevailing wage language will need to be adjusted appropriately.

DBIA / AIA Joint Meeting in Seattle

Breakfast Meeting: In-House Design & Build

When: Friday, December 4, 2009

Time: 7:15 a.m. to 9:30 a.m.

Where: Rainier Club (820 Fourth Avenue, Seattle, WA)

Cost: $50 (DBIA members); $55 (non-members)

  • Joe Schneider (owner of JAS Design Build)
  • Anthony Maschmedt (founder of Dwell Development)
  • Julian Weber (architect of Dwell Development)
  • Chris Pardo (partner in PB Elemental Architecture)
For more information and to register, visit DBIA's website.

Wednesday, November 18, 2009

Contract Administrators are Risk Managers

One of the challenges for public agency contract managers and administrators is to define their role clearly, especially in relationship with others in the agency responsible for delivery of public works projects. The value that the contracting staff add to the process should be clearly articulated for the rest of the agency.

The contracting function should be viewed as a strategic partner in helping public agencies develop the most effective, efficient, and legal contracting approaches and methods, which will meet the objectives of the project.

Contract administrators also are a critical partner in helping public agencies mitigate against risks in the following areas:
  • Bid protests
  • Schedule delays
  • Cost overruns
  • Regulatory non-compliance
  • Contract disputes
  • Audit findings
By framing the role of the contracting department as a strategic partner and risk manager, better working relationships can be developed with those responsible for the delivery of the projects.

Tuesday, November 17, 2009

More Bid Protests Filed on Public Projects

With the current economic conditions, many public agencies are seeing an increase in both the number of bidders and bid protests on their projects, as bidders aggressively compete for a shrinking pool of available work.

Clark County, Nevada spokesman Dan Kulin noted recently that "In prior years, maybe one bid out of 10 would be challenged; these days it's more like one in four."

Some bid protests are legitimate, while others may border on frivolous. Regardless of the reasons, bid protests may negatively impact a project's schedule as the public agency evaluates the protest and responds to the protest by providing a careful process of hearing all the facts before making a decision. If the protestor chooses to take the protest to court through a lawsuit or a request for a temporary restraining order to block the public agency from awarding the project, additional costs and time delays have further impacts on the project.

The increase in bid protests is a good reminder for public agencies to be diligent in developing and reviewing public works bidding documents in an attempt to eliminate ambiguities and make the documents clear.

To read about various bid protests from around the nation, visit the section of my blog on Bid Protests to read about protests in California, Nevada, Ohio, Indiana, New Hampshire, and the District of Columbia.

Los Angeles County's New Transportation Projects

Dinner Program: LACMTA - Measure R and the New Transportation Projects in Los Angeles County

When: Thursday, December 3, 2009

Time: 5:30 p.m. to 8:30 p.m.

Where: Marriott @ LAX (5855 West Century Blvd, Los Angeles)

Speaker: Krishniah Murthy, Deputy Chief Management Officer, LACMTA (Los Angeles County Metropolitan Transportation Authority)

Sponsored by: Southern California Chapter of Construction Management Association of America

Cost: $60 for CMAA members, $90 for non-members

For more information and to register, visit the website of the Southern California Chapter of CMAA

Monday, November 16, 2009

Local Hiring Laws on Public Works Projects

With the downturn in the economy, some pubic agencies are imposing regulations that require contractors use a certain percentage of local workers on public works projects. The trend is being met with resistance from some quarters.

Stockton's Local Hire Law: On September 1, 2009, the City Council for the City of Stockton, California adopted a "Local Hire Ordinance that requires 50% of the workforce on a public works project of at least $100,000 be residents of the City of Stockton. To read the staff report and a copy of the ordinance, as well as view the video of those testifying both pro and con before the council, click here.

Workforce Qualifications: While the policy intent of the ordinance is clear, it may have unintended consequences. For example, most contractors have a regular, well-trained workforce that knows how to work together well. By requiring the contractor to hire at least 50% local residents, a contractor from out of the city would not be able to necessarily marshal the most qualified team with the right experiences to perform the project. Thus, the public agency may find that it takes more resources to monitor and manage the quality of construction.

Washington State Resident Hiring Law Unconstitutional: Many have also raised questions about the legality of local hire laws. For many years, the State of Washington had a law requiring 95% or more Washington State residents where more than 40 workers were used, and 90% or more Washington residents where less than 40 workers were used. In 1982, the Washington State Supreme Court declared that chapter 39.16 RCW was unconstitutional and violated the privileges and immunities clause of the U.S. Constitution, Article IV, Section 2.

To read a copy of the Supreme Court decision, Laborers Local Union No. 374, et al, Appellants, v. Felton Construction Company, et al, Respondents, click here.

Check Your Bidding Documents: Even though Washington State's law was struck down by the court 27 years ago, a simple Google search for "RCW 39.16.005" reveals a number of public agencies in the state who still reference this law in their standard bidding documents. Check your bidding documents and make sure you've updated your boilerplate language.

Cleveland's Local Hiring Law Struck Down: The City of Cleveland, Ohio faced a similar situation with their local hiring ordinance, the Lewis Law. The Federal Highway Administration, which was funding road work for the city withheld funds from the city because of the ordinance. The United States Court of Appeals held that FHWA was within their rights to withhold the money, effectively striking Cleveland's local hiring law. To read the decision of the Court of Appeals, click here.

Sunday, November 15, 2009

Will U.S. Dept. of Labor Modify Small Business Set-Aside and Project Labor Agreement Requirements on NH Project?

Observers are closely watching what the U.S. Department of Labor will do next after recently canceling a $35 million Job Corps Center project in Manchester, New Hampshire - a project that has been in the planning stages for almost a decade.

Many believe the project was canceled due to a bid protest filed by non-union contractor, North Branch Construction, who objected to the requirement that the successful contractor sign a "Project Labor Agreement" (PLA) on the project and have performed on at least three other projects with project labor agreements.

PLAs require the use of union labor on public works projects. Under an Executive Order by President Obama earlier this year, PLAs were encouraged on federal construction projects, a reversal of an eight year prohibition on PLAs by former President George W. Bush.

The New Hampshire Job Corps Center also had a small business set-aside, meaning only contractors with less than $33.5 million in annual revenue would qualify.

The combination of the PLA and small business requirements would have the effect of severely limiting the bidding pool to small union contractors, mostly from out-of-state who have done previous PLA work and who could submit a payment and performance bond for the full $35 million project - somewhat problematic given the revenue restrictions for qualifying as a small business.

Given the size of the project and its location in primarily non-union New Hampshire, the Department of Labor's requirements don't appear to be appropriately guaged to the project, and may be more of a response to political pressures than to effective bidding strategies.

Stay tuned as the Department of Labor decides whether to open up the project for bidding again and whether they will keep the small business set-aside and the PLA requirements.

For an updated article from the New Hampshire Concord-Monitor, click here.

CMAA - Upcoming Design-Build Projects in Southern California

Breakfast meeting:
When: Wednesday, December 2, 2009

Time: 8:00 a.m. to 10:00 a.m.

Where: Downtown Los Angeles Marriott (333 S. Figueroa St, Los Angeles)

For more information and to register, visit

Sponsored by: Southern California Chapter of CMAA (Construction Management Association of America)

Thursday, November 12, 2009

CMAA Speech on Washington State's SR 520 Bridge Replacement Project

Dinner Speech: SR 520 Bridge Replacement Program

When: Thursday, November 19, 2009

Time: 5:30 p.m. to 8:00 p.m.

Speaker: Larry Kyle, Program Engineering Manager, HDR Engineering

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

Where: Rock Salt Streak House (1232 Westlake Ave. North, Seattle, WA)

Cost: $40

For more information and to register, contact Allen Wycoff at

Description: The SR 520 Bridge Replacement and HOV Program will replace the aging floating bridge built in the 1960s without the benefit of today's design standards. The 12.8 mile program area will affect the 115,000 vehicles that travel the Evergreen Point Bridge every day. The project timeline is to begin in 2009 with innovative pontoon construction testing effort and the new bridge to be open to drivers in 2014. The project costs are estimated between $4.5 to $6.6 billion, depending on the option selected.

Wednesday, November 11, 2009

ARRA and Prevailing Wages on Weatherization Projects

The Washington State Department of Labor and Industries has published guidance for public agencies in the state on the applicability of state and federal prevailing wages on ARRA (American Recovery and Reinvestment Act) weatherization projects.

L&I has established a website specifically dedicated to answering questions related to this. Visit L&I's website for ARRA Public Works Weatherization Projects for more information.

Tuesday, November 10, 2009

Prevailing Wage Correction for Line Equipment Operators

The prevailing wage rate for Line Equipment Operators in all counties in the State of Washington will decrease by one cent effective on November 29, 2009.

This is a correction to the September 2, 2009 prevailing wage rates published by the
State Department of Labor and Industries.

The official notice of the correction from L&I may be found on
L&I's website by clicking here.

AACE & CMAA Meeting on Sound Transit's Beacon Hill Tunnel & Station

Networking, Dinner Meeting, and Presentation:
  • Sound Transit Beacon Hill Tunnel & Station...a Post Mortem
When: Thursday, November 12, 2009 Time: 5:30 p.m. to 8:30 p.m.

Doubletree Guest Suites (16500 Southcenter Parkway, Tukwila, WA)

Speaker: Richard Sage,
Sound Transit Construction Manager Sponsored by: For more information and to register, visit AACE's website.

Monday, November 9, 2009

Protecting Drawings of Secure and Sensitive Facilities

As part of the normal public bidding process, public agencies regularly advertise and often place bidding documents (plans and specifications) online, either on their own websites or on the websites of companies focused on making bidding documents available to the contracting community electronically.

However, agencies should think through the advisability of making some bidding documents, especially plans, available online. It may not be appropriate to put drawings of some facilities online. For example, if the facility to be renovated or built is a secure or critical function facility, or if the disclosure of the detailed drawings could be used inappropriately by some parties to compromise the agency's operations or the public's health and safety, the agency may want to consider alternative methods of advertising and disclosure.

Strategic issues that should be addressed by the public agency include the following:
  • Public Disclosure: Are the documents exempt from public disclosure laws because of the sensitive nature of the material?

  • Distribution of Bidding Documents: How should the bidding documents be distributed to bidders? Should only hard copies be distributed? Should the bidders be required to sign a non-disclosure statement and be required to return the bidding documents after bidding? Should the statement prohibit the bidder from copying the documents and providing them to others?

  • Regulatory Requirements: Are there regulatory requirements that may prohibit the disclosure of certain sensitive information to the general public?
If you agency has facilities for which disclosure of detailed drawings and other information about facilities may compromise the agency's operations or the public's health and safety, it may be advisable to develop a policy and practices around how such documents will and will not be distributed to others outside of your agency.

Sunday, November 8, 2009

Private Construction Activity Down More than 20%

The Associated General Contractors of America (AGC) issued a news release on November 2, 2009 reporting on the continuing decline of private construction spending over the last year.

According to the AGC, "the construction industry continues to suffer from significant delines in privately-funded construction investments, with new federal figures showing private construction investments declined by 20.6 percent between September 2008 and September 2009. The new Census Bureau figures show there's no sign of an economic recovery yet for the nation's construction industry."

The AGC also reported that publicly funded construction increased by 6.1 percent over the last year.

To read the full AGC news release, click here.

Canceled: $35 Million New Hampshire Project with Project Labor Agreement (PLA)

The U.S. Department of Labor last week abruptly canceled the bid solicitation for a $35 million Job Corps Center that was to have been built in Manchester, New Hampshire. The project had a requirement that the successful bidder would be required to sign a Project Labor Agreement (PLA), essentially guaranteeing that only union labor would be used on the project.

North Branch Construction
, a non-union contractor had filed a bid protest on the project with the federal General Accountability Office (GAO). The Associated Builders and Contractors (ABC), an association on non-union contractors, was supporting North Branch in the bid protest. Visit ABC's website to read their news release on the cancellation of the bid solicitation.

I previously reported on the bid protest in earlier blog entries. Click on the date below to read these entries that provide more background information.
  • October 12, 2009 - Non-Union Contractor Challenges Federal "Project Labor Agreement" Requirement
  • November 1, 2009 - A Non-Union Contractor Comments on Project Labor Agreements
To read a copy of the entire 64 page bid protest of North Branch Construction, click here.

The New Hampshire UnionLeader newspaper has an article providing more details on the cancellation of the bid solicitation.

Thursday, November 5, 2009

AIA Issues New 3-Party Contract for Integrated Project Delivery

The American Association of Architects (AIA) released on November 3, 2009 a new Integrated Project Delivery (IPD) contract between the owner, contractor, and designer.

C191-2009, Standard Form Multi-Party Agreement for Integrated Project Delivery, "provides the framework for a collaborative environment in which the parties operate in furtherance of cost and performance goals that they parties jointly establish." The Agreement also addresses incentives, project management, and conflict resolution processes.

Most state and local laws do not permit the use of an IPD model for public contracts, and thus, at least for the time being, the AIA contract is likely to find its use primarily in private contracting. As a concept, however, IPD will be discussed more and more in the public sector.

AIA also offers a variety of other standardized design and construction contracts. Besides AIA, the other leading industry source for standardized design and construction documents is ConsensusDOCS.

Free Training on Emergency Contracting

The Municipal Research and Services Center (MRSC) and the Washington State Chapter of the American Public Works Association (APWA) have announced free training on emergency contracting at the following locations:
  • Yakima (November 24, 2009)
  • Renton (December 1, 2009)
  • Camas (December 9, 2009)
  • Everett (December 17, 2009)
For more information and to register online, visit the website of the Contract Administration Subcommittee of APWA.

Wednesday, November 4, 2009

Audit Finding: Failure to Confirm Federal Debarment and Suspension

One of the most common audit findings from the Washington State Auditor's Office (and probably from the auditors in other states) involves a public agency that receives federal funding, but fails to verify that the selected contractor, consultant, or vendor has not been debarred or suspended from doing business on federally funded projects.

The Washington State Auditor's Office recently found that the City of South Bend (WA) failed to check on the debarment status of vendors on $756,375 in federal disaster funds received. The City's project manager checked the
State Department of Labor and Industries' debarment list, believing that it was the only action required.

The City should have also checked the federal database, Excluded Parties List System (EPLS), found at

To read the complete audit finding,
click here.

If you receive any federal funds, make sure that you check the debarment status of all contractors, consultants, and vendors on EPLS.