Bill to Expand Subcontractors List

HB 1837, currently under consideration by the Washington State Legislature, would add additional provisions to the requirement for bidders to include a subcontractors list with their bid on public works projects by amending RCW 39.30.060.

In my opinion, the bill is poorly drafted, ambiguous, and represents poor public policy. It would result in more non-responsive bids and protests on public works projects, resulting in delays and additional costs for public agencies. Especially in these difficult economic times, now is not the time to add more government regulations, especially of the type contemplated. Because the language of the bill is so unclear at some points, it is difficult to fully assess the impact of it on both contractors, subcontractors, and public agencies.

Here is a quick summary of the bill which may be accessed by clicking here:

1) In lieu of only three trades required to be listed on the subcontractors list as is the current law (HVAC, electrical, and plumbing), the bill would require that:

a) All first tier subcontractors who will perform work valued at $50,000 or more be listed.

b) All subcontractors who will perform work valued at $350,000 or more be listed. Presumably, this refers to lower tier subcontractors, but this contradicts section (7) of the legislation that restricts the application of the law to only subcontractors who will contract directly with the prime bidder.

c) "The prime contract bidder must list all subcontract work that it will perform." (Section 2 (1)). This doesn't make a lot of sense. If the prime contract bidder performs work, it is not, by definition, subcontract work.

2) Section (3) is very difficult to understand. Whatever the language is intended to accomplish, it is hard to comment on it here and it would be difficult to implement as a result. It appears to imply that the public agency should be opening subcontract bids in addition to the prime contractor's bids - something that would create havoc in the contracting community for both contractors, subcontractors, and public agencies, and bring work to a standstill. Here's what the bill states: "The public entity shall open all bids submitted by prime contract bidders, alternates, and subcontractors that are required to be listed under this section at the end of the published bid submittal time. Bids submitted by prime contract bidders and their subcontractors may not be opened separately."

3) The bill adds to the list of reasons why a prime contract bidder may not use a listed subcontractor. The additions to the list are, by and large, welcome additions, even if they are not clearly worded, and such wording will create ambiguity in implementation. Clearly, there is an intent to permit bidders to disqualify subcontractors who do not meet certain basic criteria.

a) Section 5 (g) lists one reason as "The listed subcontractor fails to meet the requirement established in RCW 39.04.350 for responsible bidders." This should be a reference instead to RCW 39.06.020 which is where subcontractor responsibility is discussed.

b) Section 5 (i) and 5 (l) both include identical language: "The listed subcontractor did not include the entire cost of the subcontract in the bid submittal."

The bill has been referred to the House State Government and Tribal Affairs Committee. At this point, no hearing has been scheduled for it.