Small Business Preference Legislation

HB 1830 would establish definitions for three different types of small businesses and then permit public agencies using the Limited Public Works process (less than $35,000) under the Small Works Roster law (RCW 39.04.155) to "solicit and award small works roster contracts to small businesses, minibusinesses, and microbusinesses."

The legislation would amend what was passed in 2007 permitting agencies to solicit and award these contracts to "registered contractors with gross revenues under one million dollars annually as reported on their federal tax return."

In its place would be three new categories of businesses: small, mini, and micro that each have definitions under the bill. For each of the three types of businesses, they must be a "business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independent from all other businesses."

They differ based on the annual gross revenues permitted, all as reported on the federal tax return or Department of Revenue return of the business.

• A microbusiness would have gross revenue of less than $1 million annually.
• A minibusiness would have gross revenue of less than $3 million but more than $1 million annually.
• A small business would have gross revenue of less than $7 million annually.

The bill also would add these three business type definitions to RCW 39.29.006, the definitions section of the Personal Services Contracts section of the law that is applicable to state agencies. But there are no provisions in the bill for applying these definitions in the application of Personal Services Contracts.

For public agencies with bid limits of less than $35,000 (the amount for using the Limited Public Works process and therefore applying these proposed definitions), the bill may have limited value as most of the public work under $35,000 may be performed with in house forces or not through the Limited Public Works process.