Subcontractors List Legislation Moving Ahead

Substitute SB 5969 was approved on February 25, 2009 by the Senate Committee on Government Operations & Elections. The substitute bill represents a significant improvement from the unworkable SB 5969 (and HB 1837) that was originally introduced. Public agencies should be able to support the substitute bill.

Substitute SB 5969 would amend RCW 39.30.060 that requires public agencies to include in public works bidding documents estimated to cost $1 million or more a requirement that the bidders list the electrical, plumbing, and HVAC subcontractors, or to list themselves if they are performing the work. The statute is specifically written as an anti-bid shopping law.

Here is a summary of the changes that the Substitute SB 5969 would make, most of which relate to the relationship between the contrator and a substituted subcontractor (one who is named on the bid form but subsequently not used):

• Would eliminate the standard that substitution "in furtherance of bid shopping or bid peddling" is prohibited. The reason for deleting the language "in furtherance of bid shopping or bid peddling" goes back to a recent case in which the substituted subcontractor was not able to prove that the substitution was "in furtherance of bid shopping or bid peddling" - a very difficult standard to meet. Thus, the proposed bill would simply state that substitution, except for the reasons noted in the bill, is prohibited.
  

• Would add three new reasons for substituting a subcontractor:
  

• 1.) If the subcontractor failed to meet the subcontractor responsibility criteria of RCW 39.06.020. Actually, the bill incorrectly lists RCW 39.04.350 which is for bidder responsibility, not subcontractor responsibility which is found in RCW 39.06.020. I've been letting key individuals and legislative staff know that this needs to be corrected, and think that this change should get into a new substitute bill.
  

• 2.) "For any other reason that an arbitrator or court determines to be good cause for substitution such as, but not limited to, clerical errors or misinterpretation of the scope of the project."
  

• 3.) For a subcontractor being found in violation of prevailing wage laws in accordance with RCW 39.12.065 (3).
  

• Would add language entitling the prevailing party in a dispute between a contractor and substituted subcontractor to recover damages from the other party. The bill also provides that disputes under this law may be resolved through binding arbitration or in superior court in the county where the public work is located.

• There are also a number of stylistic and editorial changes in the bill.