Tools for Selecting Qualified Contractors

Under the traditional Design-Bid-Build project delivery system, public agencies often complain about the requirement to accept the low bid, and low bid jokes abound in our society.

But surprisingly, not all projects are Design-Bid-Build and there are a variety of tools available for certain public agencies, even within Design-Bid-Build, that permit selection of contractors or subcontractors based, at least partially upon their qualifications.

Here's a list of some of these tools:

• Supplemental Bidder Responsibility Criteria: Under Design-Bid-Build, a public agency may establish Supplemental Bidder Responsibility Criteria to help ensure that the low bidder is capable of performing the work. This tool is not intended to unduly limit the bidding pool or to establish a "most qualified" standard, but to define a capability or responsibility standard. Supplemental Bidder Responsibility Criteria is authorized in RCW 39.04.350. The determination of responsibility is made prior to award.
  

• Qualification Requirements: Under Design-Bid-Build, a public agency may include in the technical specifications qualification requirements for certain subcontractors. Unlike supplemental bidder responsibility criteria that are enforced prior to award of a contract, these qualification requirements are enforced prior to performance of the work.
  

• Small Works Roster Qualifications: Under a Small Works Roster, a public agency may establish certain qualification requirements prior to placing contractors on the Roster to ensure that the contractors are responsible and capable of performing the specific work contemplated under the Small Works Roster. RCW 39.04.155 (2)(a) states that "the small works roster or rosters shall consist of all responsible contractors who have requested to be on the list...A state agency or local government establishing a small works roster or rosters may require eligible contractors desiring to be placed on a roster...to keep current records of any applicable licenses, certifications, registrations, bonding, insurance, or other appropriate matters on file...as a condition of being placed on a roster or rosters." And, of course, a public agency may establish Supplemental Bidder Responsibility Criteria for a Small Works Roster project as well.
  

• Job Order Contracting: Under Job Order Contracting, the contractor is selected based on a combination of qualifications and experience through a Request for Qualifications process, as well as their price for managing this indefinite quantity indefinite delivery contract in which they must subcontract out 90% of the work to subcontractors. Their price is bid as a "coefficient" or mark-up or mark-down of an established unit price book, such as R.S. Means. Job Order Contracting is authorized by chapter 39.10 RCW.
  

• General Contractor/Construction Manager (GC/CM): GC/CMs are also selected based partially on qualifications and partially on their price for certain elements of work. Typically, the price is a lower percentage of points in the selection process. The price they bid is only for their Percent Fee (overhead and profit) and Fixed Amount for Specified General Conditions work. The bulk of the construction cost, the Maximum Allowable Construction Cost (MACC) is actually negotiated between the public owner and the GC/CM. GC/CM is authorized by chapter 39.10 RCW.
  

• Subcontractor Eligibility on GC/CM: Under RCW 39.10.400, a public agency and GC/CM have the ability to essentially pre-qualify certain subcontractors prior to the GC/CM issuing the subcontract bid packages for public bidding. There is a process outlined in the law for holding a public hearing about the proposed criteria for subcontractor eligibility and also an appeal process for a subcontractor found not to meet the eligibility criteria.
  

• Design-Build: This is one of three alternative public works contracting methods authorized in the State of Washington, but it is used much less frequently than GC/CM and Job Order Contracting. A Design-Builder is selected based on qualifications, proposal, and price. Design-Build is also authorized under chapter 39.10 RCW.
  

• Pre-Qualification: Most observers will note that the Legislature, by specifically mentioning only certain agencies to pre-qualify contractors, has restricted pre-qualification to only those agencies. The Washington State Department of Transportation (WSDOT) has authority to pre-qualify its contractors under RCW 47.28.070. Cities and towns owning an electrical utility are required to pre-qualify contractors for electrical work as authorized by RCW 35.92.350. Public Utility Districts also have a similar requirement related to electrical work, as authorized in RCW 54.04.085. In pre-qualification, a public agency makes a determination ahead of time as to who is qualified to even bid the project.