Sunday, May 31, 2009

Obama Signs Defense Procurement Overhaul Bill

On Friday, May 22, 2009, President Obama signed the Weapon Systems Acquisition Reform Act of 2009 that will increase competition through reduction of "no bid" contracts and provide tools to prevent cost overruns.

In an unusual display of bipartisanship, the bill passed both the House and Senate unanimously.

President Obama stated that "The purpose of this law will be to limit cost overruns before they spiral out of control. It will strengthen oversight and accountability by appointing officials who will be charged with closely monitoring the weapons systems we're purchasing to ensure that costs are controlled. If the cost of certain defense projects continue to grow year after year, those projects will be closely reviewed, and if they don't provide the value we need, they will be terminated. This law will also enhance competition and end conflicts of interest in the weapons acquisition process so that American taxpayers and the American military can get the best weapons at the lowest cost."

For the complete text of the President's comment's visit the White House website.

Visit The Seattle Times website to read their story on the new law.

To view the complete legislation as passed by the House and Senate and signed by the President, click here.

San Diego Contracting Chief Under Investigation

San Diego has hired a private firm to investigate the city's contracting chief, Hildred Pepper, Jr. who joined the city in March 2008 after serving as head of contracting for the Detroit school system from 2001 to 2007.

At issue are critical audits of Pepper's performance in Detroit and some questionable transactions he may have authorized. The FBI is also conducting an investigation.

For more details click on this link to

Other documents and stories may be found by clicking here.

Public officials, especially elected officials and those responsible for procurement and contracting, must be totally transparent when it comes to ethical issues. While in one sense, this is obvious, it's clear from the repeated ethical lapses we all read about, that additional discussion and training is necessary when it comes to ethics in public contracting.

That's why I've created a training class on the subject: Ethics in Public Contracting: Integrity, Transparency, and Appearances. If you're interested in learning more about this training class, please contact me.

More Job Opportunities Links

Here are a couple more job opportunity links:
Let me know if there are others you'd like to see me add to or mention on this blog.

Wednesday, May 27, 2009

Options for Pricing Preconstruction Services on GC/CM Projects

One of the key advantages of using the General Contractor/Construction Manager (GC/CM) method of project delivery on public works projects is having the contractor on board early in the project - usually no later than the end of the schematic design phase. The contractor, or GC/CM, then works with the public agency throughout the design and construction documents providing various Preconstruction Services such as cost estimating services, constructability reviews, and scheduling assistance.

Different states have different laws governing this type of contracting procedure. Under Washington State law, it is interesting that Preconstruction Services are hardly mentioned at all, thus leaving public agencies with different options to pursue in terms of how to price Preconstruction Services.

In RCW 39.10.210 (9), the maximum allowable construction cost (MACC) is defined as "the maximum cost of the work to construct the project including a percentage for risk contingency, negotiated support services, and approved change orders." Note that Preconstruction Services are not part of the MACC. Neither are they part of the Total Contract Cost that includes the cost of "the detailed specified general conditions work, the negotiated maximum allowable construction cost, and the percent fee on the negotiated maximum allowable construction cost."

The only other reference I am aware of in chapter 39.10 RCW about Preconstruction Services is a reference to the requirement in RCW 39.10.360 that the Request for Proposals include a copy of any Preconstruction Services Contract.

So how should public agencies obtain prices for Preconstruction Services? There are two basic methods used:
  1. Bidding Preconstruction Services
  2. Negotiating Preconstruction Services
In order to bid the cost of the Preconstruction Services, it is important to have a very clearly defined and comprehensive scope of work for Preconstruction Services. Without such a clear scope, contractors will be bidding based on differing assumptions, and the owner may be faced with change orders for items not clearly in the scope. It seems to me that one of the big benefits of having a GC/CM is the services they provide to the owner during preconstruction. Subjecting the pricing for this to bidding where contractors will be tempted to submit a low bid just to be selected as the GC/CM may not get the public agency the full range of Preconstruction Services needed to make for a successful project.

While I am normally a strong proponent of competitive bidding, in this instance, it seems to me more beneficial to negotiate a not-to-exceed amount for Preconstruction Services based on a mutually agreed upon work plan proposed by the contractor and reviewed by the public agency. The GC/CM is selected by the public agency to be a partner in constructing the project, and having the parties come to acceptable terms at the beginning on Preconstruction Services seems like a great way to start the partnership. The owner has the ability to ensure that the work plan proposed is sufficient to meet its needs and that the pricing and proposed hours and rates from the contractor are appropriate. Payment should be made to the contractor based on documented time and expense records. The contractor should be at risk for going over the agreed upon amount except in instances where the owner has added Preconstruction Services desired that were not part of the negotiated work plan. The work plan should be included and attached to the contract for Preconstruction Services.

Bottom Line: Negotiating the cost of the Preconstruction Services will probably be most beneficial to the public agency. But be sure to have a clearly agreed upon scope of work, and evaluate critically the contractor's proposed tasks, hours, and hourly rates.

Kennewick Hospital Seeks GC/CM Project Approval

Kennewick General Hospital has submitted an application to the State's Project Review Committee (PRC) for approval to utilize the General Contractor/Construction Manager (GC/CM) alternative public works contracting process for a $63 million construction project. The project involves building a partial hospital building replacement. Kennewick General Hospital is a public agency, formally known as the Kennewick Public Hospital District No. 1.

The PRC, a body appointed by the Washington State Capital Project Advisory Review Board (CPARB), will consider the Hospital's application at its May 28, 2009 meeting.
GC/CM contracting is authorized under chapter 39.10 RCW.

Please contact me if your agency needs assistance with the GC/CM approval, solicitation, selection, and contracting processes. I am currently under contract with LOTT Alliance, a consortium of wastewater treatment utility districts in the Olympia area as they embark on a GC/CM project for upgrades to their treatment plant, and am assisting LOTT Alliance with the solicitation, selection, and contracting process.

Tuesday, May 26, 2009

Teleconference Training Opportunities

With the high price of gas and with travel budgets reduced for many public agencies, training via the web and telephone can be attractive options.

I've listed below some upcoming training opportunities offered by Lorman Education Services. Each session is 1.5 hours long and are normally from 10:00 a.m. to 11:30 a.m. (Pacific Time).

Monday, May 25, 2009

Webinar: Understanding Procurement Methods and Contract Types

Webinar: Understanding Procurement Methods and Contract Types

When: May 29, 2009 (10:30 a.m. Pacific Time)

How Long: 2 hours

Sponsored by The Urban Land Institute

For more information and to register, visit The Urban Land Institute's professional development website.

Description: Design and construction are usually the riskiest and most time-consuming parts of the development process. When and how you introduce a contractor into your process can significantly affect your management of this risk. There is more than one way to navigate this process; each path is linked with an appropriate contract type. Construction typically entails three principal types of contracts: lump sum, cost plus and guaranteed maximum price. The inherent structure and implicit timing of each contract type allocates risk differently and can affect delivery schedules. This 2-hour program will succinctly explain the relative merits and weaknesses of each procurement and contract type.

Vendor Education Seminar in Spokane

The Washington State Department of General Administration will be hosting its Eastside Vendor Education Seminar in Spokane on June 4, 2009 at the Mirabeau Park Hotel. The event will start at 8:00 a.m. and end at 3:30 p.m.

Online registration ends on Tuesday, May 26, 2009 at 5:00 p.m.

The seminar is intended to provide help for businesses interested in bidding on government contracting opportunities. Senior staff from a variety of state agencies will be present to discuss and seek feedback on state rules and services. A new focus of the seminar this year will be on the state's efforts to make it easier for companies to do business in the Washington.

There will be a variety of individual workshops on topics such as:
  • Electronic Opportunities
  • How architects, engineers, and contractors get business with the state
  • Responding to the Bid
  • Hired hand or independent contractor
  • Surviving in Tough Times
  • Doing Business with WSDOT
For the complete agenda, more information, and to register, click here.

Thursday, May 21, 2009

Memorial Day Weekend

Best wishes to all as you enjoy a long Memorial Day weekend!

In the midst of get togethers with family and friends, let's remember those men and women throughout our nation's history who have died while serving in the military - all to protect our freedoms.

Prevailing Wages and Stimulus Work

For a helpful discussion of the pros and cons of requiring prevailing wages be paid on federal stimulus work, visit The Washington Independent's website.

Wednesday, May 20, 2009

Port of Tacoma Lays Off 5 Contract Administrators

The Port of Tacoma is the latest victim of the difficult economic times.

On Monday, May 18, 2009, the Port notified five contract administrators that they will loose their jobs effective July 30, 2009. The five positions are part of a total of 47 positions the Port is eliminating and represents 18 percent of the Port's workforce.

Visit the website of the
Tacoma News Tribune for more information.

If your agency has any contract administrator vacancies you're trying to fill, keep these experienced personnel in mind as you go through the hiring process. I can pass your job opening onto the affected Port of Tacoma staff.

W.A. Botting Files for Bankruptcy

W.A. Botting, a well-known 98 year-old mechanical contractor in the Seattle area, filed for bankruptcy on Tuesday. Visit the Seattle Times for more details.

Annual NIGP Conference in St. Louis

The 64th Annual Forum and Products Exposition of the National Institute of Governmental Purchasing (NIGP) will be held from August 22 through 26, 2009 in St. Louis, Missouri.

For more information and to register for this Gateway to Procurement Excellence event, visit NIGP's website.

Tuesday, May 19, 2009

Housing Authorities Subject to Law on Alternative Public Works Contracting

The Attorney General's Office for the State of Washington has issued an opinion that housing authorities are a "public body" under chapter 39.10 RCW and therefore subject to all of the requirements related to alternative public works contracting procedures (design-build, general contractor/construction manager, and job order contracting).

Housing authorities in the State of Washington have long argued that they are not subject to various state laws "unless the legislature shall specifically so state." (RCW 35.82.070). However, this provision only applies to other laws "with respect to the acquisition, operation or disposition of property."

Attorney General Opinion 2009 No. 2, issued on April 24, 2009, stated that chapter 39.10 RCW (alternative public works) is "not a statute relating to the acquisition, operation, or disposition of property, and therefore, RCW 35.82.070(10) does not exempt public housing from the provisions of RCW 39.10."

Over a number of years, housing authorities have contracted with general contractors/construction managers (GC/CMs) without following the specific requirements of chapter 39.10 RCW. This Attorney General Opinion will likely require housing authorities to change their practices, including obtaining the approval of the Project Review Committee prior to utilizing GC/CM for a project.

Monday, May 18, 2009

Auditor Cites School District for Conflict of Interest

The Washington State Auditor's Office issued a finding that a board member of the Battleground School District created a prohibited conflict of interest.

The situation arose when the board member voted to award four public works projects that included a roofing company as a subcontractor. He was an officer of the roofing subcontractor and his salary included a profit sharing component. The board member and his roofing company stood to gain financially from his action as a board member.
The board member should have disclosed his financial interest in the subcontracting company in a public meeting and not voted on the contract awards.

For more information, read the three page audit report by
clicking here.

Sunday, May 17, 2009

An Apology to Project Managers...

Words are important, and how we use them is important. Last week I posted an entry on this blog about the built-in tension between the contracting/purchasing function and project management. Unfortunately, I was not very careful in my choice of words in describing project managers. My apologies to project managers out there.

I implied that project managers want to cut corners on compliance and don't care about the appropriateness of cost proposals as long as money is in the budget. I don't really think that. Project management of public works projects is a very difficult and challenging task, and project managers have a lot of conflicting agendas to balance.

I think that project managers, out of necessity in balancing the conflicting needs of a project, are called upon to perform a risk analysis on many issues, and make the best decision possible. Sometimes, it is important to make a decision that may lead to less than a perfect contract. But clearly, the purpose of project managers is not to figure out how they can avoid requirements. It is to balance conflicting needs and to work with all affected parties.

Project managers are charged with staying within budget and on schedule, difficult challenges when the landscape of a project keeps changing. Project managers do look for ways in which to protect the public's wallet in their negotiating consultant contracts and construction change orders.

When it comes to the tension between contracting and project management, I think the important thing to remember is that both are critical functions in the development and construction of a capital project. It is important that both work together in solving problems for the public they both serve. The contracting function can offer strategic advice and serve as a valuable resource and partner for project managers in getting work accomplished in a timely and compliant manner. The contracting function can also offer critical negotiation assistance to project managers in evaluating cost proposals.

By working together as a team, contracting and project managers can help balance out each other, contribute their various strengths and expertise, focus on their common objectives, and ensure that the public's interests are protected.

Does the tension between project management and contracting have to exist? Not necessarily. By being deliberate about communicating their objectives and talking with one another frequently and before issues become bigger problems, they can effectively serve the public without a tense environment.

Once again, my apologies to project managers for my comments that I didn't take sufficient time to reflect on before I hit the "post" button. I would be interested in comments from any of you involved in either contracting or project management, and your observations. You can comment on this post or send me an e-mail. From your perspective, what things can either contracting personnel or project managers do differently to improve the collaboration between the two?

Thursday, May 14, 2009

Tensions Between Contracting and Project Management Personnel

There is a natural and built-in tension that often exists in government agencies between those responsible for contracting/purchasing functions and those involved in project management.

Generally, the contracting/purchasing function is most concerned about things such as:
  • Fair and legal selection processes
  • Negotiations that protect the agency
  • Compliance with regulations
  • Accurate contracts that protect the agency
  • Obtaining best value for the agency
On the other hand, those involved in project management care most about:
  • Speed
  • Efficiency
  • Cutting corners on compliance
  • Getting the project built
  • Accepting a vendor's or consultant's proposal if there is money in the budget
What are some effective strategies for contracting/purchasing personnel to deal with this tension? Let me offer four suggestions:
  1. Roles. Clarify the roles and responsibilities of your contracting/purchasing function versus that of other groups in your agency.

  2. Information. Provide full information about the risks and compliance issues involved to the appropriate decision makers.

  3. Decisions. If it's outside your official role and you're uncomfortable with what others want to do, let the appropriate party make the decision. Don't feel that you have to control the situation.

  4. Documentation. Maintain documentation of who made key decisions and the input that you provided.

Wednesday, May 13, 2009

Training: Public Works Construction

Public Works Construction

When: July 15, 2009 (8:30 a.m. to 4:30 p.m.)

Where: The Westin Hotel, Seattle, Washington

Sponsored by: Lorman Education Services

Cost: $369

  • Insurance coverage issues in public works construction
  • Public bidding procedures and bid contests
  • Public works bonding in Washington State
  • Current developments in public contracting
  • Changes, claims, and common issues in public contracting disputes
For more information and to register, click here.

Tuesday, May 12, 2009

Selecting Qualified Contractors on Public Works Projects

Legislation adopted by the Washington State Legislature in 2007 established a framework for public agencies to develop supplemental bidder responsibility criteria that are relevant to a particular public works project, and that may be used in determining whether a bidder is responsible and capable of performing the project.

Some public agencies have been using the criteria to unduly restrict the pool of available bidders and, in some cases, to specifically exclude particular contractors from being able to bid who may be otherwise qualified.
While the supplemental bidder responsibility law (RCW 39.04.350) provides a good tool for public agencies, it needs to be used appropriately.

To the extent that a public agency is not satisfied with the ongoing performance of a particular bidder, the appropriate mechanism to exclude that bidder from being awarded future projects is through a contractor performance evaluation program that provides the opportunity for the contractor to appeal negative evaluations.

Using supplemental bidder responsibility criteria to exclude a particular contractor from bidding was never the intent of the legislation. The intent of establishing such criteria has always been to ensure that the bidder selected met certain minimum thresholds that would indicate an ability to perform the project. Supplemental bidder responsibility criteria were not intended to describe the ideal contractor for a project.

Monday, May 11, 2009

Prison Term for Abuse of Government Credit Card

On May 8, 2009, a former assistant fire chief of a public fire district in the Seattle area was sentenced to three years in prison and ordered to pay almost $1 million in restitution to the South King County Fire & Rescue District.

Grant Gaspard used purchase orders and a district credit card to pay for hundreds of thousands of dollars of personal charges. He stole more than $775,000 from the district over a six year period. He also submitted a falsified invoice and received a $98,000 check at his home.

Gaspard resigned his position in July 2009 after more than 27 years with the fire district. The South King County Fire & Rescue is a public fire protection district governed by the provisions of Title 52 RCW.

A fundamental principle of government contracting is that there must be checks and balances and a separation of duties to prevent fraud and abuse. In addition, public agencies that issue government credit cards to their employees as a method of streamlined procurement must have clear procedures, expectations, and monitoring systems in place to prevent misuse of the credit cards.

Visit the Seattle Times to read more.

Sunday, May 10, 2009

Training on 2009 Legislative Updates in Washington State

Mark your calendar now for attending one of three training sessions on 2009 legislative updates affecting public contracting in the State of Washington. I will be one of the presenters.

Sponsored by: APWA's Contract Administration Subcommittee and the Municipal Research and Services Center

When and Where:
  • June 10th - Renton
  • June 17th - Camas
  • June 18th - Everett
Time: 10:00 a.m. to 2:30 p.m.

To register, check APWA's website regularly within the next few weeks until the registration information is posted.

Conference: Lean Design in the Northwest

1 Day Conference on:
  • Lean Design in the Northwest: How best practices in design can reduce construction costs
When: May 15, 2009 (7:00 a.m. to 5:00 p.m.)

Where: Cedarbrook Conference Center (18525 36th Avenue South, SeaTac, Washington)

For more information and to register, visit:

Sponsored by: Cascadia Chapter of Lean Construction Institute

  • $100 (academic/government)
  • $150 (member of Lean Construction Institute)
  • $200 (non-member of Lean Construction Institute)
  • Kit Burns, Associate Principal, BLRB Architects
  • Brian Kite, Sr. Project Manager, MacDonald Miller
  • Mike Sweeney, Process Improvement Manager, Turner Construction
  • Brian Blevins, Survey Project Consultant, CH2M Hill
  • Tom Owens, General Counsel, NBBJ

Thursday, May 7, 2009

Training in Spokane on May 7th

Here's a picture of me in Spokane at the annual convention of the Washington Association of School Business Officials (WASBO), where today I conducted two training workshops, one on Ethics in Public Contracting and the other on Public Works Contract Close-out. This is a picture in the exhibition hall of the Spokane Convention Center where Michael E. Purdy Associates had a table.

Wednesday, May 6, 2009

Blogs on Government Contracting

The George Washington University Law School (Washington, DC) has a web page that lists a number of blogs on government contracting, including Mike Purdy's Public Contracting Blog.

Tuesday, May 5, 2009

Job Opening: Contracting Program Manager

The State of Washington, Department of Printing, is advertising for a Contracting Program Manager. They posted the recruitment on April 27, 2009 and it is open until further notice.

The position provides professional level acquisition and contracting expertise.

Salary: $4,542 to $5,958 DOE

Click here to read the full job announcement.

Monday, May 4, 2009

Maintenance and Public Works

One of the most confusing issues that many public agencies deal with is whether maintenance is considered a public work or not. Is it subject to prevailing wages?

This free class, sponsored by
APWA and MRSC will address these and other questions and will undoubtedly result in some lively discussion. When and Where:
  • May 13 2009, Camas, Washington (10:00 a.m. to 2:30 p.m.)
  • May 28, 2009 Everett, Washington (10:00 a.m. to 2:30 p.m.)
For more information and to register, visit APWA's training website.

Sunday, May 3, 2009

Job Opening: Sound Transit Seeks Senior Contracts Administrator

Sound Transit is recruiting for a Senior Contracts Administrator (Construction) to be responsible for the procurement, administration, and close-out of various complex architectural/engineering and construction contracts for significant capital construction projects.

Closing Date: May 15, 2009

For a more complete description and instruction about applying, visit Sound Transit's employment website.

Problems with Chinese Drywall

Recent news accounts have reported on the problems being caused by drywall manufactured in China that has wrecked havoc with electrical systems and may pose health risks as well. The Wolfe Law Group has begun a Chinese Drywall Blog to track the issues.