If a public agency receives federal funding for any project, one of the requirements is that the agency check to ensures that the selected vendor, contractor, or consultant is not debarred or suspended from doing business with the federal government.It is easy to check the federal debarment status of a company. Visit http://www.epls.gov.
Make sure you print out a copy of the web page showing that the company is not debarred and keep it in your contracting file for when you are audited.The City of Yakima (Washington) was recently audited by the Washington State Auditor's Office who issued a finding for Yakima's failure to check the debarment status of a number of firms. To read the audit finding, click here.Pacific County (Washington) also faced a similar audit finding from the Washington State Auditor's Office. Click here to read the audit.Make sure your agency has a clear procedure for ensuring that the status of vendors, contractors, and consultants on federally funded projects is checked before entering into a contract with them.
Training: The Fundamentals of Construction Contracts: Understanding the Issues
When: December 11, 2009 Where: Spokane, Washington
Cost: $359 For more information and to register, click here. Sponsored by: Lorman Education Services
Faculty: - James Majeskey
- Jason T. Piskel
- Tyan Yahne
Wishing you and your families and wonderful day of Thanksgiving! May it be a time to remember and reflect on the many things we have to be thankful for.On October 3, 1863, in the midst of the Civil War, President Abraham Lincoln issued a Thanksgiving proclamation - the first one in an unbroken string of presidential proclamations to designate the last Thursday in November as a national day of Thanksgiving.The following is the text of Lincoln's 1863 Thanksgiving proclamation:BY THE PRESIDENT OF THE UNITED STATES OF AMERICA – A PROCLAMATIONThe year that is drawing toward its close has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added which are of so extraordinary a nature that they can not fail to penetrate and soften even the heart which is habitually insensible to the ever-watchful providence of Almighty God.In the midst of a civil war of unequaled magnitude and severity, which has sometimes seemed to foreign states to invite and to provoke their aggression, peace has been preserved with all nations, order has been maintained, the laws have been respected and obeyed, and harmony has prevailed everywhere, except in the theater of military conflict, while that theater has been greatly contracted by the advancing armies and navies of the Union. Needful diversions of wealth and of strength from the fields of peaceful industry to the national defense have not arrested the plow, the shuttle, or the ship; the ax has enlarged the borders of our settlements, and the mines, as well of iron and coal as of the precious metals, have yielded even more abundantly than heretofore. Population has steadily increased notwithstanding the waste that has been made in the camp, the siege, and the battlefield, and the country, rejoicing in the consciousness of augmented strength and vigor, is permitted to expect continuance of years with large increase of freedom.No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God, who, while dealing with us in anger for our sins, hath nevertheless remembered mercy.It has seemed to me fit and proper that they should be solemnly, reverently, and gratefully acknowledged, as with one heart and one voice, by the whole American people. I do therefore invite my fellow-citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next as a day of thanksgiving and praise to our beneficent Father who dwelleth in the heavens. And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings they do also, with humble penitence for our national perverseness and disobedience, commend to His tender care all those who have become widows, orphans, mourners, or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the interposition of the Almighty hand to heal the wounds of the nation and to restore if, as soon as may be consistent with the divine purpose, to the full enjoyment of peace, harmony, tranquility, and union.In testimony whereof I have hereunto set my hand and caused the seal of the United States to be affixed.Done at the city of Washington, this 3d day of October A.D. 1863, and of the Independence of the United States the eighty-eighth.ABRAHAM LINCOLN
Most federally funded public works projects require the payment of federal prevailing wages and compliance with the Davis-Bacon Act (and related acts). Federal prevailing wage provisions require the public agency to conduct interviews on the construction site with workers to inquire about how much they are being paid, to observe whether they are working within the classification they are being paid for, and to ask whether they are receiving overtime pay, where required.
The public agency then has the obligation to take the information from the employee interviews and compare it with the information reported by the contractor or subcontractor on their weekly certified payrolls. These payroll reports must be submitted to the public agency who is responsible for reviewing the payrolls to determine if the workers were paid appropriately. Discrepancies between the interviews and payrolls should be investigated further by the public agency. A recent audit finding by the Washington State Auditor's Office found that King County failed to check the payroll reports even when employee interviews revealed that four subcontractor employees were potentially underpaid the prevailing wages due to them.
The audit also found that King County "did not have a process to determine whether the state of Washington prevailing wage rates or the federal Davis-Bacon Act wage rates were higher; therefore, the County was not able to ensure the contractor complied with the state law that stipulates the higher of the two wages must be paid to the workers."Click here and go to page 24 of the report to read the finding for this item.
The Washington State Joint Legislative Audit and Review Committee (JLARC) issued a 73 page report in late September 2009 publishing their findings on the accuracy of cost estimates for capital projects for ten state agencies. The study looked at projects over $5 million. The report concluded that "a large majority of capital project cost estimates reviewed meet professional expectations for accuracy," and that the cost estimating practices used by the agencies was consistent with professional standards.
To read the report, click here.
The Washington State Department of General Administration is recruiting for a Contracts Specialist 3 position.The salary range from $4,033 to $5,289 per month.Filing closes on Friday, December 4, 2009For more information and to apply, visit GA's website by clicking here.
Under Washington State's General Contractor/Construction Manager (GC/CM) project delivery method (known in other places as CM at Risk), the public agency initially enters into a pre-construction services contract with the selected contractor. See chapter 39.10 RCW.The scope of work for this pre-construction services agreement typically covers tasks such as cost estimating, constructability reviews, and value engineering. Often, the contractor will be requested to perform limited physical or exploratory work. While a pre-construction services contract is normally viewed as a consultant agreement, to the extent the contractor is performing physical work, that work may be subject to prevailing wage requirements. Thus, it is important for pre-construction services contracts to include language requiring the payment of prevailing wages when applicable. The following prevailing wage language may serve as a guide for public agencies in developing and negotiating a pre-construction services contract as part of a GC/CM project:"To the extent that any of the work in this Pre-construction Services Contract is subject to the payment of prevailing wages, the Contractor shall comply with all applicable provisions of Chapter 39.12 of the Revised Code of Washington concerning prevailing wages, shall provide the Owner with all documents required therein, and shall pay not less than the prevailing rate of wage to such laborers, workers, or mechanics in each trade or occupation required for the work whether performed by the Contractor, subcontractor, or other person doing or contracting to do the whole or any part of the work subject to prevailing wages and contemplate by this Contract. The execution date of this Contract shall be the effective date for any prevailing wages required to be paid under this Contract. In any case, the Contractor shall not pay any person described herein less than the hourly minimum rate of wage."
A copy of the prevailing wages applicable as of the execution date of the pre-construction services contract must also be attached as part of the contract. If the project contains any federal funds, the prevailing wage language will need to be adjusted appropriately.
Breakfast Meeting: In-House Design & Build When: Friday, December 4, 2009 Time: 7:15 a.m. to 9:30 a.m. Where: Rainier Club (820 Fourth Avenue, Seattle, WA)
Cost: $50 (DBIA members); $55 (non-members)
Speakers: - Joe Schneider (owner of JAS Design Build)
- Anthony Maschmedt (founder of Dwell Development)
- Julian Weber (architect of Dwell Development)
- Chris Pardo (partner in PB Elemental Architecture)
For more information and to register, visit DBIA's website.
One of the challenges for public agency contract managers and administrators is to define their role clearly, especially in relationship with others in the agency responsible for delivery of public works projects. The value that the contracting staff add to the process should be clearly articulated for the rest of the agency. The contracting function should be viewed as a strategic partner in helping public agencies develop the most effective, efficient, and legal contracting approaches and methods, which will meet the objectives of the project. Contract administrators also are a critical partner in helping public agencies mitigate against risks in the following areas:- Bid protests
- Schedule delays
- Cost overruns
- Regulatory non-compliance
- Contract disputes
- Audit findings
By framing the role of the contracting department as a strategic partner and risk manager, better working relationships can be developed with those responsible for the delivery of the projects.
With the current economic conditions, many public agencies are seeing an increase in both the number of bidders and bid protests on their projects, as bidders aggressively compete for a shrinking pool of available work.Clark County, Nevada spokesman Dan Kulin noted recently that "In prior years, maybe one bid out of 10 would be challenged; these days it's more like one in four."Some bid protests are legitimate, while others may border on frivolous. Regardless of the reasons, bid protests may negatively impact a project's schedule as the public agency evaluates the protest and responds to the protest by providing a careful process of hearing all the facts before making a decision. If the protestor chooses to take the protest to court through a lawsuit or a request for a temporary restraining order to block the public agency from awarding the project, additional costs and time delays have further impacts on the project.The increase in bid protests is a good reminder for public agencies to be diligent in developing and reviewing public works bidding documents in an attempt to eliminate ambiguities and make the documents clear. To read about various bid protests from around the nation, visit the section of my blog on Bid Protests to read about protests in California, Nevada, Ohio, Indiana, New Hampshire, and the District of Columbia.
Dinner Program: LACMTA - Measure R and the New Transportation Projects in Los Angeles CountyWhen: Thursday, December 3, 2009Time: 5:30 p.m. to 8:30 p.m.Where: Marriott @ LAX (5855 West Century Blvd, Los Angeles)Speaker: Krishniah Murthy, Deputy Chief Management Officer, LACMTA (Los Angeles County Metropolitan Transportation Authority)Sponsored by: Southern California Chapter of Construction Management Association of AmericaCost: $60 for CMAA members, $90 for non-membersFor more information and to register, visit the website of the Southern California Chapter of CMAA
With the downturn in the economy, some pubic agencies are imposing regulations that require contractors use a certain percentage of local workers on public works projects. The trend is being met with resistance from some quarters.
Stockton's Local Hire Law: On September 1, 2009, the City Council for the City of Stockton, California adopted a "Local Hire Ordinance that requires 50% of the workforce on a public works project of at least $100,000 be residents of the City of Stockton. To read the staff report and a copy of the ordinance, as well as view the video of those testifying both pro and con before the council, click here.
Workforce Qualifications: While the policy intent of the ordinance is clear, it may have unintended consequences. For example, most contractors have a regular, well-trained workforce that knows how to work together well. By requiring the contractor to hire at least 50% local residents, a contractor from out of the city would not be able to necessarily marshal the most qualified team with the right experiences to perform the project. Thus, the public agency may find that it takes more resources to monitor and manage the quality of construction.
Washington State Resident Hiring Law Unconstitutional: Many have also raised questions about the legality of local hire laws. For many years, the State of Washington had a law requiring 95% or more Washington State residents where more than 40 workers were used, and 90% or more Washington residents where less than 40 workers were used. In 1982, the Washington State Supreme Court declared that chapter 39.16 RCW was unconstitutional and violated the privileges and immunities clause of the U.S. Constitution, Article IV, Section 2.
To read a copy of the Supreme Court decision, Laborers Local Union No. 374, et al, Appellants, v. Felton Construction Company, et al, Respondents, click here.
Check Your Bidding Documents: Even though Washington State's law was struck down by the court 27 years ago, a simple Google search for "RCW 39.16.005" reveals a number of public agencies in the state who still reference this law in their standard bidding documents. Check your bidding documents and make sure you've updated your boilerplate language.
Cleveland's Local Hiring Law Struck Down: The City of Cleveland, Ohio faced a similar situation with their local hiring ordinance, the Lewis Law. The Federal Highway Administration, which was funding road work for the city withheld funds from the city because of the ordinance. The United States Court of Appeals held that FHWA was within their rights to withhold the money, effectively striking Cleveland's local hiring law. To read the decision of the Court of Appeals, click here.
Observers are closely watching what the U.S. Department of Labor will do next after recently canceling a $35 million Job Corps Center project in Manchester, New Hampshire - a project that has been in the planning stages for almost a decade.
Many believe the project was canceled due to a bid protest filed by non-union contractor, North Branch Construction, who objected to the requirement that the successful contractor sign a "Project Labor Agreement" (PLA) on the project and have performed on at least three other projects with project labor agreements.
PLAs require the use of union labor on public works projects. Under an Executive Order by President Obama earlier this year, PLAs were encouraged on federal construction projects, a reversal of an eight year prohibition on PLAs by former President George W. Bush. The New Hampshire Job Corps Center also had a small business set-aside, meaning only contractors with less than $33.5 million in annual revenue would qualify.
The combination of the PLA and small business requirements would have the effect of severely limiting the bidding pool to small union contractors, mostly from out-of-state who have done previous PLA work and who could submit a payment and performance bond for the full $35 million project - somewhat problematic given the revenue restrictions for qualifying as a small business. Given the size of the project and its location in primarily non-union New Hampshire, the Department of Labor's requirements don't appear to be appropriately guaged to the project, and may be more of a response to political pressures than to effective bidding strategies. Stay tuned as the Department of Labor decides whether to open up the project for bidding again and whether they will keep the small business set-aside and the PLA requirements. For an updated article from the New Hampshire Concord-Monitor, click here.
Breakfast meeting:When: Wednesday, December 2, 2009Time: 8:00 a.m. to 10:00 a.m.Where: Downtown Los Angeles Marriott (333 S. Figueroa St, Los Angeles)For more information and to register, visit www.cmaasc.org.
Sponsored by: Southern California Chapter of CMAA (Construction Management Association of America)
Dinner Speech: SR 520 Bridge Replacement ProgramWhen: Thursday, November 19, 2009Time: 5:30 p.m. to 8:00 p.m.Speaker: Larry Kyle, Program Engineering Manager, HDR EngineeringSponsored by: Pacific Northwest Chapter of CMAA (Construction Management Association of America)Where: Rock Salt Streak House (1232 Westlake Ave. North, Seattle, WA)Cost: $40For more information and to register, contact Allen Wycoff at allenwycoff@hillintl.com.
Description: The SR 520 Bridge Replacement and HOV Program will replace the aging floating bridge built in the 1960s without the benefit of today's design standards. The 12.8 mile program area will affect the 115,000 vehicles that travel the Evergreen Point Bridge every day. The project timeline is to begin in 2009 with innovative pontoon construction testing effort and the new bridge to be open to drivers in 2014. The project costs are estimated between $4.5 to $6.6 billion, depending on the option selected.
The prevailing wage rate for Line Equipment Operators in all counties in the State of Washington will decrease by one cent effective on November 29, 2009.
This is a correction to the September 2, 2009 prevailing wage rates published by the State Department of Labor and Industries.
The official notice of the correction from L&I may be found on L&I's website by clicking here.
Networking, Dinner Meeting, and Presentation: - Sound Transit Beacon Hill Tunnel & Station...a Post Mortem
When: Thursday, November 12, 2009 Time: 5:30 p.m. to 8:30 p.m.
Where: Doubletree Guest Suites (16500 Southcenter Parkway, Tukwila, WA)
Speaker: Richard Sage, Sound Transit Construction Manager Sponsored by: For more information and to register, visit AACE's website.
As part of the normal public bidding process, public agencies regularly advertise and often place bidding documents (plans and specifications) online, either on their own websites or on the websites of companies focused on making bidding documents available to the contracting community electronically.However, agencies should think through the advisability of making some bidding documents, especially plans, available online. It may not be appropriate to put drawings of some facilities online. For example, if the facility to be renovated or built is a secure or critical function facility, or if the disclosure of the detailed drawings could be used inappropriately by some parties to compromise the agency's operations or the public's health and safety, the agency may want to consider alternative methods of advertising and disclosure.Strategic issues that should be addressed by the public agency include the following:- Public Disclosure: Are the documents exempt from public disclosure laws because of the sensitive nature of the material?
- Distribution of Bidding Documents: How should the bidding documents be distributed to bidders? Should only hard copies be distributed? Should the bidders be required to sign a non-disclosure statement and be required to return the bidding documents after bidding? Should the statement prohibit the bidder from copying the documents and providing them to others?
- Regulatory Requirements: Are there regulatory requirements that may prohibit the disclosure of certain sensitive information to the general public?
If you agency has facilities for which disclosure of detailed drawings and other information about facilities may compromise the agency's operations or the public's health and safety, it may be advisable to develop a policy and practices around how such documents will and will not be distributed to others outside of your agency.
The Associated General Contractors of America (AGC) issued a news release on November 2, 2009 reporting on the continuing decline of private construction spending over the last year.According to the AGC, "the construction industry continues to suffer from significant delines in privately-funded construction investments, with new federal figures showing private construction investments declined by 20.6 percent between September 2008 and September 2009. The new Census Bureau figures show there's no sign of an economic recovery yet for the nation's construction industry."The AGC also reported that publicly funded construction increased by 6.1 percent over the last year.To read the full AGC news release, click here.
The U.S. Department of Labor last week abruptly canceled the bid solicitation for a $35 million Job Corps Center that was to have been built in Manchester, New Hampshire. The project had a requirement that the successful bidder would be required to sign a Project Labor Agreement (PLA), essentially guaranteeing that only union labor would be used on the project.
North Branch Construction, a non-union contractor had filed a bid protest on the project with the federal General Accountability Office (GAO). The Associated Builders and Contractors (ABC), an association on non-union contractors, was supporting North Branch in the bid protest. Visit ABC's website to read their news release on the cancellation of the bid solicitation.I previously reported on the bid protest in earlier blog entries. Click on the date below to read these entries that provide more background information.- October 12, 2009 - Non-Union Contractor Challenges Federal "Project Labor Agreement" Requirement
- November 1, 2009 - A Non-Union Contractor Comments on Project Labor Agreements
To read a copy of the entire 64 page bid protest of North Branch Construction, click here.The New Hampshire UnionLeader newspaper has an article providing more details on the cancellation of the bid solicitation.
The American Association of Architects (AIA) released on November 3, 2009 a new Integrated Project Delivery (IPD) contract between the owner, contractor, and designer.
The C191-2009, Standard Form Multi-Party Agreement for Integrated Project Delivery, "provides the framework for a collaborative environment in which the parties operate in furtherance of cost and performance goals that they parties jointly establish." The Agreement also addresses incentives, project management, and conflict resolution processes.Most state and local laws do not permit the use of an IPD model for public contracts, and thus, at least for the time being, the AIA contract is likely to find its use primarily in private contracting. As a concept, however, IPD will be discussed more and more in the public sector.
AIA also offers a variety of other standardized design and construction contracts. Besides AIA, the other leading industry source for standardized design and construction documents is ConsensusDOCS.
The Municipal Research and Services Center (MRSC) and the Washington State Chapter of the American Public Works Association (APWA) have announced free training on emergency contracting at the following locations: - Yakima (November 24, 2009)
- Renton (December 1, 2009)
- Camas (December 9, 2009)
- Everett (December 17, 2009)
For more information and to register online, visit the website of the Contract Administration Subcommittee of APWA.
One of the most common audit findings from the Washington State Auditor's Office (and probably from the auditors in other states) involves a public agency that receives federal funding, but fails to verify that the selected contractor, consultant, or vendor has not been debarred or suspended from doing business on federally funded projects.
The Washington State Auditor's Office recently found that the City of South Bend (WA) failed to check on the debarment status of vendors on $756,375 in federal disaster funds received. The City's project manager checked the State Department of Labor and Industries' debarment list, believing that it was the only action required.
The City should have also checked the federal database, Excluded Parties List System (EPLS), found at http://www.epls.gov.
To read the complete audit finding, click here.
If you receive any federal funds, make sure that you check the debarment status of all contractors, consultants, and vendors on EPLS.
The annual meeting of the Northwest Region of the Design-Build Institute of America (DBIA) will be held on Monday, December 14, 2009 at noon at the local offices of M.A. Mortenson Construction (14719 N.E. 29th Place, Bellevue, WA). New officers for a one year term beginning on July 1, 2010 will be voted on at the meeting.
Nominations for Regional President, Regional Vice President, Regional Treasurer, and Regional Secretary are due by Friday, November 13, 2009 to Robynne Parkinson (rparkinson@rtp-law.com), current regional president and chair of the nominations committee.
In an October 27, 2009 interview with Ken Holmes, president of North Branch Construction in New Hampshire, by Craig Smith of the Pittsburgh Tribune-Review, Holmes offered his candid observations as a non-union contractor about Project Labor Agreements (PLA).
Holmes has filed a bid protest with the federal Government Accountability Office (GAO) about a PLA requirement on a $30 million Job Corps Center in Manchester, NH. Click here to read my previous blog post on the bid protest.In the interview, Holmes accurately described a PLA as "an agreement that mandates using union-only labor, or meeting all the work rules and paying into the benefit programs of the unions, even if the workers are not union members."He goes on to state that "ninety-one percent of the construction workers, private construction workers in New Hampshire, work for non-union companies." The result, he contends, is that neither the contractors or workers for this project will be from New Hampshire. "The only effective thing this will do is bring in union contractors and union labor from out of state."To read the complete interview with Holmes, visit the website of the Tribune-Review by clicking here.
Monday, November 2nd is the last day to register for the November 4, 2009 training workshop on "Public Works Contract Close-out: Bonding, Retainage, and Claims."
Only 2 spaces are left in the class.
I will be repeating the same class on February 24, 2010 in Everett, Washington. Let me know if you are interested in attending that class.
To register:
Where: Lakota Wastewater Treatment Plant (3203 SW Dash Point Road, Federal Way, WA 98023)Cost: - $100
- Optional box lunch is extra
Instructor: Mike Purdy
Class Description: - What is the purpose of obtaining a Payment and Performance Bond?
- Why must Retainage be withheld from the contractor?
- What should a public agency do if a subcontractor, supplier, worker, or state agency files a claim against the bond and Retainage?
- What steps must a public agency take before they can release the Retainage to the contractor?
- What is the impact on public agencies of Substitute House Bill 1555 on Retainage release? This bill was approved by the Legislature this spring.
- We will address these and many other issues through a combination of lecture, class interaction, and small group exercises.
Attendee List: Visit http://www.mpurdy.com/list.pdf for a list of who has registered
Questions - contact me at:
If a public agency receives federal funding for any project, one of the requirements is that the agency check to ensures that the selected vendor, contractor, or consultant is not debarred or suspended from doing business with the federal government.
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