Restricting Public Works Projects to Small Businesses

There is a little known and somewhat confusing law that the Washington State Legislature adopted in 2009 that permits public agencies in the state to restrict competition on certain public works projects to small businesses.

Gross Revenues Less than $1 Million:  RCW 39.04.155 (5) permits a public agency to use the Limited Public Works process (conducted through the Small Works Roster process for projects less than $35,000) and restrict competition only to those firms "with gross revenues under one million dollars annually as reported on their federal tax return."  

Here's how it would work.  If a public agency has a Small Works Roster in place, or shares a Small Works Roster with another agency or organization, bidding on projects less than $35,000 could be limited to just the businesses on the roster meeting the $1 million revenue threshold.  A public agency would, of course, have to collect this documentation from contractors on the Small Works Roster in order to verify eligibility to bid on the Limited Public Works projects based on the annual revenue threshold.  

What is a Limited Public Work?  Projects less than $35,000 are called Limited Public Works and a public agency may waive bonding and retainage on these projects, as long as it is noted in the bidding documents. 

Gross Revenues Less than $250,000:  A second provision of RCW 39.04.155 (5) is less clear.  It states the following:

"A state agency or authorized local government may adopt additional procedures to encourage small businesses that are registered contractors with gross revenues under two hundred fifty thousand dollars annually as reported on their federal tax returns to submit quotations or bids on small works roster contracts."

All this provision appears to accomplish is to state that public agencies may encourage small businesses (less than $250,000 annual revenues) to submit bids on small works roster projects.  It's unclear to me why legislation was necessary, and it doesn't appear to give small businesses any real advantages.