Washington Legislature Clarifies Intent on Alternative Public Works

In response to actions by certain public agencies that have caused concern among contractors and designers, the Washington State Legislature approved Engrossed House Bill 1690 to clarify its intent on existing laws regarding Alternative Public Works contracting procedures.

The new law is effective on July 13, 2010 and deals with the following subjects:

Alternative Processes Restricted to those in RCW 39.10:  Primarily in response to the University of Washington authorizing a developer model to pursue renovations to Husky Stadium, the new law states the following:  

"It is the intent of the legislature to clarify that, unless otherwise specifically provided for in law, public bodies that want to use an alternative public works contracting procedure may use only those procedures specifically authorized in chapter 39.10 RCW."  

Chapter 39.10 RCW authorizes the use of Design-Build, General Contractor/Construction Manager (GC/CM), and Job Order Contracting, but does not authorize a developer model that mixes certain elements from the private sector with Design-Build and GC/CM.

Applicability of Chapter 39.10 RCW to Housing Authorities:  Housing authorities have long argued that the alternative public works contracting procedures of chapter 39.10 RCW do not apply to them given their authorizing legislation (chapter 35.82 RCW).  EHB 1690 states that

"All housing authorities shall be subject to the provisions of chapter 39.10 RCW except where alternative requirements or procedures of federal law or federal regulation are authorized." 

The practical impact of this new legislation is probably that housing authorities will continue to use a "GC/CM-type" of procurement for certain public works without following chapter 39.10 RCW.  This is based on their position that federal law and regulations permit such an alternative public works contracting method, and most funding for housing authorities comes from the federal Department of Housing and Urban Development (HUD). 

Applicability of State and Federal Prevailing Wages to Housing Authorities:  The new law states that

"the requirements of chapter 39.12 RCW regarding prevailing wages shall apply to housing authority public works except where specifically preempted by federal law or federal regulations."

The Code of Federal Regulations, Title 24, Section 965.101 states that federal prevailing wages preempt state prevailing wages on projects "assisted with funds for low-income public housing under the U.S. Housing Act of 1937" (HUD funded).  

Under the new law, non-federally funded projects of housing authorities would clearly be subject to state prevailing wages, and federally funded projects funded by agencies other than HUD would be subject to both state and federal prevailing wages, with the contractor required to pay the higher of the two wages. 

CPARB Authorized to Recommend New Contracting Procedures:  The duties of the Capital Projects Advisory Review Board (CPARB) have been expanded with the new law to include responsibilities for submitting recommendations to the legislature "evaluating alternative contracting procedures that are not authorized" already.