Are You Establishing an Estimate for Your Public Works Projects?

Are you establishing an estimate for your public works projects?  It's not only a good practice, but required for public agencies in the State of Washington (RCW 39.04.020), and undoubtedly in other states as well.

Why is development of an estimate a good practice and/or required?  Because most types of government agencies have different thresholds that impact the type of bidding process to be used, it is important to have an estimate to help choose the appropriate selection process.  In addition, if your project includes federal funding, many federal agencies require state and local agencies receiving federal money to develop an independent cost estimate prior to solicitation.

Do you have to publish your estimate for bidders?  Check your state and local laws to see what is required.  In Washington State, the estimate on a public works project is not required to be published (unless specific laws or policies related to your agency require it).  

• Why Publish the Estimate?  Some public agencies publish the estimate, or a range of the estimate, in their advertisement for bids, to give bidders a sense of whether the project fits within the size of projects they typically perform. Thus, the estimate serves as an important marketing tool.

• Why Not Publish the Estimate?  Other agencies do not publish the estimate in the advertisement for bids out of concerns that bidders will bid up to that amount, even if the cost of the work is less.  However, it seems to me in this highly competitive construction market that bidders will develop and submit very competitive bids, often even reducing their profit to nothing just in order to obtain the project and keep their workers busy. 

Is the estimate subject to public records disclosure?  In Washington State, even if you do not publish the estimate in your advertisement for bids, the estimate must be disclosed if your agency receives a public records request.  Check your state and local laws to determine whether the estimate is subject to disclosure upon request.