Thursday, October 28, 2010

City Adds More than $500,000 to Contract by Change Order

The Washington State Auditor's Office has issued an audit finding asserting that the City of Bellingham, Washington should have competitively bid $536,151 of sewer pipe and drainage repairs, instead of issuing six change orders to an existing and unrelated contract.

Obtaining a Fair Price:  Change orders for work unrelated to an original contract violate the intent of the state's competitive bidding requirements, and do not, according to the auditor, "guarantee the most efficient use of public resources."  The City asserted that they negotiated a significant reduction in the contractor's markup percentage for the change order work.

Emergency Not Declared:  "In retrospect," the City noted, it "should have declared an emergency for public safety/health and environmental reasons."  The change order work was authorized when the City discovered that sewer pipes and drainage under City Hall were leaking, necessitating immediate action.  

A formal declaration of an emergency and waiving competitive bidding would have authorized the City to contract for the emergency repairs through either a new contract or any existing contract, even if not related to the emergency work.

City Changes Practices:  According to City Public Works Director, Ted Carlson, the City has made changes to its practices to ensure similar problems don't occur in the future.

Additional Information:
Mike Purdy's Public Contracting Blog (© 2010 by Michael E. Purdy Associates)

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