Mike Purdy's Public Contracting Blog: January 2011

Monday, January 31, 2011

Virginia School District Documents Low Use of Minority Businesses

A Virginia school district has completed a six month disparity study that documented a low level of utilization of minority and women owned businesses on the district's contracts.

The $131,930 study was conducted for Portsmouth Public Schools by MGT of America, Inc.

Competing Against Large Firms: The study also collected data about the barriers that business owners attributed to the low utilization figures. Almost half of the respondents noted the difficulty of competing against larger firms.

2% on Construction Projects: Less than 2% of the district's construction contracts were awarded to minority or women owned businesses.

Goals Recommended: The study recommended that the district add utilization goals to its contracts to increase the use of minority and women owned businesses as subcontractors.

National Issue: The challenges facing minority, women, and small businesses in competing for government work are not unique to the Portsmouth Public Schools. In Washington State, key stakeholders have created a Small Business Task Force, appointed by the Capital Projects Advisory Review Board (CPARB), to develop strategies to increase utilization of small businesses on public contracts.

4 Topics in 1 Bill

Senate Bill 5519 was recently introduced in the Washington State Legislature. It's a curious bill that addresses multiple topics.

Contractor Reporting of Off-Site, Prefabricated Items: One of the amendments proposed would make difficult-to-understand changes in the recently enacted reporting requirements of RCW 39.04.370 regarding the use of off-site, prefabricated, nonstandard, project specific items produced outside of the State of Washington for a public works project.

Shift from Labor and Industries to Awarding Agencies: The following chart summarizes the key changes from the current requirements to the proposed requirements. The general thrust of this section of the bill is to make awarding agencies and not the Department of Labor and Industries responsible for the reporting requirements.

The information about the use of off-site, prefabricated, nonstandard, project specific items would be reported to awarding agencies (not L&I), awarding agencies would somehow be responsible for ensuring the Affidavit of Wages Paid form included a request for this information, and awarding agencies (not L&I) would be responsible for reporting the information to the Capital Projects Advisory Review Board (CPARB).

Action	Current Requirement	Proposed Requirement
Contractors report information on use of prefabricated items	To L&I on the Affidavit of Wages Paid form	To the awarding agency
Include on the Affidavit of Wages Paid form requests for the required data	L&I responsible for taking this action	Awarding agency responsible for taking this action
Transmit information to CPARB	L&I	Awarding agency

It doesn't really make any sense for awarding agencies to pick up these duties when the reporting tool has already been established by the Department of Labor and Industries, and when the bill still requires the use of the Affidavit of Wages Paid.

Other features of SB 5519 include the following:

State Agency Purchases from Correctional Industries: For institutions of higher education, the bill would shift from the requirement to establish specific goals for using correctional industries to a requirement to "endeavor to purchase any goods or services produced in part or in whole from correctional industries when quality, service, and delivery will meet institutional needs and result in the best value for expenditure of state and institutional dollars." (RCW 28B.10.029)

Relaxed Personal Service Contract Competition Threshold : For state agencies subject to requirements for the use of personal service contracts, the bill would change the threshold for when evidence of competition is required from $5,000 to $20,000. Under the current law (RCW 39.29), evidence of informal competition is required for personal service contracts of $5,000 to less than $20,000.

Repeal of State Purchase Thresholds Inflationary Adjustment: RCW 43.19.1906, which is applicable to state agencies, establishes certain dollar thresholds and provides that the Office of Financial Management should adjust those thresholds based on inflation. SB 5519 would repeal the provision regarding OFM adjustment of the thresholds.

Sunday, January 30, 2011

Army Contracting Bribery Scandal Results in Prison Term

$200,000 in Bribes: Over the course of four years as a military contracting officer deployed overseas in Afghanistan, Iraq, and Kuwait, Army Major Roderick D. Sanchez accepted more than $200,000 in bribes from foreign companies (cash and other items), in exchange for Sanchez steering contracts to those firms. Sanchez was in a position to review bids and make award recommendations.

5 Years in Prison: On January 19, 2011, some two and a half months after he pled guilty to one count of bribery, Sanchez was sentenced to five years in prison in the bribery scandal. In addition, he will serve three years of supervised release when his prison term ends. He was also ordered to pay a $15,000 fine and forfeit Rolex watches, real estate, and other property he bought with the bribery money.

The Lure of Money: It's tragic that the lure of money can corrupt public contracting officials into accepting bribes, resulting in prison time and severe damage to the reputation of government.

Independent Oversight? Does your public agency have sufficient internal controls, independent oversight, and checks and balances in place to help prevent such abuses? It's worth examining your practices and developing systems and structures that make it easier for contracting officials to do the right thing, and harder to do the wrong thing.

Bill Would Eliminate Time Restriction for Filing Prevailing Wage Claim

House Bill 1433, introduced into the Washington State Legislature, would change the date a worker has to file a claim with the Department of Labor and Industries for unpaid prevailing wages on a public works project, from 30 days from the acceptance date of the project, to 30 days "from the date that an interested party knew or should have known about the potential violation of the payment of prevailing wage requirements."

Negative Impact on Workers: If approved, this bill would have a negative impact on workers not paid prevailing wages. It could be claimed that a worker should have known about being underpaid prevailing wages long before the current standard of 30 days following final acceptance. Thus, a worker would face the standard of filing the claim within 30 days of knowing they had been underpaid, rather than providing them with the option of waiting until after final acceptance. Nothing in the bill would seem to prohibit the worker from directly filing a claim against the retainage up to 45 days after final acceptance, only of filing a claim with L&I for that department to investigate and assist the worker on a claim against the retainage.

Positive Impact on Contractors: Contractors may likely support HB 1433 in that it would provide them with more certainty early on that a potential worker claim wouldn't surface at the end of the project when the contractor is unable to take steps to correct underpayments by a subcontractor. Again, however, nothing in HB 1433 would prevent a worker from directly filing a claim against the retainage up to 45 days after final acceptance, but the worker may not be able to obtain the assistance of L&I to investigate and assist in such a claim.

Job Opening: Procurement Manager, City of Vancouver, WA

The City of Vancouver, Washington is recruiting to fill the Procurement Manager position

Salary: $6,314 to $7,814 per month

Job Location: Vancouver, Washington

Position Description Summary: The Procurement Manager will supervise, coordinate and manage the Procurement division of the Financial and Management Services Department. This individual will oversee and coordinate the purchasing and contract administration policies and activities.

More Information: Click here.

Application Deadline: Position is open until filled. First screening scheduled on Monday, February 7, 2011.

Thursday, January 27, 2011

Design-Build Conference in Kansas City, Missouri

The Design-Build Institute of America (DBIA) will hold two back-to-back conferences this spring in Kansas City, Missouri to showcase the benefits of using Design-Build on both transportation and water/wastewater projects.

Design-Build in Transportation (March 28 - 30, 2011): "Crowded roads in poor repair, aging bridges and overpasses, and a lack of reliable public transportation are issues most Americans face everyday. The amount of money necessary to maintain and expand our transportation systems is staggering." Tracks will include:

Owners Perspective
Lessons Learned
Emerging Innovation
Contracts & Finance

Design-Build for Water/Wastewater (March 30 - April 1, 2011): "Over the next 20 years, the renovation or replacement of wastewater facilities alone will require expenditures of at least $390 billion, according to Environmental Protection Agency (EPA) estimates." Tracks at the Water/Wastewater portion of the conference will include the following:

Legal & Finance
Lessons Learned
Design-Build How To
Innovation & Future Trends

Information and Registration: Visit DBIA's website for more information about the Transportation and Water/Wastewater conferences.

Design-Build in Washington State: In Washington State, Design-Build is authorized under chapter 39.10 RCW for public agencies obtaining approval from the Project Review Committee on projects of at least $10 million. The Washington State Department of Transportation (WSDOT) has separate design-build legislative authority under RCW 47.20.780 and RCW 47.20.785.

Performance-Based Contracting Audit Planned

The Washington State Auditor's Office is seeking the services of a firm to help them audit the use of performance based contracting among state agencies.

The Auditor's Office defines performance based contracts as having the following characteristics:

Identifying expected deliverables
Identifying performance measures or outcomes
Making payment contingent on successful delivery of these performance measures or outcomes.

In November 2010, Washington Governor Chris Gregoire requested assistance from the Auditor's Office in evaluating performance contract practices by state agencies.

The audit will seek to answer the following questions:

Contract Management: How are agencies actively managing performance-based contracts? For example, if a vendor is not performing, what corrective actions are being taken? Are contractors/vendors being held accountable? Given limited resources, what options are available to improve management if needed?
Performance Measures: Do current performance-based contracts include appropriate and effective performance measures for assessing contractor performance? If not, why not?
Incentives: Do current performance-based contracts provide incentives for excellent performance and/or consequences for inadequate performance? If not, why not?
Leading Practices: What are leading practices around performance-based contracting? How could we apply these practices to Washington State?

Using the results of the audit, the Auditor's Office plans to write a summary report to the Governor by June 1, 2011.

Wednesday, January 26, 2011

Out-of-Scope Change Orders Increase Project Cost by 85%

Clallam County, Washington advertised and awarded a countywide asphalt overlay project covering seven roads, and awarded to the low bidder in the amount of $654,930.

2 Change Orders: During the term of the contract, the County issued two change orders for two additional roads totaling $555,986, an 85% increase over the cost of the original contract.

Audit Finding: The Washington State Auditor's Office recently issued an audit finding, noting that the County should have competitively bid the additional two roads. According to the audit finding, "the County cannot demonstrate it received the lowest price or that all vendors were provided equal opportunity to bid."

Click here to read the audit finding (3 pages).

Training: Contract Legal Potpourri

Contract Legal Potpourri

When: February 17, 2011 (8:00 a.m. to 12:00 p.m.)

Where: Lacey, WA

Training Overview:

Common Troubling Legal Clauses (i.e., Insurance, Letter of Credit)
Contract Recitals
Legal Clause Negotiations (Most common negotiated legal clauses)

Instructor: Trish Nightingale, WA State Attorney General's Office

Cost: $35.00

Sponsored by: South Puget Sound Chapter of National Contract Management Association (NCMA)

More Information and Registration: Jenna Mannigan at mannigj@wsdot.wa.gov or (360) 705-7671

Tuesday, January 25, 2011

Training: Developing and Managing RFPs and RFQs

Developing and Managing RFPs and RFQs

When: February 2, 2011 (8:30 a.m. to 4:30 p.m.)

Where: Arlington, WA

Training Overview:

Building the Public's Trust
Planning the Procurement
Standard Provisions and Concepts
Conflicts of Interest
Cost and Price Analysis
Advertising Issues
Pre-Submission Meeting
Receiving and Opening Proposals
Evaluation Committee
Evaluating Proposals
Managing Interviews
Recommending Award
Contract Negotiations
Developing Scopes of Work

Instructor: Mike Purdy

Cost: No charge to Enduris members; $100 for non-members

Sponsored by: Enduris

More Information and Registration: Click here

Monday, January 24, 2011

Federal Transportation Funded Projects Prohibit Withholding of Retainage

Federal regulations of the U.S. Department of Transportation (49 CFR 26.29) that essentially prohibit the withholding of retainage on projects it funds are causing states to change their practices and laws.

Waiver Denied by FHWA: After working with the Federal Highway Administration (FHWA) for three years, the Washington State Department of Transportation (WSDOT) has been unsuccessful in obtaining a waiver of compliance with the federal regulations based on the state's retainage statute (chapter 60.28. RCW).

Retainage Exemption Legislation Introduced: WSDOT has developed draft legislation that would exempt "public improvement contracts involving the construction, alteration, repair, or improvement of any highway, road, or street funded in whole or in part by federal transportation funds" from withholding retainage on these projects.

Payment Bond Would Protect Claimants: House Bill 1384 would also require that the protections currently provided to subcontractors, suppliers, workers, and three state agencies (Revenue, Employment Security, and Labor and Industries) through retainage be provided instead through the payment bond.

Implications of HB 1384:

Expansion of Protected Parties Under a Payment Bond: HB 1384 states that such federally funded projects "shall rely upon the contract bond as referred to in chapter 39.08 RCW for the protection and payment of (i) The claims of any person or persons arising under the contract to the extent such claims are provided for in RCW 39.08.010, and (ii) the state with respect to taxes imposed pursuant to Titles 50, 51, and 82 RCW which may be due." Payment bonds are not typically used to ensure payment of taxes, but HB 1384 would expand the purpose of payment bonds on federal transportation funded projects in Washington State. Public agencies would need to ensure that the payment bonds they received actually included language beyond the standard language so that the three state agencies would be able to make a claim against the payment bond. Furthermore, chapter 39.08 RCW that is referred to in HB 1384 does not mention that the three state agencies are protected by the payment bond. Perhaps HB 1384 should be amended to add a provision to chapter 39.08 RCW with respect to federal transportation funded projects.

Increased Bond Premiums: Under HB 1384, the cost of a payment bond premium to contractors may increase based on additional financial liability to bonding companies, an added cost that would be passed onto public agencies. Bonding companies would pick up additional liability in two areas: 1) Currently, it is typical that claims filed by subcontractors, suppliers, and workers subject to prevailing wages are first handled by retainage, and in the event retainage is not sufficient to cover all claims, through the payment bond. Under HB 1384, with no retainage, claims would go directly against the payment bond, thus increasing the potential liability of bonding companies. 2) Currently, a payment bond only protects subcontractors, suppliers, and workers subject to prevailing wages. Under HB 1384, three state agencies would be added as protected parties under the payment bond (Revenue, Employment Security, and Labor and Industries). The added premium costs for payment bonds would be passed onto public agencies and reflected in higher bids.

Increased Cash Flow: With no retainage being withheld, contractors and subcontractors on projects funded with federal transportation funds would increase their cash flow by being paid 100% of each progress payment.

Prompt Payment vs. Protection if Not Paid?: What FHWA's regulations point out is a policy collision on the purpose of retainage. FHWA's regulations are intended to help small businesses with their cash flow by ensuring either prompt payment of retainage or not withholding retainage. By eliminating retainage, as contemplated in the State of Washington's response to federal regulations, contractors and subcontractors would be paid 100% of each progress payment, but subcontractors and suppliers would loose the protection afforded by a claim being filed against retainage. The only recourse for a claimant under HB 1384 would be to file a claim against the payment bond.

Public Agencies Would Not Protected: Currently, under RCW 60.28.021, if after all claims against the retainage have been satisfied, "the public body may withhold from the remaining retained amounts for claims the public body may have against the contractor." This right to tap into retainage by a public body would be eliminated for federally funded transportation projects with the passage of HB 1384, which does not list public agencies as being able to make a claim against the payment bond.

Sunday, January 23, 2011

Proposed Legislation Would Restrict Use of "Limited Public Works Process" to Small Businesses

Small Works Rosters: Under current Washington State law (RCW 39.04.155), public agencies may establish a Small Works Roster and use that as the means to solicit contractors for public works projects with an estimated cost of $300,000 or less (and not advertise the project in the newspaper).

Limited Public Works Process: In addition, public agencies may, for projects estimated to cost less than $35,000, use a subset of the Small Works Roster, called the Limited Public Works process [RCW 39.04.155 (3)]. The primary distinguishing feature of the Limited Public Works process (in addition to the lower dollar threshold) is that an agency may waive the requirements for obtaining a payment and performance bond from the contractor, and for withholding retainage on each progress payment.

Proposed Legislation: House Bill 1173, which has been introduced in the 2011 session of the Washington State Legislature, would restrict the use of the Limited Public Works process to contractors based on their size as measured by annual revenue.

HB 1173 would make the following changes in existing law:

Small Business and Microbusiness Definitions: Two new definitions would be created. Both a small business and a microbusiness must be "owned and operated independent from all other businesses." A small business must have an annual gross revenue of less than $7 million, and a microbusiness must have an annual gross revenue of less than $1 million. For both types of businesses, public agencies would need to verify the revenue based on what the business reported on its federal tax return or its return filed with the Department of Revenue.

Increase Limited Public Works Process Threshold: The threshold for use of the Limited Public Works process would increase from projects estimated to cost less than $35,000 to those estimated to cost less than $50,000.

Restrictions on Soliciting Contractors Based on Size: HB 1173 would require that public agencies could only solicit "small businesses" for projects under the Limited Public Works process (those less than the proposed new threshold of $50,000). This means that larger contractors would not be eligible to participate in these smaller contracts. Furthermore, HB 1173 would restrict competition on Limited Public Works projects estimated to cost less than $35,000 to only "microbusinesses" (those with an annual revenue of less than $1 million).

Implications of HB 1173: The following are some of the implications of HB 1173 if it is approved as drafted:

Roster Administration: Public agencies using the Limited Public Works process under the Small Works Roster would pick up additional duties of verifying the annual revenue of contractors to determine eligibility to bid on smaller projects.

Less Competition: Under HB 1173, there may be fewer contractors submitting bids on projects estimated to cost less than $50,000. As a result of limiting the competition to only small businesses, public agencies may see an increase in prices.

More Use of Small Businesses: HB 1173 is a measure designed to increase the participation of small businesses in public contracting by carving out certain contracts in which they are only competing against other small businesses. The objective of increasing the use of small businesses (many which are minority or women owned) on public works projects has been a long term strategy of many, especially since the passage of Initiative 200 in 1998 by the voters of the State of Washington.

Delayed Contract Close-out: By increasing the Limited Public Works threshold to $50,000, HB 1173 would alter the current alignment of when retainage release approvals are required from state agencies (Revenue, Employment Security, Labor and Industries). Currently, with a $35,000 threshold for the Limited Public Works process, none of these projects require that public agencies notify the three state agencies to obtain approval for release of retainage. By increasing the Limited Public Works process threshold to $50,000, it would mean that projects of $35,000 or more up to an amount less than $50,000 would be required to go through the often time-consuming process of obtaining releases from the state agencies before retainage could be released to the contractor. This approval process would be required even if a public agency had waived withholding of retainage, potentially opening up a public agency to claims against the retainage from one of the three state agencies for retainage that was not withheld (and increasing the financial liability of the public agency).

Committee Hearing: The House Committee on Community Development & Housing will hold a public hearing on HB 1173 at 1:30 p.m. on Monday, January 24, 2011. The bill analysis prepared by House staff may be read by clicking here.

Thursday, January 20, 2011

Posting Prevailing Wage Information On the Project Site

As a follow-up to my blog entry of January 19, 2011 on the requirement to post prevailing wage information on public works construction project sites, a couple of additional things are important to remember:

Federally Funded Projects: On federally funded public works construction projects, the U.S. Department of Labor requires that the following prevailing wage information be posted at the job site:

Prevailing Wage Determination: A copy of the applicable prevailing wage determination for the project must be posted on the job site. To access federal prevailing wage determinations, including older archived wage determinations, visit the website of WageDeterminationsOnLine.gov.

Davis-Bacon Poster: An informational Davis-Bacon prevailing wage poster must also be posted on the job site. A copy of the required poster may be found at the following U.S. Department of Labor website.

Must be Visible to Workers: The prevailing wage determination and the Davis-Bacon poster must both "be protected from the elements and displayed in a prominent and accessible place where" they may be easily seen by employees.

Washington State Requirements: The State of Washington requirement for a contractor to post prevailing wage information on-site comes from RCW 39.12.020. It requires the following:

What Must Be Posted: A copy of the Statement of Intent to Pay Prevailing Wages approved by the Department of Labor and Industries must be posted on the project site. In addition, the address and telephone number of the industrial statistician of the Department of Labor and Industries must be posted so that workers know where to complain or inquire about prevailing wages.

When Do Posting Requirements Apply: The posting requirements apply for public works projects in excess of $10,000.

Must Be Readily Visible: The Statement of Intent to Pay Prevailing Wages must be posted in a location "readily visible to workers at the job site."

When Posting at Contractor's Office is Acceptable: "For road construction, sewer line, pipeline, transmission line, street, or alley improvement projects for which no field office is needed or established, a contractor may post the prevailing rate of wage statement at the contractor's local office, gravel crushing, concrete, or asphalt batch plant as long as the contractor provides a copy of the wage statement to any employee on request."

Joint Standards: For most federally funded construction projects, the contractor is required to pay the higher of the prevailing wages between federal and state wages. In addition, on a federally funded project awarded by a non-federal public agency in the State of Washington, the contractor would need to comply with both the federal and state posting requirements.

Public Agency Responsibilities: Public agencies should check to make sure contractors are posting the correct information on the project site.

Wednesday, January 19, 2011

Are Prevailing Wages Being Paid on Your Public Works Project?

Public agencies have a number of obligations to ensure that workers employed by the contractor and subcontractors on a public works project are being paid prevailing wages.

Federally Funded Projects: If the project is funded in whole or in part with federal funds, the public agency receiving the funds is required to monitor prevailing wages through the following:

Certified Payrolls: Collect weekly certified payrolls from the contractor and each subcontractor of any tier. Review the payrolls to ensure that prevailing wages are being paid. For a list of issues to monitor, visit my previous blog entry from December 1, 2010.

Interview Workers: Conduct interviews with workers at the construction site and ask questions about their duties and how much they are being paid. Correlate this information with the certified payroll reports to ensure that the contractor is accurately reporting their pay. Investigate when there are discrepancies between information obtained from interviews and certified payrolls.

Non-Federally Funded Projects: In Washington State, public agencies must do the following on public works projects:

Statement of Intent to Pay Prevailing Wages: Obtain a Statement of Intent to Pay Prevailing Wages from the contractor and each subcontractor who worked during the pay period for which the agency is processing a pay application. Payment should not be made to a contractor if any of these Intents, approved by the State Department of Labor and Industries, are missing.

Check That Intents are Posted On-Site: Make sure the contractor has complied with the state law requiring them to post on the job site, in a location visible to workers, a copy of the approved Statement of Intent to Pay Prevailing Wages.

Statement with Each Pay Application: With each pay application, RCW 39.12.040 (1)(b) requires the contractor to provide a statement with each application for payment that prevailing wages have been paid in accordance with the pre-filed Statement(s) of Intent to Pay Prevailing Wages. This statement is typically provided on a separate form provided by the public agency to the contractor and may also include a list of the subcontractors (of any tier) who worked on the site for the period for which payment is requested. The language on the form might state something like the following:

Tuesday, January 18, 2011

Training: Federal Grant Requirements

Half-day training (10:00 a.m. to 2:30 p.m.) on Federal Grant Requirements

When and Where:

February 2, 2011 (Renton, WA)
February 8, 2011 (Camas, WA)
February 16, 2011 (Yakima, WA)
February 22, 2011 (Everett, WA)

Cost: Free

Description: The purpose of this training is to give the audience a general understanding of federal grants and other forms of federal assistance. This training will help clarify the many complex grant requirements and how – in practical terms – to obtain compliance with those requirements. The training will also provides information about auditing and accounting requirements related to federal grants and loans. Topics include:

Allowable costs and cost principles under OMB Circular A-87.
Administrative requirements under the Circular A-102 Common Rule (for example, program income, matching contributions, procurement, purchase and disposition of equipment, etc.).
Priority compliance requirements (for example, Davis-Bacon Act, suspension and debarment, subrecipient monitoring, period of availability, etc.).
Internal control discussion on COSO model.
Audit responsibilities under OMB Circular A-133.
Preparing the Schedule of Expenditures of Federal Awards (a.k.a., Schedule 16).

Sponsored by: APWA-Washington State Chapter (Contract Administration Subcommittee) and Municipal Research and Services Center (MRSC)

Information and Registration: Click here

Monday, January 17, 2011

Selecting Consultants from a Roster

Many public agencies maintain rosters from which to select consultants, especially architects and engineers. The purpose of the rosters is to streamline the selection process for agencies, while still ensuring a process that is fair and transparent to the consultant community.

Individual or Shared Rosters: There are two basic ways in which rosters are maintained. Many public agencies manage their own roster and advertise for statements of qualifications to be submitted on a regular basis. Other public agencies collaborate and belong to rosters shared with other agencies, reducing the expenses involved in maintaining individual rosters, and making it easier for consultants to submit their qualifications.

Shared Rosters: In the State of Washington, there are two well known joint roster programs. One is sponsored by the Municipal Research and Services Center (MRSC) and the other by eCitygov.net which maintains a Shared Procurement Portal. The rosters have slightly different operating philosophies, technologies, and expenses. Check out their websites if you want to learn more about them.

Use of Rosters: In making selections from a roster, it is important for public agencies to have established policies on how and when the roster will be used. The following are a couple of issues to consider:

Dollar Threshold: Agencies should decide by policy at what dollar amount it is acceptable to select a consultant from the roster, and when a separate advertisement must occur to solicit qualifications and/or proposals from consultants.

Notification to Firms on Roster: Another important policy decision for public agencies to make in the management of rosters is how many firms should be notified of the consultant opportunity. Agencies who notify all of the firms on the roster (or the applicable roster category) incur two risks. First, especially in this market, they may find themselves inundated with submittals from consultants, all of which must then be evaluated. Second, some very qualified firms may choose not to submit if they know that the notice has been sent to all of the firms on the roster. Agencies should consider establishing a policy that enables staff to develop a short-list of qualified firms from the roster to solicit for any given need.

Selection of Architects and Engineers: In the State of Washington, the selection of architects, engineers, landscape architects, and land surveyors is governed by RCW 39.80, which is a qualifications based selection process. In other words, these professional services must be selected based on which firm is the most qualified, without using price as a selection criterion. The contract amount is then negotiated with the most qualified firm. RCW 39.80 requires public agencies to advertise their need for architectural and engineering services, either through an individual advertisement for a project, or through annual advertisement for soliciting qualifications for inclusion on a roster.

Practical Tip: In developing a consultant roster program, check the state laws that relate to your specific type of agency (city, county, school district, port district, housing authority, etc.), any federal regulations that may apply to grants you receive, and your agency's own internal policies to determine how a roster program might work for your agency.

Training: I have developed an all day training class on "Developing and Managing RFPs and RFQs" that I've taught a number of times now. I will be teaching the class Arlington, Washington on February 2, 2011, and again on April 6, 2011 in Lacey, Washington. For more information and to register, visit the website of Enduris, a public risk management pool, that is sponsoring the training. The following is a high level outline of the content of the class:

Building the Public's Trust
Planning the Procurement
Standard Provisions and Concepts
Conflicts of Interest
Cost and Price Analysis
Advertising Issues
Pre-Submission Meeting
Receiving and Opening Proposals
Evaluation Committee
Evaluating Proposals and Qualifications
Managing Interviews
Recommending Award
Contract Negotiations
Developing Scopes of Work

Please contact me if you have any questions about the training.

Thursday, January 13, 2011

National NIGP Conference in August 2011

2011 Forum: The National Institute of Governmental Purchasing (NIGP) will hold its annual NIGP Forum & Expo this summer from August 25-29, 2011 in National Harbor, Maryland, just outside Washington, D.C.

The event is the largest North American conference exclusively for individuals involved in public procurement, and offers a variety of educational opportunities.

Registration: Early bird registration rates are in effect through April 29, 2011. Click here for more information.

2012 Forum: In 2012, NIGP's Forum & Expo will be held in Seattle. For more information or to volunteer for helping with the Seattle event, contact either Karen Fitzthum or Heidi Bohl.

Wednesday, January 12, 2011

OSHA or State Safety and Health Standards?

Many states have adopted their own version of the federal OSHA (Occupational Safety and Health Administration) requirements.

The Question: In developing specification standards for public contracts, do OSHA standards apply or should individual state safety and health standards apply?

Washington State Regulations: In Washington State, where the legislature has adopted WISHA (Washington Industrial Safety and Health Act), there is a regulation that clearly addresses the relationship between OSHA and WISHA, noting that for most types of work, WISHA applies.

WAC 296-800-100 states the following:

Tip: Check the regulations in your state as to how they relate to OSHA, and then make sure that your specifications accurately reflect which regulations are applicable.

Tuesday, January 11, 2011

Washington State Proposes Consolidation of 5 Minority Affairs Offices

As part of Washington Governor Chris Gregoire's effort to increase governmental efficiency and reduce costs by consolidating state agencies and commissions, she has proposed creating a new state Office of Civil Rights, which would consolidate the functions of the following five agencies:

By consolidating these organizations, the governor expects to be able to cut 16 positions and save $1.4 million.

Under the proposal, many of OWMBE's functions - notably the State Minority & Women's Business Enterprise Certification and the Federal Disadvantaged Business Enterprise Program - would be handled by a Business Certification & Assistance Division within the new Office of Civil Rights.

The governor's office has released a policy brief on the proposed consolidation of services, including an organizational chart on the last page detailing the structure of the Office of Civil Rights.

Monday, January 10, 2011

Agency Fails to Comply with State and Federal Prevailing Wage Requirements

On three projects requiring the payment of prevailing wages, the Central Klickitat Conservation District (Klickitat County, WA) failed to comply with state and federal prevailing wage requirements.

No Prevailing Wage Forms or Payrolls Obtained: In an audit issued by the Washington State Auditor's Office, the auditor found that the District failed to obtain two state required prevailing wage forms from the contractors and subcontractors ("Statement of Intent to Pay Prevailing Wages" and "Affidavit of Wages Paid"). In addition, because one of the projects was funded in part by a federal grant, the District was required to obtain weekly certified payrolls from the contractor and subcontractors, something they failed to do.

State vs. Federal Prevailing Wages: Although not mentioned in the audit finding, contractors and subcontractors on federally funded projects must also pay the higher of the two rates between the federal Davis-Bacon prevailing wages and the applicable state prevailing wages.

Does Your Project Include Federal Funds? It is important for public agencies to know whether their projects have federal funding, as such funding often triggers a requirement for federal prevailing wages, and may also include provisions for other requirements that could impact the selection of the contractor and administration of the project.

Job Opening: Public Works Director for Chehalis, WA

The City of Chehalis, Washington is accepting applications for a Public Works Director.

Salary: Annual salary range $70,320 to $85,474

Job Location: Chehalis, Washington

Partial Position Description: The director oversees department operations through effective supervision and delegation of work to division superintendents, supervisors and other direct report staff. This position is responsible for directing and planning capital project departmental goals and needs, while working with county, state and federal agencies to obtain available funding.

More Information: Click here.

Application Deadline: Applications will be accepted until the position is filled. First review of applications will be on Tuesday, February 1, 2011

Sunday, January 9, 2011

Washington State Legislature Convenes January 10, 2011

The Washington State Legislature convenes on January 10, 2011 to address a large budget shortfall and other matters.

There has been discussion of a number of issues affecting public works contracting that may end up being introduced as legislation, or that may wait until 2012.

Legislation that may be introduced includes the following:

GC/CM: Protest procedures relating to the selection of mechanical and electrical subcontractors, selected early in the life of a GC/CM project.

Best Value: A pilot program for Best Value selection of contractors on public works projects.

Retainage: Exemptions from withholding retainage on federally funded highway and transportation projects to comply with federal regulations.

I will be providing updates during the legislative session on bills of interest.

Thursday, January 6, 2011

Federal Funding Brings Federal Requirements

Public Agencies: If your agency receives federal funding for any project, whether for construction, services, or otherwise, make sure you read the terms of the grant in order to comply with any federal requirements.

Contractors: If you are a contractor or consultant doing business with state or local public agencies, read carefully the requirements of public solicitations and contracts, especially in order to comply with federal requirements.

Debarment and Suspension: One of the most common federal requirements is that public agencies receiving federal funding check to ensure that the firm they are contracting with is not debarred or suspended from participating on federally funded projects. The requirement applies for contract amounts exceeding $25,000.

Audit Finding: In a recent audit from the Washington State Auditor's Office, the auditors found that the Washington State Fruit Commission failed to check whether ten vendors with cumulative contracts exceeding $860,000 were debarred or suspended from participating on federally funded contracts. The Commission indicated they were unaware of the federal requirement.

Wednesday, January 5, 2011

Federal Contractor Performance Database to be Publicly Accessible Online

Earlier this year, a new database was created that tracks contractors' past performance in order to help federal agencies make responsibility determinations when awarding contracts. New legislation signed this past summer means that large portions of this database will be publicly posted on the Internet.

The Database (FAPIIS): In April of 2010, the "Federal Awardee Performance and Integrity Information System" (FAPIIS) took effect (having been originated by the Clean Contracting Act of 2008, a part of the Duncan Hunter National Defense Authorization Act). The system is designed to facilitate consideration of past contractor performance when making contract award decisions.

Consolidation of Sources: FAPIIS pulls information from a number of existing sources, including:

Past Performance Information Retrieval System (PPIRS)
Central Contractor Registry (CCR)
Excluded Parties List System (EPLS)
Federal Procurement Data System (FPDS)

Data Included in FAPIIS: FAPIIS contains contractor information (for the past five years) relating to:

past performance evaluations
civil, criminal, and administrative proceedings
suspensions and debarments
non-responsibility or recipient not-qualified determinations
terminations for default, cause, or material failure to comply
defective pricing determinations
administrative agreements issued in lieu of suspensions and debarments

Access to FAPIIS: Since it was designed to be used to help the federal government make responsibility determinations, FAPIIS was originally intended to be restricted to federal employees involved in contract award decisions, select members of congress, and individual contractors (to verify their own information). However, just a few months after FAPIIS went into effect, a minor provision of the Supplemental Appropriations Act of 2010 amended the use of the database to provide that "... the Administrator shall post all such information, excluding past performance reviews, on a publicly available Internet website."

Mixed Response: As might be expected, there has been a mixed response to publicly releasing FAPIIS online (most notably, the Professional Services Council, a trade association of government contractors, has expressed concerns about the the release). No date has been set for the launch of the public, online version of FAPIIS.

More Information: For more information about FAPIIS, check out the following resources:

Tuesday, January 4, 2011

IRS Mileage Reimbursement Rate Increased for 2011

Effective January 1, 2011, the Internal Revenue Service standard mileage reimbursement rate increased from 50 cents per mile to 51 cents per mile.

In order to keep current with the IRS mileage rate, many public agencies simply list the "current IRS mileage reimbursement rate" in their contracts as the basis of reimbursing consultants for their miles, rather than listing a specific amount.

Click here to read the IRS news release with more information.

Monday, January 3, 2011

Washington State Increases Minimum Wage

Effective January 1, 2011, the State of Washington increased the minimum wage to $8.67 per hour, which represents a 12-cent per hour increase based on changes in the Consumer Price Index.

For public works construction projects, contractors are required to pay the prevailing wage rate for the classification of labor used, which is almost always higher than the minimum wage rate.

More information:

Click here to read the news release from the Department of Labor and Industries.
Comparison of minimum wages in 2011 for all states

Monday, January 31, 2011

Sunday, January 30, 2011

Thursday, January 27, 2011

Wednesday, January 26, 2011

Tuesday, January 25, 2011

Monday, January 24, 2011

Sunday, January 23, 2011

Thursday, January 20, 2011

Wednesday, January 19, 2011

Tuesday, January 18, 2011

Monday, January 17, 2011

Thursday, January 13, 2011

Wednesday, January 12, 2011

Tuesday, January 11, 2011

Monday, January 10, 2011

Sunday, January 9, 2011

Thursday, January 6, 2011

Wednesday, January 5, 2011

Tuesday, January 4, 2011

Monday, January 3, 2011

Search Public Contracting Blog

My Presidential History Blog

About Mike Purdy

Contact Mike Purdy

Subscribe to this Blog by e-mail

Archives by Subject

Archives by Date

Popular Blog Posts

Archive of PowerPoint Presentations

Reference Pages

Subscribe To Blog with a Reader

Procurement & Contracting Consultants

Construction Attorney Links

My Presidential History Blog

Job Opportunities