Wednesday, February 29, 2012

May an Agency Delegate Compliance with Federal Prevailing Wage Requirements?

State and local public agencies receiving federal funding for public works construction projects must meet various obligations to comply with federal prevailing wages (Davis-Bacon Act) requirements.

The Requirements:  State and local agencies receiving federal funding for a public works project must:
  • Include language in their bidding and contract documents regarding federal prevailing wages.
  • Monitor the compliance of the contractor and subcontractors to ensure that workers are being paid appropriately.
The Question:  May a state or local agency delegate to an outside consultant the responsibility to monitor the contractor's compliance with federal prevailing wage requirements?

Delegation Doesn't Eliminate Responsibility:  Monitoring for federal prevailing wage compliance (weekly payrolls and worker interviews) may be performed either by agency employees or by an outside consultant.  However, regardless of who is charged with monitoring the federal prevailing wages, the public agency is still responsible to ensure that it occurs in a manner consistent with federal regulations.  

Audit Finding:  The Washington State Auditor's Office recently issued an audit finding against King County, Washington for failure to include prevailing wage clauses in its contracts and to collect weekly payroll reports from the contractor and subcontractors on a parking lot construction project.  According to the auditor, 
"The County relied on its vendor, which had inadequate controls to ensure compliance with Davis-Bacon requirements.  The County did not review the vendor's processes to identify the inadequacies and address them."
Follow-up:  Regardless of who is charged with monitoring federal prevailing wage requirements on your public works project (employee or outside consultant), make sure they understand their responsibilities.  Provide them with adequate training and follow-up periodically to ensure they are fulfilling their obligations.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Tuesday, February 28, 2012

Performance Audit Issued on Construction Change Order Pricing


Purpose and Scope:  The auditor chose eight public agencies "to identify leading practices local governments can use to help reduce the cost of change orders" for both construction and architectural/engineering contracts.  Agencies selected for the audit were the cities of Bellingham, Everett, Puyallup, Richland, SeaTac, Shoreline, Spokane, and Thurston County.  Although the report title indicates its scope is "Construction Change Order Pricing," it also looked at some architectural and engineering changes.

Recommendations:  The audit identified the following three recommendations:
  • Establish a basis for reasonable and typical prices and rates for labor, materials, equipment, and markups.
  • Require contractors to submit detailed change order proposals so prices and rates can be evaluated and compared to established prices and rates.
  • Scrutinize change orders so that local governments do not pay more than established prices and rates.  When local governments expect A&E firms to evaluate their construction change order pricing, their contracts should clearly describe this in the scope of work.  Similarly, local governments should have policies and procedures to help staff members ensure change-order pricing matches established pricing and rates.
Issues:  On the surface, the auditor's recommendations appear reasonable.  Bidding and contract documents should establish the basis and formulas for how change orders will be priced, and contractors should submit detailed change order proposals which public agencies should scrutinize.  However, in at least a few areas, some of the audit report's recommendations are not practical or advisable.

Markup Rates:  The audit criticized the agencies for markup rates that exceeded what the auditor found were typical and reasonable, based on their survey of other agencies across the country.  While one of the purposes of a performance audit is to identify such issues, the audit failed to acknowledge that most of the agencies audited were simply using the standard specifications prepared by the Washington State Department of Transportation (WSDOT), either because it was required due to the funding of the project, or was more practical for both agency staff and contractors to have one specification for all public works projects.  To the extent that the audit has issues with markups, it is an issue that should be raised with WSDOT and not with the local agencies.  Establishing markup rates must take into account local conditions and contract expectations.

Prevailing Wages:  The audit report criticized agencies for paying more than the prevailing wage rate for some labor costs on change orders.  The audit noted that state law "does not obligate local governments to pay contractors for higher labor rates on change orders."  While that is certainly a true statement, the auditor's position does not reflect an accurate understanding of prevailing wages or construction costs.  
  • Contractors may pay more than prevailing wages:  Many contractors pay higher than the prevailing wage rates on public works projects in order to retain qualified workers or to comply with changing requirements of collective bargaining agreements. 
  • Contractors should be fairly compensated:  On change order work, contractors should not be expected to work at a financial loss simply because the auditor does not think workers should ever be paid more than prevailing wages.  The state's prevailing wage law is a worker protection act and establishes a minimum amount that workers must be paid. RCW 39.12 was never intended to be used to limit labor costs on change order work.
  • State's General Conditions:  While the audit holds up the State's General Conditions for Washington State Facilities Construction as a model, it does not seem to recognize that the requirements of the General Conditions contradicts the audit assertion that agencies should pay no more than the prevailing wage rates on change order work.  The audit noted that the General Conditions "limits labor rates on change orders to those submitted on the Statement of Intent to Pay Prevailing wages or higher amounts if justified and approved" by the agency.  Under two conditions, agencies pay more than the prevailing wage rates.  First, the prevailing wages listed on the Intent are often higher than the prevailing wage rates, and second, the General Conditions permit payment of a higher amount than reflected on the Intent. 
  • No artificial cap on labor:  Public agencies should pay labor on change orders consistent with what contractors are actually paying their workers, and it should not be artificially capped at prevailing wages.
Pre-established Amounts:  While public works contracts should establish a formula for how labor, materials, equipment and markups for overhead and profit are to be applied to change orders, the audit seems to suggest that unit prices and hourly rates for all change order work should be competitively bid as part of the original bid.  This is not always possible.  Particularly for a building or facility, units cannot be anticipated or bid for all possible changes.  Bidding hourly rates as part of an original bid, even if tied to estimated hours, does not make those hourly rates competitive since contractors have different levels of efficiency in performing the work.

Minimal Savings:  Of the $8.2 million in change orders that were actually audited for the eight agencies, the audit identified potential savings of just 2.1% or $175,074 based on the "leading practices" it cited.  This would suggest that public agencies are doing a good job at negotiating change order amounts, at least under the structure that the audit establishes. 

Summary:  While the audit report appropriately points out that public agencies should have a formula basis for change order work in their contracts, that contractors should submit detailed proposals consistent with the formulas, and that agencies have an obligation to carefully review such proposals, in some of its particulars the audit is misleading.  

Audit Report: Click here to read the 57 page performance audit report on "Construction Change Order Pricing."
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Job Opening: Cost Price Analyst - Deadline Extended

Port of Seattle
  • Position: Cost Price Analyst
  • Location: Seattle, Washington (Port Headquarters, Pier 69)
  • Closing Date:  Extended from Thursday, March 1, 2012 to Thursday, March 15, 2012
  • Salary: Minimum $69,108 to Midpoint $86,366
  • Job Summary:  The Cost Price Analyst will be responsible for developing the cost price report and defining procedures for implementation and utilization of the report.  This position requires strong leadership, communication, and relationship building skills.  The Cost Price Analyst will also be responsible for developing negotiation tools and training.  The best candidate will be self-motivated and directed.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Design-Build Certification Workshop

Design-Build Certification Workshop

When:  5 days:  March 5 - 9, 2012 (8:00 a.m. to 5:00 p.m.)

Where:  Bellevue, Washington (PCL Construction, 15405 SE 37th Street, Suite 200)

Agenda: 
  • Day 1: Fundamentals of Project Delivery
  • Day 2: Principles of Design-Build Project Delivery
  • Day 3: Design-Build Contracts & Risk Management
  • Day 4: Post Award Design-Build
  • Day 5: Certification Exam Prep
Cost:   $2,150 (DBIA Members); $3,150 (Non-DBIA Members)


More Information and Registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Monday, February 27, 2012

Seattle Drops Small Works Roster

The City of Seattle announced last week that it is eliminating its Small Works Roster program for public works construction projects valued at less than $300,000.

Limited Use:  City officials indicated that the demise of the 10 year old Small Works Roster was due its limited use.  Last year, the City bid only six projects through the Small Works Roster.  

More Use of Job Order Contracting:  Increasingly, the City has been using its two Job Order Contracts as the tool to complete smaller public works projects.  Advantages of Job Order Contracting over the Small Works Roster include the ability to have the contractor participate in the design process and increased use of women and minority owned businesses.  Only certain public agencies in the state are authorized to use Job Order Contracting (RCW 39.10.420).

Custom Rosters:  When the City's Small Works Roster ends on March 1, 2012, the City will continue to rely on Job Order Contracting and City crews for completing smaller construction projects.  In addition, the City will develop a few custom rosters for work at remote locations.

State Law:  Washington State law, RCW 39.04.155, permits public agencies to solicit bids from contractors on their Small Works Rosters as an alternative to advertising public works projects less than $300,000.  Just like an advertised project, a Small Works Roster project must be awarded to the low responsible bidder submitting a responsive bid.

More Information:  The February 23, 2012 issue of the Seattle Daily Journal of Commerce includes an article on the City of Seattle's decision to drop its Small Works Roster.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Sunday, February 26, 2012

Revised Bidder Responsibility Guidelines Adopted

On February 9, 2012, Washington's Capital Projects Advisory Review Board (CPARB) voted to approve revisions to its Suggested Guidelines for Bidder Responsibility that apply to public works projects. 

Background:  The Guidelines were originally developed in 2007 after the approval of bidder responsibility legislation by the state legislature.  State law addresses mandatory, supplemental, and subcontractor responsibility requirements in RCW 39.04.350 and RCW 39.06.020.

Summary of Changes:  The following are some of the changes in the revised Guidelines:
  • Requests for Change in Criteria:  Adds suggested language for public agencies to use in Invitations to Bid notifying bidders of their right to request modifications to Supplemental Bidder Responsibility Criteria that a public agency may have included in the bidding documents.
  • New Mandatory Criteria:  Adds new mandatory bidder responsibility criteria adopted by the legislature relating to apprenticeship utilization compliance and reporting requirements for off-site prefabricated materials.
  • Generic vs. Project-Specific Criteria:  Clarifies that Supplemental Bidder Responsibility Criteria may be either generic and applicable to all projects (samples are provided in the Guidelines) or project specific (examples from specific projects are included).
  • Examples of Criteria:  Examples of inappropriate Supplemental Bidder Responsibility Criteria from actual projects are included along with a critique of why the criteria should not be used.  There are also examples of criteria originally proposed, showing how it was improved upon before publication in the bidding documents.
  • Meeting All or Substantially Meeting Criteria:  Clarifies that public agencies may require that bidders meet all of the Supplemental Bidder Responsibility Criteria to be deemed responsible, or a public agency may exercise discretion and determine that a bidder is responsible if they substantially meet the criteria.
  • Checklist for Supplemental Bidder Responsibility Criteria:  A checklist to help public agencies in developing and implementing Supplemental Bidder Responsibility Criteria is included in the Guidelines, along with a website address for an electronic version of the checklist.
  • Miscellaneous Changes:  A number of technical and organizational changes were implemented to make the Guidelines more clear and readable.
View Guidelines Online:  Click here to go to CPARB's website where you will find a link to the revised Suggested Guidelines for Bidder Responsibility. 
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Thursday, February 23, 2012

Job Opening: Construction Management Cost Estimator

Port of Seattle
  • Position:  Construction Management Cost Estimator
  • Location:  Seattle, Washington (SeaTac Airport)
  • Closing Date:  Tuesday, March 13, 2012
  • Salary:  Minimum $69,108 to Midpoint $86,366
  • Job Summary:  Provide estimating knowledge, techniques and leadership to staff in the preparation and development of detailed cost estimates for contract change orders ranging in accuracy from Rough Order of Magnitude (ROM) to detailed Engineer’s estimates for the Port of Seattle. Qualified candidates should have experience in estimating industrial, marine, heavy highway, and commercial projects while working for government, general contractors, and subcontractors in the local region. Direct experience in public works estimating and cost controls. Experience in construction CPM scheduling, schedule review and analysis including time impact analysis, and experience working with current scheduling software is desired.

  • For More Information and to Apply:  Click here.  
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Wednesday, February 22, 2012

County Picks Bidder with Higher Price

The Washington State Auditor's Office recently issued an audit finding against King County, Washington for their procurement process in selecting a vendor to supply bus engine parts, tools, and engines.

Changing Requirements Before Award:  In March 2010, the County awarded a one year contract for more than $1.3 million to a firm that was not the lowest bidder, and that had failed to certify compliance with Buy America requirements.  They rejected two lower bids that did certify compliance with Buy America requirements.  Before award, the County sought and received a waiver of the Buy America requirements from the FTA, but did not re-bid the contract with the deleted Buy America requirements.

Federal Audit Finding:  The Federal Transit Administration (FTA) investigated the County's award of the contract in April 2010 and found that the County had rejected the two low bids without sound business reasons. 

Lack of Knowledge:  The State Auditor's Office noted that the County's action occurred because the "County does not have an adequate understanding of federal regulations regarding full and open competition requirements for procurement."

Know the Federal Regulations:  
  • Public Agencies:  If your agency is receiving federal funds, it is critical that you understand the federal requirements.  Failure to understand the requirements may result in audit findings, which may lead to the need to pay back federal grant dollars to the federal government. 
  • Contractors:  If you're a contractor, know what federal requirements apply and factor that into the cost of your bid or proposal.  Failure to do so may result in additional unanticipated expenses that you will not be reimbursed for.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Tuesday, February 21, 2012

Connecticut City Fires 2 Employees in Minority Business Scandal

The City of Bridgeport, Connecticut fired two city employees in late January 2012 for their role in setting up a minority business that obtained more than $380,000 of work as subcontractors on the City's public works projects.

City's WMBE Requirements:  The City has requirements that contractors must use minority business enterprises (MBEs) and women business enterprises (WBEs) for at least 30% of every public works project.

Conflict of Interest:  The following three City employees set up the company, Nybor Construction:
  • Director of construction administration (Arthur Harris), who was responsible for overseeing all City construction projects and in helping make decisions on awards
  • WMBE contract compliance officer (Dennis Scinto, Jr.) who was only individual responsible for ensuring compliance with the City's MBE ordinance
  • Administrative assistant in the public works department (Robyn Stephanie Waul-Blake).  The company was apparently run from Waul-Blake's apartment
Harris and Waul-Blake were fired, and Scinto is on administrative leave while an investigation continues.

City's Ethics Code:  The City's ethics ordinance states that no employee "shall use his position to secure or to grant special consideration, treatment, advantage, privilege or exemption to himself or any person beyond that which is available to every other person."

More Information:  For more information, click here to read a number of news articles from www.ctpost.com
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Federal Business Opportunity Event in Washington State

Alliance: Opportunities for Small Businesses:  The largest event in Washington State for federal agency relationship building

When:  March 15, 2012 (7:30 a.m. to 4:00 p.m.)

Where:  Puyallup, Washington (Puyallup Fair and Events Center)

Description: 
  • Dozens of federal agencies will be represented
  • Meet with government contracting employees
  • Network with small businesses
  • Roundtable discussion on working with primes and agencies
  • Training classes
More Information:  Click here.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Monday, February 20, 2012

Job Opening: Procurement Coordinator

C-TRAN (Vancouver, Washington)
  • Position: Procurement Coordinator
  • Location: Vancouver, Washington
  • Closing Date:  Open until filled
  • Salary: $4,406 to $5,955 per month
  • Job Summary:  The Procurement Coordinator is responsible for the coordination and management of the public procurement process for all supplies, equipment, and services required by C-TRAN.  Considerable knowledge of public purchasing methods and procedures, regulatory requirements, public works processes, and specification and contract writing techniques related to materials management procedures preferred.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Training: Strategies for Dealing with Problem Projects

Strategies for Dealing with Problem Projects:  Default Terminations, Terminations for Convenience and Deductive Change Orders

When and Where:
Time:  8:30 a.m. to 3:30 p.m.


Cost:
  • $125 (non members of WCIA)
  • Free (members of WCIA)
Instructors:

Information and Registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Thursday, February 16, 2012

Job Opening: Cost Price Analyst

Port of Seattle
  • Position: Cost Price Analyst
  • Location: Seattle, Washington (Port Headquarters, Pier 69)
  • Closing Date:  Thursday, March 1, 2012 Thursday, March 15, 2012
  • Salary: Minimum $69,108 to Midpoint $86,366
  • Job Summary:  The Cost Price Analyst will be responsible for developing the cost price report and defining procedures for implementation and utilization of the report.  This position requires strong leadership, communication, and relationship building skills.  The Cost Price Analyst will also be responsible for developing negotiation tools and training.  The best candidate will be self-motivated and directed.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Wednesday, February 15, 2012

Santa Fe Has Top Minimum Wage in Nation

Effective March 1, 2012, the City of Santa Fe, New Mexico will increase its minimum wage for employers to $10.29 per hour, topping San Francisco's minimum wage of $10.24.

Washington State has the highest minimum wage of any state in the nation at $9.04 per hour.  See previous blog entry of mine of this subject.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Tuesday, February 14, 2012

Effective Date for Bid Preference Requirements

In 2011, the Washington State Legislature adopted RCW 39.04.380 that provides for a reciprocal bid preference program for public works projects. 

Reciprocal Preference:  Under the new law, 
"in any bidding process for public works in which a bid is received from a nonresident contractor from a state that provides a percentage bidding preference, a comparable percentage disadvantage must be applied to the bid of that nonresident contractor."
Survey, Report, Rules:  The new law directed the state Department of General Administration (now known as the Department of Enterprise Services) to:
  1. Conduct a survey of the bid preferences of all the states
  2. Report back to the legislature
  3. Either adopt rules and procedures or announce that rules are not necessary for implementation.
Effective March 31, 2012:  It is my understanding that the Department of Enterprise Services intends to announce on March 1, 2012 that rules are not necessary for implementation, and that the reciprocal bid preference requirements will go into effect on March 31, 2012.

Background:  For more information on the new law, visit my May 24, 2011 blog on the subject.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Training: Contract Management

Contract Management

When: April 17, 2012 (8:00 a.m. to 4:30 p.m.)

Darin Matthews
Where: Spokane, Washington (Gonzaga McCarthey Athletic Center's Herak Club Room) 

Sponsored by:  NAPM-Spokane

Instructor:  Darin Matthews, Chief Procurement Office for Metro, Portland, Oregon

Agenda:
  • The importance of active contract management
  • The involvement of procurement throughout the contracting cycle
  • The importance of investing in your contracts early on
  • Contracting case studies
  • Contract management tools
Cost:  $150

Information and Registration:  Contact Pam Tatosky at (509) 354-7127 or by e-mail at pamt@spokaneschools.org.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Seattle Hosts Business Opportunities Event

Business Opportunities Event for Seattle Public Utilities

When:  Thursday, February 16, 2012 (9:30 a.m. to 12:30 p.m.)

Where:  Seattle City Hall (Bertha Knight Landes Room)

Purpose:  The event will provide the consultant community with information about upcoming opportunities to do business with Seattle Public Utilities (SPU).  Contract Managers will present information on the following projects:
  • North Transfer Station
  • Morse Lake Pump Plant
  • Landsburg Facilities and Chlorination
Information will also be presented on the City's contracting processes, contract requirements, and introduce business tools.  There will also be time for questions and to meet with SPU staff and other consultants.

Questions:  Contact one of the following:
Registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Monday, February 13, 2012

Seminar: Construction Manager's Role in Sustainable Infrastructure

Seminar:  Construction Manager's Role in Sustainable Infrastructure

When:  Friday, March 16, 2012 (7:30 a.m. to 3:30 p.m.)

Where:  Bellevue, Washington (Coast Hotel, 625 116th Avenue NE)

Cost: 
  • $175 (CMAA members) - $150 if by February 15, 2012
  • $225 (non-CMAA members) - $200 if by February 15, 2012
Sponsored by:  Pacific Northwest Chapter, CMAA (Construction Management Association of America)

Agenda:
  • Leadership by the CM in Achieving Sustainability Goals per CMAA's Standards of Practice (Paul Berry)
  • Public Works' Approach to Sustainable Infrastructure (Matt Collins - Jacobs and Jeff Fowler - Seattle Public Utilities)
  • Risk - A Lawyer's View on Sustainability (Douglas Reiser - Reiser Legal LLC and Meghan Douris - Oles Morrison)
  • Sustainable Materials Lessons Learned (Steve Read - Seattle Public Utilities and Jessica Murphy - Seattle Public Utilities)
  • Port of Seattle Consolidated Rental Car Facility (Anne Timmermans - Heery International and George England - Port of Seattle)
  • Owner Panel (King County Housing Authority, Port of Seattle, Seattle Public Utilities, Sound Transit)
Information and Registration: http://cmaapnwseminar.eventbrite.com
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Job Opening: Buyer

King County, Washington
  • Position: Buyer
  • Location: Seattle, Washington
  • Closing Date:  February 21, 2012 (4:30 p.m., Pacific Time)
  • Salary: $27.49 to $34.84 per hour
  • Job Summary:  Conduct market research for assigned commodities. Determine and develop procurement approach, selection criteria, cost estimates, and appropriate terms and conditions for solicitations.  Procure materials, supplies, equipment, and services.  Prepare ITBs, RFPs, and RFQs.  Review and evaluate bid and proposal responses received.  Establish contracts using all available sourcing tools.  Provide contract administration through delivery or project closeout.  Provide transaction oversight for the county's P-Card Program.
  • For More Information and To Apply:  Click here.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Sunday, February 12, 2012

Seattle Mayor Skirts Consultant Contracting Regulations

Mayor Mike McGinn
Seattle Mayor Mike McGinn's office entered into a $19,500 a month contract with a New Jersey consultant in July 2011 for help in developing a new NBA arena south of Safeco Field.

6 Months Late in Disclosing Contract:  The City's consultant contracting ordinance requires that all consultant contracts be filed with the City Clerk's office.  However, as of February 4, 2012 (more than six months after contract execution), according to the Seattle Times, the consultant contract with Stafford Sports LLC had not yet been filed with the City Clerk.  

Mayor Says No Deadline for Disclosing Contract:  McGinn's spokesman stated that "There's no deadline for filing with the clerk's office."  While the Mayor's office may be technically correct, it's a fairly big stretch to wait more than six months.  The contract only came to light because the Seattle Times filed a public records disclosure request for documents relating to the Mayor's secret discussions with developers for a new arena.  The intent of the consultant selection ordinance is to promote timely and transparent actions in city government, something being thwarted by the Mayor's office.

What's Required?  So what is the actual requirement?  Seattle Municipal Code 20.50.070 states that 
Departments shall file one (1) complete copy of each Consultant Contract with original signatures with the City Clerk or such official's functional successor following execution by all parties.
Is the Mayor in Compliance?  Based on the logic of the Mayor's office that there is no deadline for filing a consultant contract with the City Clerk's office, a contract could be filed years after execution and still be in compliance.  That's certainly not what was intended by the regulation, which is in place to promote transparency in public contracting.

More Information:  For more information, read the stories by the Seattle Times:
Lessons Learned:  In the world of public contracting, the public has a right to know where their tax dollars are being spent.  Public officials, whether elected or appointed, have an obligation to promote openness, transparency, fairness, and ethical behavior in their contracting actions. 
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Blog Tops 1,000 E-mail Subscribers!

On February 1, 2012, the number of e-mail subscribers to Mike Purdy's Public Contracting Blog reached a milestone by topping 1,000 subscribers!

1,400 Entries:  I began this blog almost five years ago, and have written over 1,400 blog entries during that time.  There are subscribers to the blog from more than half the states.

Sign-Up:  If you know of people who could benefit from the blog, encourage them to sign up for a free e-mail subscription.  Look in the upper right hand corner of the blog for the sign-up box.  Visit http://PublicContracting.blogspot.com.

Thanks:  Thanks for all of the positive feedback that so many of you have provided to me about the blog! 

Here's to the next 1,000 e-mail subscribers!
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 

Wednesday, February 8, 2012

Regional Contracting Forum Scheduled

The Seattle-based Regional Contracting Forum will hold its 10th annual event on April 4, 2012 at the Washington State Convention and Trade Center.

Reverse Trade Show:  The popular event is designed to provide small, minority, women, and veteran owned businesses direct access to regional contracting representatives in a semi-structured setting and one-on-one sessions with prime contractors, consultants, and public agency buyers.

Free Registration:  Registration is free for both businesses to attend and for public agencies to have a table to meet with businesses.

Information:  For more information about the Regional Contracting Forum, visit their website.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Tuesday, February 7, 2012

Washington State Publishes Updated Prevailing Wage Rates

The Washington State Department of Labor and Industries published updated prevailing wages on February 1, 2012.  According to WAC 296-127-011, the new prevailing wages will become effective 30 days later, or on March 2, 2012.

Effective Date for Projects:  For any public works project with a bid submittal deadline of March 2, 2012 or later, the new wage rates will be in effect.  For projects advertised prior to March 2, 2012, but which have a bid submittal date of March 2, 2012 or later, public agencies should issue an addendum with the revised prevailing wage rates.  To look up the new wage rates, visit Labor and Industries' website.

Current Prevailing Wages:  Projects with a bid opening date of March 1, 2012 or earlier are governed by the current prevailing wage rates dated August 31, 2011.  Since August 31, 2011, Labor and Industries has published three corrections to prevailing wages that are noted on their website.

Notifying Contractors of Applicable Wages:  It is important for public agencies to make sure that the correct prevailing wage rates are either included in the bidding documents for any public works project bidding on or after March 2, 2012, or that the bidding documents reference L&I's website and include other information.  See my previous blog entry on incorporation of the prevailing wage rates by reference.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Monday, February 6, 2012

Audit Hits Agency that Split up Public Works Project

The Skamania County (WA) Fire Protection District No. 3 built a new fire station, noting that it saved district taxpayers at least a half million dollars. 

However, in the process the district ran afoul of state bidding and selection laws, according to a finding issued by the Washington State Auditor's Office.

Audit Findings:  The following are some of the problems noted by the auditor:
  • The Fire District did not comply with RCW 39.80 in the selection of an architect, but used the services of a volunteer firefighter without publicly advertising for the work.
  • The Fire District split the construction of the fire station into smaller components, thus not triggering the $20,000 threshold for competitive bids required by fire districts on public works projects.
  • The Fire District did not maintain adequate records to support its procurement procedures.
Creativity vs. Compliance:  As a public agency, the Fire District failed to temper its creativity with its obligations to ensure compliance with state law.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Sunday, February 5, 2012

Should You Reduce the Amount of Payment and Performance Bonds?

Most public agencies require that contractors submit a Payment Bond for 100% of the contract amount, and a separate Performance Bond for 100% of the contract amount.

Can Bond Amounts Be Reduced?  The amount of the bonds is generally regulated by state or local laws.  Sometimes, these laws will permit a public agency to reduce the amount of the bonds.  For example, in Washington State, RCW 39.08.030 permits cities and towns to reduce the bond amounts to not less than 25% of the contract amount.  If an agency chooses to reduce the amount of the bonds, it should specify the required bond amounts in the bidding documents.

Risks of Reduced Bond Amounts:  There are risks, especially in this difficult economic market, of reducing the amount of Performance and Payment bonds.  In the event of a default by the contractor or their failure to pay subcontractors, suppliers, and workers, the public agency should ensure maximum protection of the taxpayers' assets.

Bond Premiums Not Affected:  When making decisions about whether to issue the bonds to a contractor, bonding companies evaluate the total risk of the project.  Generally, the bond premium that contractors pay to sureties for a reduced bond amount is the same as a bond amount for the full contract price.  So there's really not a lot of reasons why a public agency should reduce the bond amounts.  
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Training: Competitive Public Construction Bidding

Competitive Public Construction Bidding

When:  March 15, 2012 (1:00 p.m. to 5:00 p.m.)

Where:  Seattle, Washington (Crowne Plaza Seattle, 1113 Sixth Avenue)

Agenda (Faculty):
  • The Bidding Process (B. Michael Schestopol)
  • Alternative Public Project Procurement Process (Rodney S.Eng)
  • Insurance Considerations in the Bidding Process (Thomas F. Ahearne)
  • Contractor and Municipality Perspectives on Bidding Construction Projects (Dennis P. Greenlee, Jr.)
  • Strategies for Bidding Claims (Karin L. Nyrop)
Cost: $325

Information and Registration:  Visit the website of The Seminar Group.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Wednesday, February 1, 2012

Additional Public Works Legislation Introduced in Washington State

In addition to the bills I noted in my blog from January 16, 2012, the following three bills relating to public works contracting in Washington state have been introduced this session:

Increasing Use of Design-Build on WSDOT Projects:  Second Substitute Senate Bill 5250 would require the Washington State Department of Transportation to use Design-Build on public works projects over $5 million, down from the current $10 million requirement.  The bill would also require WSDOT to report to the legislature each biennium on the performance of Design-Build on its projects.

Limiting Prevailing Wage Complaints:  Senate Bill 6480 would restrict the ability of individuals to file a wage complaint against a contractor a) if an employer paid a prevailing wage rate based on a "previous written determination" of the Department of Labor and Industries or b) if an employer paid the prevailing wage rate as noted on the Affidavit of Wages Paid form.

Requiring Certified Payrolls on Pubic Works Projects:  Senate Bill 6416 is a poorly written piece of legislation that would impose a significant burden on contractors (especially small businesses) as well as public agencies.
  • Earlier Submittal of Intents:  The bill appears to require earlier submittal to public agencies of the Statement of Intent to Pay Prevailing Wages from a prior to payment standard to before the agency "finalizes a contract for any public work subject to prevailing wage requirements."  The use of "finalizes" is ambiguous in this context as to whether it means award or execution.  It is also problematic in that many subcontractors are not known at that point in time.
  • Payrolls Required Before Payment:  The bill would also require public agencies to require electronic certified payroll records from the contractor and all subcontractors prior to making any payment to the contractor.
  • Agencies Must Publish Payrolls:  The bill would require public agencies to publish the payrolls on a "publicly accessible database" after deleting the Social Security numbers of the workers.  Agencies would also have to forward a copy of the unredacted payrolls to the Department of Labor and Industries.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com