Washington state's new reciprocal bid preference law for public works projects will go into effect on March 30, 2012, according to information published by the Department of Enterprise Services (DES).
What public agencies are affected? RCW 39.04.380 afffects all state and local agencies in Washington with the authority to procure public works.
What is a Reciprocal Bid Preference? The following is an excerpt from the state's recent announcement:
Beginning March 30, contractors from states that have an in-state bidder preference competing on public works projects in Washington will have a reciprocal amount added to their bid proposals. The reciprocal amount will be added to bring them in line with the disadvantages contractors based on Washington face when bidding on projects in Alaska, Nevada, New Mexico, and Wyoming."
How is the bid preference calculated? Public agencies in Washington state should add a reciprocal disadvantage to all public works bids submitted by contractors from states with an in-state bidding preference (Alaska, Nevada, New Mexico, Wyoming). The disadvantage amount will be equal to the advantage given by the state with the bidding preference.
Example of Calculation:
|
Alaska
contractor bid amount
|
$100,000
|
|
Multiplied by Alaska
bidding preference
|
x 0.05
|
|
Total
|
$5,000
|
|
|
|
|
Alaska
contractor bid amount
|
$100,000
|
|
Amount added to Alaska
contractor bid
|
$5,000
|
|
Final bid total for award evaluation
|
$105,000
|
If the Alaska contractor's final bid total is lower than the bid amounts submitted by all other contractors, including those from Washington, then the Alaska contractor is the successful bidder, and will be awarded a contract for the bid amount of $100,000.
What percentage preferences apply? The four states with an in-state bidding preference for public works projects (Alaska, Nevada, New Mexico, Wyoming) all have a 5% bid preference for in-state bidders.
What state is a contractor from? The state of residence for a
nonresident contractor is the state in which the contractor was
incorporated or, if not a corporation, the state where the contractor's
business entity was formed. Public agencies will need to collect information indicating the state of residence of the bidders. This may be accomplished either on the bid form or after bid opening.
What is a nonresident contractor? Nonresident Washington state contractors, at the time of bidding a public works project, are "from a state that provides a percentage bid preference to its resident contractors bidding on public works contracts" and do not have a physical office located in Washington. Washington state resident contractors, on the other hand, have a physical office located in Washington.
What is the effective date of the new law? The state has indicated the new requirement will be effective as of March 30, 2012, but does not specify whether that is based on bidding or award date. In order to apply the new law, bidders will need to understand the reciprocal bid preference, and thus it seems to me, that the March 30 date would be for any project with a bid submittal deadline of March 30 or later. Bidding documents should address the reciprocal bid preference, by addendum if necessary.
Language for Bidding Documents: The Department of Enterprise Services has amended its Instructions to Bidders to include language addressing the implementation of the reciprocal bid preference. Public agencies should review this language in sections 0.01 A and 0.12 E and include appropriate language in their bidding documents regarding the reciprocal bid preference requirements. Click here to review the state's Instructions to Bidders.
Non-Applicability: The reciprocal bid preference requirements do not apply to:
- Small Works Roster or Limited Public Works projects (RCW 39.04.155)
- Emergency public works projects (RCW 39.04.280)
- "Any other procurement exempt from competitive bidding." Although not explicitly stated, this may include public works procurements that are not based strictly on competitive bids such as alternative public works contracts (RCW 39.10) and procurements covered in RCW 39.04.270 (electronic data processing and telecommunications).
Additional Resources: The following links from DES provide additional information:
- DES announcement of March 30, 2012 effective date
- DES report to the Legislature, December 2011
- Bidding Preference Survey of States
- DES Instructions to Bidders
- Roland Orr, DES contracts manager, may be contacted for more information: (360) 407-9361 or roland.orr@des.wa.gov.
- I'm interested in hearing from you about any specific questions you may have about interpreting or implementing this new provision. Please contact me with your thoughts
Mike Purdy's Public Contracting Blog
© 2012 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com
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