Mike Purdy's Public Contracting Blog: July 2012

Tuesday, July 31, 2012

Implications of New State Law on Indemnification

As I noted in a previous blog posting, the Washington State Legislature adopted EHB 1559 in 2012 that changes indemnification requirements on architectural and engineering contracts. The new law will require different indemnification language in contract of public agencies

MRSC article: The Municipal Research and Services Center (MRSC) has published an article entitled "New Indemnification Language for A/E Contracts" by John W. Carpita. The article includes:

A summary of the new law
An analysis of the new law by Kevin J. Yamamoto, City Attorney for Puyallup
Recommended contract language provided by Eric Larson, Deputy Director of the Washington Cities Insurance Authority

Click here to read MRSC's article.

Monday, July 30, 2012

California Court Exempts City Project from Prevailing Wage Requirements

A brewing conflict in California over prevailing wages between a city and labor unions has been resolved with a ruling by the California Supreme Court that prevailing wages were not applicable for the construction of two new city-owned fire stations.

Court rules prevailing wages not applicable: The conflict started with a City of Vista law banning prevailing wage requirements on city public works projects. The State Building and Construction Trades Council of California, AFL-CIO filed suit over the issue, citing a state law that requires payment of prevailing wages on public works projects. The case worked its way up through the court system, and on July 2, 2012 the Supreme Court ruled in favor of the City of Vista, a charter city.

"Municipal Affair" or "Statewide Concern"? The Supreme Court's ruling hinged on drawing a line between the interests of charter cities and the state. In general, charter cities have the right to govern their own internal "municipal affairs." However, if this results in a city law conflicting with state legislation that properly addresses a legitimate "statewide concern," the city law is preempted by state law.

In this case, the Court found that, although the city's rejection of prevailing wage requirements was at odds with state requirements, the issue was nonetheless a localized municipal affair that did not rise to the level of a statewide concern. Thus, as a charter city, it falls under the City of Vista's authority to regulate.

Future Impacts While this case is concluded, its impacts are predicted to be far-reaching. The demarcation between the municipal authority of charter cities and the state's jurisdiction over statewide concerns has been long-running battle in California. The lure of reduced costs without prevailing wage requirements may prove a compelling draw for many cities experiencing difficult financial situations.

Additional Resources:

Summary of the decision by Littler Mendelson, a national employment & labor law firm
Full California Supreme Court Opinion (PDF)

Sunday, July 29, 2012

Review for Suspension and Debarment Status on Federally Funded Projects

Five school districts in the Washington state recently received audit findings from the State Auditor's Office for failing to check whether the parties they contracted with were suspended or debarred from doing business on federally funded projects.

The requirement: Public agencies receiving federal funding are required to check that the parties they are contracting with are not suspended or debarred from doing business on federally funded projects, if the contract is $25,000 or more.

Agencies with audit findings: The following school districts received audit findings recently on this issue. Click on the name of the school district to read the audit finding.

How to check a firm's status: Visit www.epls.gov to check the status of a firm, and then print the web page as documentation and keep it in your contract file for review by auditors.

Thursday, July 26, 2012

Job Opening: Contract Administrator for Service Agreements

Port of Seattle

Position: Contract Administrator for Service Agreements

Location: Seattle, Washington

Closing Date: Monday, August 13, 2012 at midnight

Salary: Minimum $57,525 - Midpoint $71,897

Job Summary: The individual in this position will manage the procurement contract process for routine service agreements from inception to closing.

For More Information and to Apply: Click here.

Job Opening: Procurement and Supply Specialist 3

Washington State Department of Transportation (WSDOT)

Position: Procurement and Supply Specialist 3

Location: Lacey, Washington

Closing Date: August 10, 2012 at 11:59 p.m.

Salary: $40,260 - $52,872 annually

Job Summary: This position is responsible and accountable for the full life-cycle of procurement and supply management functions in accordance with state laws and requirements. This involves application of professional best practices in inventory control and accountability, supplier performance, and mitigation of risks.

For More Information and to Apply: Click here.

Wednesday, July 25, 2012

Job Opening: Contracts and Forms Manager

Washington State Department of Licensing

Position: Contracts and Forms Manager

Location: Tumwater, Washington

Closing Date: August 8, 2012

Salary: $66,000 to $75,000 per year

Job Summary: This position supervises employees of varying levels who are responsible for agency wide procurement, forms and publications development, and rants and contracts management functions. To ensure effective, compliant, and efficient operations the individual in this position collaborates with staff and stakeholders to develop and implement strategic direction for all purchasing and contract development operations. With a solid foundation in Washington State procurement and contracting statutes, administrative codes, and practices, the individual establishes partnerships with other state agency representatives and vendors to maximize resources, minimize or eliminate agency liability, and share services where possible and practical.

More Information: Click here.

Training: Insurance in the Construction Industry

Training: Insurance in the Construction Industry

When: October 3, 2012 (9:00 a.m. to 5:00 p.m.)

Where: Seattle, Washington (Washington State Convention Center)

Cost: $450. Discounts available for various attendee types

Sponsored by: The Seminar Group

Information and Registration: Click here.

Tuesday, July 24, 2012

New York City Enacts Living Wage Bill Over Mayor's Veto

The New York City Council recently overrode Mayor Michael Bloomberg's veto of the city's controversial "living wage bill."

The fight may be just beginning, however, as the mayor has vowed to sue to prevent the law from taking effect and the bill's chief proponent, council Speaker Christine Quinn, has pledged to defend it.

3 types of wages: In general there are three types of laws that specify the minimum amount that employers must pay:

Minimum wages: These wages apply to all workers within in a given governmental jurisdiction.

Prevailing wages: These wages apply to workers performing certain jobs (classifications) on public works construction/improvement projects.

Living wages: Living wages generally apply to all workers on all or some public projects, although the details of these laws varies since they are often adopted by individual cities or counties.

Workers covered by Living Wages: While the type of workers that living wages applies to varies widely, living wages generally cover the following types of workers:

All workers on public contracts: Living wage requirements often apply to a company's employees working on a public contract. In some cases, the wages apply to all public projects or they may apply to just to some contracts. Many living laws cover only service contracts or contracts for certain kinds of work. For example, a 2002 New York City measure specifically applies living wages to in-home healthcare, janitorial & cleaning, security, daycare, temporary clerical, and food service contracts, among others.

Workers for companies receiving public assistance: Living wages sometimes apply to employees who work for companies benefiting from public assistance, such as tax breaks/incentives. The recent New York City law takes this approach (although with many exceptions and restrictions).

Other workers: In some cases, the living wage movement has expanded coverage to include workers and employers regardless of whether there is any relationship to the government or public projects. While many agencies no longer use the “living wage” label, a similar impetus often drives cities and counties to establish a base wage for the following:

· 1) Everyone: Essentially a local (city/county) minimum wage (enacted by cities including San Francisco, CA; Washington, DC; and Albuquerque, NM).

· 2) Specific Companies: There have been some attempts to target living wage laws towards specific types of businesses regardless of their connection (or lack of connection) to the government. For example, in 2006 the mayor of Chicago vetoed a bill setting a minimum pay rate for retailers over 90,000 square feet, and in 2007 a similar citizen initiative in Spokane, Washington failed to make the ballot.

Characteristics of Living Wages: Although terminology varies (and the different concepts sometimes overlap), the process of establishing a living wage typically differs in a couple of ways from that of minimum and prevailing wages:

Basis of calculation: Living wage amounts are calculated on how much income is needed to support a household. Prevailing wages, on the other hand, are calculated from surveys of how much workers are usually paid for various types of work. Minimum wages are usually set by legislative action or sometimes are tied to the Consumer Price Index.

Established by local governments: Living wages are usually enacted by cities or counties, although the movement has sparked related campaigns at several universities, and in 2007 Maryland passed the first state-wide living wage law. Both minimum and prevailing wages are traditionally set by state or federal law (although they have occasionally been implemented by cities or counties).

Selection preference for Living Wages: Sometimes, contractors that pay all their workers the living wage are given preference in the selection process (attempts to make this mandatory haven’t gained much traction, at least in larger cities and counties). For example, the recent controversial New York City law requires economic development projects to “encourage” living wages, and suggests the implementation of a selection preference as one way to do this. As recently as 2010, President Obama was reported to be considering a so-called "high road" contracting policy to establish a similar preference at the federal level.

Expansion of Living Wage requirements: The living wage movement has seen support and opposition similar to other worker pay legislation, and often from the same sources. In fact, several states have specifically barred local governments from enacting living wages. For example, a few months after Atlanta established a living wage bid preference in 2005, the state of Georgia responded by preempting it with a ban on any local attempts to "control or affect" wages of companies with public contracts. The living wages movement has undeniably made inroads in the past two decades, however, with many estimating that 120 or more laws have been passed across the country, including some of the nation’s largest cities.

Additional resources:

Article on the passage of New York’s recent law by the New York Times

Overview table of living wage laws nationwide as of 2010 by the National Employment Law Project [PDF]

Summary table of living wage laws in the US from the city of Calgary, Canada [PDF]

Mike Purdy's Public Contracting Blog

http://PublicContracting.blogspot.com

Monday, July 23, 2012

Who is Mike M. Johnson and Why is He Important?

Mike M. Johnson was a contractor in Washington State whose name is attached to a lawsuit that continues to have repercussions in the construction industry.

Contractor Documentation of Change Order Requests: In Washington State, in 2003, the State Supreme Court issued a decision in the Mike M. Johnson v. County of Spokane case, in which the court held that the contractor, Mike M. Johnson, was bound to the strict notice and documentation requirements of the contract for change order requests, and that by failing to follow those procedures, they essentially forfeited their right to relief for change order work.

Prejudice Standard: The court ruling has been very controversial with contractors and there have been unsuccessful attempts to have state legislation passed that would institute a prejudice standard for filing of notice and documentation. In other words, if the owner was not prejudiced or damaged by the failure of the contractor to meet the strict time constraints of the contract, the claims could nevertheless be considered.

John Ahlers and Lindsay Taft

Resources: Seattle construction attorneys John P. Ahlers and Lindsay K. Taft have written extensively on the subject, most recently in two issues of the Washington State Bar News.

Part 1: Construction Contract Draconian Notice Provisions - Is Prejudice Still the Issue? (May 2012)

Part 2: Construction Contract Draconian Notice Provisions - Is Prejudice Still the Issue? (July 2012)

Sunday, July 22, 2012

Job Opening: Senior Buyer

Spokane County (WA)

Position: Senior Buyer

Location: Spokane, Washington

Closing Date: Open until filled

Salary: $4,074 to $5,497 per month

Job Summary: The individual in this position will create unique procurement documents and/or methodologies to address special procurement requests. May direct and review the work of buyers and supporting staff for completeness and compliance with Federal, State, and Country procurement laws and regulations. Negotiate contract terms; conduct pre-bid, pre-proposal, and post-award conferences and meetings.

For More Information and to Apply: Click here.

Job Opening: Director, Contracts and Purchasing

Port of Tacoma is still recruiting for this critical management position that will remain open until filled.

Position: Director, Contracts and Purchasing

Location: Tacoma, Washington

Closing Date: Open until filled

Salary: $7,576 to $9,849 per month

Job Summary: This position is responsible for the overall direction of the Port's contracting and purchasing management, including the development and implementation of Port-wide policies and procedures governing contracting and procurement activities, and provides functional direction to employees in those areas. This position advises and monitors Port departments on training and compliance with established contracting policies and procedures.

For More Information and to Apply: Click here.

Job Opening: Procurement Contract Officer

Oregon State University (OSU)

Position: Procurement Contract Officer

Location: Corvallis, Oregon

Closing Date: July 31, 2012

Salary: $55,000 - $65,000 per year

Job Summary: The Procurement Contract Officer will support Procurement and Contract Services as a member of their management team through development, implementation, and ongoing support of University-wide procurement and contract policies and practices. The duties of the Procurement Contract Officer has been assigned the delegated authority to commit Procurement and Contract Services to a course of action by approving new contract methodologies. Reviews requests for procurement and contract services for sufficient legal terms. Identifies contractual issues or potential risk such as compliance, conflict of interest, intellectual property, payment terms, liability, and provides follow through until resolved by respective parties.

For More Information and to Apply: Click here.

Wednesday, July 18, 2012

Free Federal Prevailing Wage Training

2012 Prevailing Wage Conference

When: August 7-9, 2012

Where: Seattle, Washington (additional conferences in Los Angeles, Miami, Chicago, and Houston)

Sponsored by: U.S. Department of Labor (DOL)

Cost: Free

Agenda:

Davis-Bacon Act and McNamara O'Hara Services Contract Act
Process of obtaining wage determinations and adding classifications
Compliance assistance and enforcement processes
Process for appealing wage rates, coverage, and compliance determinations
Labor standards provisions of the American Recovery and Reinvestment Act of 2009
Series of specials sessions on the final day of the conference

To Register: Email your name, title, organization, email address, and telephone number to whdpwc@dol.gov. Space is limited. Upon receipt of this information, DOL will advise you whether there is space available.

Additional Information: Visit DOL's website or call their toll-free information helpline, available from 8:00 a.m. to 5:00 p.m. in your time zone: 1-866-487-9243.

Tuesday, July 17, 2012

Sound Transit Names New Director of Procurement and Contracts

Ted Lucas

Ted Lucas has been appointed as the new Procurement and Contracts Director at Sound Transit in Seattle. Ted is currently the Purchasing Manager for Snohomish County.

Background: Ted is an attorney, having previously served as the Procurement Executive for the Panama Canal Commission; Procurement Director for Miami-Dade County; and Vice President, Strategic Sourcing/Chief Procurement Office for the Jackson Health System in the Miami area.

Starts in August: He begins his new duties at Sound Transit on August 23, 2012. Ted replaces Kunjan Dayal who left the agency in late March for a position at TriMet in Portland, Oregon as their Director of Procurement and Contracts.

Monday, July 16, 2012

How One Agency Managed Tied Low Bids

It doesn't happen very often, but occasionally a public agency will receive tied low bids for a public works construction project. Here's how one agency recently handled the situation on an $85,000 re-roofing project.

Award by chance: After determining that both bidders were responsible bidders, the agency chose to follow the federal regulations on Equal Low Bids (FAR 14.407-6) to make the award decision by "a drawing by lot." The project was not federally funded, but the agency viewed the federal regulations as providing good guidance.

Attendees at the drawing: In attendance at the drawing were three representatives from the agency, one of the low bidders, and other interested bidders who were curious about the process - having never seen a tied low bid before. The other low bidder was unable to attend in person due to a conflict, and so they participated via a telephone connection during the drawing.

The process: The contracting officer wrote the name of each of the two low bidders on a separate sheet of paper, folded and stapled them, and placed both papers in a hat. Another representative of the agency then came into the room, and randomly drew one of the papers from the hat. The name of the winner was then announced. To maintain transparency, the contracting officer took the name of the other bidder out of the hat, opened the folded document, and showed everyone that the name of the loser was, of course, in the hat.

Transparency: Going through a deliberate process as described above takes time, but it helps to reduce the risk of a bid protest. The agency was complimented by all of the attendees for conducting such a fair and transparent process.

Bidding documents: Check the language of your bidding documents to see if they address how your agency will handle a tied bid.

Sunday, July 15, 2012

Job Opening: Senior Design and Construction Contracts Specialist

Sound Transit

Position: Senior Design and Construction Contracts Specialist

Location: Seattle, Washington

Closing Date: Friday, July 20, 2012 at 5:00 p.m.

Salary: Negotiable

Job Summary: Under general direction, performs the full range of senior professional and technical duties involved in the preparation, finalization, analysis, and administration of construction (including alternative public works), architect-engineering and other agreements and contracts. Leads or assists departments and project managers in selection of procurement methods and strategies. Performs specification reviews. Prepares, issues, and awards contracts for Sound Transit in accordance with policies, procedures and in compliance with all applicable state, federal and local regulations and laws. The position is responsible for cradle-to-grave procurement and contract work.

For More Information and to Apply: Click here.

Tuesday, July 10, 2012

How and When to Disclose Bid Results

You've just held a public bid opening for a public works project. Some of the bidders want to see the bid form and bid guaranty for the low bidder, and maybe want a copy too. What should you do?

Transparency: In conducting public bidding, I always think it's best to have as transparent and open of a process as possible.

Options: The following are some of the ways that various public agencies handle disclosure of the bids that have been submitted:

Review after bid opening: Some agencies permit bidders to examine other bids immediately after bid opening. This is a good process that promotes transparency. It is important, however, to carefully control the review of the documents to one bidder at a time, and to keep the documents secure.

Case-by-case requests: Some agencies entertain requests for a copy of the bidding documents on a case-by-case basis, agreeing to send a copy of the documents upon request.

Scan bids: Some agencies make it a practice after bid opening to scan all of the bids and then post them to the agency's website (or an electronic bid distribution service) within a few hours or by the next day. This is a relatively easy process, maintains the security of the bids, and gives timely access to the bids to anyone interested. A variation of this option is to email the scanned bid results to anyone making such a request.

Public records request: Some agencies make it a practice to require a formal public records request before they will release a copy of the bids to anyone. This practice makes it a little harder for bidders and interested parties to obtain a copy of the bids, is a less transparent process, and is more time and process oriented for public agency staff. Generally, the bids are considered to be public records that are be subject to disclosure under applicable requirements.

Bid tabulations: In addition to the actual bids, bidders are interested in the summary bid tabulation of all bids received. If you have a unit price bid, it is important that you check the math for all of the bidders to ensure they have accurately multiplied their proposed unit prices by the estimated quantities, and that they have accurately added up the unit price extensions. Bidding documents should give public agencies the right (and obligation) to make mathematical corrections of any such errors. After all of the bids have been checked for accuracy (errors may change the order of bidders from the numbers read during the bid opening), a public agency may disclose the bid tabulation through any of the options noted above.

Protests: Prompt disclosure of bids submitted is important to bidders in preserving their rights under state or local regulations or the requirements of the bidding documents for how long they have in which to file a bid protest.

Monday, July 9, 2012

Federal Grants Require Compliance with State and Local Laws

Many federal grants to state and local agencies require the recipient to comply with their own state or local laws regarding procurement - in addition to various federal requirements.

Audit finding: In a recent audit finding issued by the Washington State Auditor's Office, they found that the Franklin Pierce School District No. 402 failed to comply with RCW 28A.335.190 regarding bidding procedures.

Formal Bidding: The District is required to advertise for formal bids for anything over $75,000. They awarded a vendor a supply contract for $113,048 without seeking formal bids.

Informal Quotes: The District is required to obtain quotes from at least three sources if the cost of the furniture, equipment, or supplies is from $40,000 up to $75,000. They awarded a vendor supply contract for $45,042 without obtaining at least three quotes.

Tip: Read the terms of your federal grant and make sure you know what procurement and contracting requirements you must comply with.

Sunday, July 8, 2012

Are You Managing Your Government-Issued Credit Cards?

Government-issued credit cards to agency employees are a good tool for streamlining the purchasing process. However, if not managed appropriately, these credit cards can also lead to abuses and audit findings.

Practical Tips: Here's a list of some quick tips for public agencies in managing purchasing cards.

Education: Make sure your employees understand the expectations and restrictions surrounding use of the purchasing card. Provide training. Have employees sign a statement acknowledging the requirements and consequences for improperly using the card.

Limitations on use:

Permitted uses: Be clear what types of expenses are and are not permitted with the card. Employees should understand they may be required to pay for unauthorized or inappropriate uses of the card.

No personal use: Personal use of government issued credit cards, even if the employee pays back the agency, should be prohibited. In Washington State, the Attorney General's Office has written that such use constitutes lending of public credit, in violation of the state's constitution.

Dollar thresholds: Agencies should establish per transaction and per day thresholds for each cardholder that are consistent with that employee's business needs to use the card.

Multiple employees using one card: Some agencies permit multiple employees to use one credit card - a practice I would personally discourage. This can make it more difficult to track which employee purchased which items, and decreases accountability.

Processing: Itemized receipts for purchases should be submitted by employees in a timely manner. Supervisors should be held accountable for carefully reviewing transactions to ensure they are appropriate purchases and that any dollar threshold limitations have not been violated.

Audit Finding: The Washington State Auditor's Office recently issued an audit finding against the LaConner School District No. 311 for unallowable and inadequately documented purchases totaling more than $20,000 with government issued credit cards.

Sunday, July 1, 2012

Happy 4th of July!

In honor of Independence Day and the fact that many of us may be taking well-deserved time off from work this week to celebrate with family and friends, I will resume blog entries next week.

Tuesday, July 31, 2012

Monday, July 30, 2012

Sunday, July 29, 2012

Thursday, July 26, 2012

Wednesday, July 25, 2012

Tuesday, July 24, 2012

Monday, July 23, 2012

Sunday, July 22, 2012

Wednesday, July 18, 2012

Tuesday, July 17, 2012

Monday, July 16, 2012

Sunday, July 15, 2012

Tuesday, July 10, 2012

Monday, July 9, 2012

Sunday, July 8, 2012

Sunday, July 1, 2012

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