Mike Purdy's Public Contracting Blog: February 2013

Wednesday, February 27, 2013

Job Opening: Contract & Procurement Specialist

KCDA Purchasing Cooperative, Kent, Washington

Position: Contract & Procurement Specialist

Location: Kent, Washington

Closing Date: Open until filled

Salary: $3,750 per month

Job Summary: This position is responsible for public procurement and supply management functions in accordance with state laws and regulations. Develops bid documents and conducts open competitive bidding process. Evaluates and recommends bid awards. Position requires ongoing contract administration. May be assigned special projects and is expected to be an active team member. Requires professional best practices in inventory control to keep KCDA warehouse stocked with supplies/equipment. Places direct ship orders for timely delivery to KCDA customers.

For More Information and to Apply: Click here.

Prevailing Wage Data Collection Report Issued

The Washington State Department of Labor and Industries has issued a report for the Capital Projects Advisory Review Board (CPARB) on the implementation of RCW 39.04.370 (EHB 2805), which requires additional reporting by contractors on Affidavits of Wages Paid related to use of prefabricated project specific items produced out-of-state on public works projects estimated to cost over $1 million.

Limited out-of-state prefabrication: Between September 1, 2010 and July 31, 2012, the Department of Labor and Industries reported that there were only 13 firms who answered "yes" to all four relevant questions on the Affidavit of Wages Paid form. The reporting requirements are in effect until December 31, 2013.

L&I's four part question: Here is the four-part threshold question:

Tuesday, February 26, 2013

Job Opening: Assistant Contract Administrator

Port of Olympia, Washington

Position: Assistant Contract Administrator

Location: Olympia, Washington

Closing Date: Monday, March 11, 2013 (5:00 p.m.)

Salary: $39,102 to $58,654 per year

Job Summary: This is a temporary project position through December 2014 that assists in the development, execution, and management of Port contracts. The position provides contract and administrative support to the Engineering and Environmental Divisions. The position also serves as a resource to all Port of Olympia staff and others to ensure contract and project management activities comply with Port policy and procedures.

For More Information and to Apply: Click here.

Project Manager Position Also Available: The Port of Olympia is also recruiting for a Project Manager for a temporary project position (through December 2014). Click here for details.

Job Order Contracting Webinar

Job Order Contracting Webinar

When: Tuesday, March 12, 2013 (2:00 p.m. to 3:00 p.m. - Eastern Time)

Where: Your office and computer

Cost:

$99 for AGC members
$129 for Non AGC members

Content:

Compare Job Order Contracting (JOC) to other well-known delivery methods
Describe the pricing structure of JOC, identify strategies for developing a coefficient, and understand the basics of line item estimating
Discuss the JOC delivery order process, including scoping, proposal preparation, and execution
Identify current JOC market opportunities and dynamics, including market segments, contract structure, unit price books, consultants, etc.
Determine skillsets and culture to be a successful JOC contractor.

Lisa Cooley

Instructors:

Lisa Cooley, Founder, Lisa Cooley Associates

Perfecto Solis, Vice-President of Airport Development and Engineering, DFW Airport

Leo Wright, Vice-President of Job Order Contracting Division, F.H. Paschen

Sponsored by: Associated General Contractors of America (AGC)

Information and registration: Click here.

Monday, February 25, 2013

Calculating and Assessing Liquidated Damages

Most public works contracts include a provision giving the public agency the right to assess liquidated damages against the contractor, usually a fixed dollar amount for each day the contractor fails to complete the work by the agreed upon date for substantial completion.

Why include Liquidated Damages? Liquidated damages is a tool that public agencies may use to help ensure that the contractor performs the work consistent with the schedule in the contract documents. Liquidated damages are intended to fairly compensate a public agency for costs that may be incurred by the contractor's failure to complete the work in a timely manner.

Establishing the Liquidated Damage amount: It is not normally possible to determine ahead of time what the actual costs may be for a public agency in the event of the contractor's delay in completing the project. In establishing the amount of liquidated damages to include in the bidding documents and contract, public agencies should go through a process to estimate what their costs might be. In other words, there should be some rational basis for the amount of liquidated damages. Some common factors that often go into establishing the liquidated damage amount include the following:

Temporary facility costs for the public agency if the project is not completed on time
Administrative staff costs of managing the project for a longer period of time
Additional fees paid to the designer (architect/engineer) or a third party construction manager required to provide services for a longer period of time
Revenue loss for the public agency if the facility is not completed in a timely manner
Temporary systems and security for the project (e.g. fire watch)
Agency costs for additional storage time for furniture or equipment
Regulatory financial sanctions against the public agency for failure to meet a deadline

Can Liquidated Damages be too high? Yes, liquidated damages, even when calculated based on likely costs, may be too high. In establishing the per day amount for liquidated damages based on potential costs, public agencies should evaluate the reasonableness of the amount, and the potential risks of an amount that is too high. Factors to consider in establishing the liquidated damage amount include the following:

Don't discourage bidding: Not so high that it either discourages bidders from bidding the project.

Don't risk higher bids: Not so high that it encourages bidders to submit higher bid prices to mitigate their perceived risk in being potentially assessed the liquidated damage amount.

Incentive for timely performance: Should be a sufficient amount so that it serves as an incentive for the contractor to complete the work on time.

When does "substantial completion" occur? Liquidated damages may be assessed up to the required substantial completion date. Substantial completion occurs when the public agency has beneficial use and occupancy of the facility for its intended purpose. Not all of the punch list work must be completed, but the owner must be able to actually use the facility.

Assessing liquidated damages: Many public agencies are hesitant to actually assess liquidated damages against a contractor even if the contractor is late in completing the work. The reasons for a delay in completion must be documented in order to make a case to assess liquidated damages. To the extent that any of the delays are not the fault of the contractor, the public agency should grant an extension of time. All completion past the required date of substantial completion should be accounted for either through the use of liquidated damages, and/or granting an extension of time.

Practical tips:

Worksheet: Develop a worksheet to help you calculate liquidated damages to include on each project.

Fair Liquidated Damage amount: Conduct a risk analysis for each project to make sure the liquidated damage amount is neither too high nor too low.

Keep records: Maintain careful records during construction to document contractor delays.

Assess damages and/or grant days: Account for all of the late completion days after the required substantial completion date by either assessing liquidated damages, and/or granting an extension of time for some or all of the days.

Sunday, February 24, 2013

Obtaining Qualified Consultants

How do public agencies find and obtain qualified consultants and service providers for their work?

3 tools: There are a number of different tools available to help agencies with obtaining qualified consultants:

Advertise: Public agencies generally rely upon advertising RFPs or RFQs in the local newspaper to solicit interest from the consultant community.

Rosters: Sometimes, consultants are selected from rosters that have been previously advertised to develop a list of qualified consultants.

Outreach events: Some agencies are becoming more proactive in developing interest from the consultant community by hosting business opportunity outreach events. At these events, a public agency shares about upcoming projects, the agency's processes and values, and often provides free training seminars. These events are also a good opportunity for consultants to connect with smaller businesses who may be potential sub-consultants on upcoming projects.

Seattle Public Utilities event: Seattle Public Utilities (SPU) has scheduled a Business Opportunities Workshop that will provide information about upcoming projects and contract opportunities for consultants. Businesses will also have the opportunity to network with SPU staff and other consultants.

When: Tuesday, February 26, 2013 (9:30 a.m. to 12:30 p.m.)

Where: Seattle City Hall (Bertha Knight Landes Room)

Registration: Advanced registration is required. Click here to register.

Questions: Contact Vicky Schiantarelli at Vicky.Schiantarello@Seattle.gov for more information.

Regional Contracting Forum: The 11th annual Regional Contracting Forum will bring together representatives from cities, counties, port districts, state and federal agencies around the Puget Sound area so contractors, consultants, and suppliers can network and meet government contracting representatives. The event is structured as a "reverse trade show" and is designed to provide businesses with direct access to regional contracting representatives in a semi-structured setting. Representatives from local, state, and county jurisdictions will staff exhibit booths and will be available to speak one-on-one with event attendees. Throughout the day, there will be a variety of workshop presentations, panel discussions, and one-on-one networking sessions.

When: Tuesday, April 2, 2013 (8:00 a.m. to 3:30 p.m.)

Where: Downtown Seattle (Washington State Trade and Convention Center)

Cost: Free

Information and Registration: Click here.

Thursday, February 21, 2013

NY Audit Criticizes Fire District's Consultant Selection Practices

The New York State Comptroller's Office issued an audit report criticizing the Jericho Fire District for failing to select professional services based on a competitive process.

No RFP process used: The fire district argued that "the board reviewed and pricing and qualifications of the professional service providers and was confident that it was paying a fair amount for the services obtained." The board also suggested that using a Request for Proposals process does not ensure that qualified firms will be obtained, and that they rely more on interviews and reference checks.

Article: Click here for an article on the audit from the Long Island Newsday website.

Best practices: Many public agencies debate the issue about how consultants should be selected. Here are a couple of best practices and principles that can help guide consultant selection practices.

Do not use price as an evaluation criterion when prohibited: Many states have laws that prohibit the use of price as an evaluation criterion for the selection of architects, engineers, and similar professional services. In Washington state, four disciplines are covered by this qualifications based selection process: architects, engineers, landscape architects, and land surveyors. It is described in RCW 39.80. In addition, federally funded projects are subject to the federal Brooks Act that prohibits use of price in the selection process for a fairly expansive list of disciplines.

Use price as a selection criterion when permitted: When not prohibited, price should be part of the evaluation criteria for selecting consultant services. It helps ensure that public agencies are receiving competitive prices. Agencies must assess how much weight price should play in the evaluation process. For a scope of work that is not clearly defined and that relies heavily on the expertise and judgment of the consultant, price should be a lower percentage of the evaluation points. However, when services to be provided are more routine, well-defined, and less subject to the judgment and expertise of the firm hired, price should be a higher percentage of the evaluation points.

Transparency: Without an RFP process, public agencies are subject to criticism that contracts are being awarded based on friendships, relationships, and even financial kickbacks from firms. It is important for public agencies to be aware of public perception of their processes (or lack of processes).

Have written selection policies: Each public agency should have procurement policies, based on any applicable state laws or regulations that define what dollar threshold contracts must be subject to an RFP process versus those smaller contract amounts that may be selected on a more informal basis.

Pay based on contract terms: Public agencies should monitor performance in accordance with the contract terms. In addition, public agencies should carefully review invoices to ensure that payment is based on the terms of the written contract. In the case of the New York state fire district noted above, one contract was set at an hourly rate of $40, bu8t the district made payments at $50, without any written amendment to the contract.

Wednesday, February 20, 2013

The Key to Successful Public Procurement - in One Word

Eileen Youens

Texas based attorney and public procurement expert Eileen Youens, has written an entertaining and insightful blog on The Key to Successful Public Procurement - in One Word.

4 key steps in procurement: She suggests that the one word is "consistency," and she outlines four key steps in any procurement:

Determine needs
Draft solicitation
Evaluate and award
Monitor contract performance

Read the blog: Click here to read Eileen's blog posting from February 8, 2013.

Tuesday, February 19, 2013

Massachusetts Court Affirms Agency Right to Determine Bidder Responsibility

The Massachusetts Supreme Judicial Court has affirmed that public agencies have a right to conduct an investigation into whether the low bidder on a public works construction project is a responsible bidder.

Negative reference checks lead to not-responsible decision: The Town of Holliston checked the references of the low bidder on a new police station project. They received several negative reference checks and concluded that the low bidder (Barr) was not a responsible bidder. Barr sued the town, arguing that the town had gone beyond just checking the standard state certification files for contractors, and that such action was not authorized.

Massachusetts definition of responsibility: Massachusetts state law notes that a bidder is responsible if they possess "the skill, ability and integrity necessary to faithfully perform the work called for by the particular contract, based upon a determination of competent workmanship and financial soundness."

Court ruling: The court ruled that it is up to each agency to make a determination of responsibility, and that a disappointed bidder always has the right to challenge a decision of not responsible in court. Click here for a summary of the court case.

Washington State bidder responsibility: In Washington State, RCW 39.04.350 governs bidder responsibility. There are a half-dozen or so mandatory bidder responsibility criteria that must be met and documented by all public agencies in the state before awarding any public works contract. In addition, public agencies have the option of developing and including in the bidding documents "supplemental bidder responsibility criteria." It is a fine art to write appropriate supplemental criteria that are clear, fair, and that meet the agency's objectives of ensuring that the low bidder is qualified to perform the work.

Thursday, February 14, 2013

Training: Contract Specification Writing

Contract Specification Writing

When and Where: 8:00 a.m. to 5:00 p.m. on days noted below.

March 7, 2013 (Tumwater)
March 21, 2013 (Shoreline)

Sponsored by: WSDOT, Highways and Local Programs, Local Technical Assistance Program (LTAP)

Instructor: Steve Boesel, retired WSDOT employee and currently a consultant

Class description: The class will provide guidance and methods for writing consistently clear, concise, complete and well formatted contract special provisions. It will provide a thought process that can be used when writing or reviewing contract specifications to ensure the greatest possibility for a successful bid and a successful construction project.

Cost: $75

Class size: Limited to 30 students at each location.

Information and registration: Click here.

Wednesday, February 13, 2013

Keep or Deposit Bid Guaranties?

Public works projects generally require a bid guaranty be submitted by bidders to prevent frivolous bids and as an indication that the bidder is serious about its bid amount.

Deposit bid guaranty within 24 hours: If a public agency receives a bid guaranty in the form of a cashier's check, certified check, cash, or money order, Washington state law requires that the money be deposited within 24 hours of receipt, instead of keeping the bid guaranty and returning it to the bidder after a contract has been executed.

State law: RCW 43.09.240 states the following:

Review your practice: Check with your attorney and finance officials to ensure that your agency's practices on depositing bid guaranties are consistent with state law.

Tuesday, February 12, 2013

City Votes Not to Contract Out Public Works Operations

The City of Washougal, Washington decided on January 7, 2013 to not pursue contracting out the operations and maintenance of its water, wastewater, and storm water utilities to a private company.

Not enough savings: After an analysis of potential savings that would accrue through such an action, members of the City Council voted that the savings were not sufficient to justify contracting out these functions, and loose the experience of the 29 employees in the Washougal public works department. The City would have also incurred additional expenses in developing and conducting a Request for Proposals process to find an operator for their public works operations.

More information: Click here for more information from an article from the Camas-Washougal Post-Record.

Monday, February 11, 2013

Free Training on Job Order Contracting

What is Job Order Contracting?

Indefinite quantity delivery order contract: Job order contract" means a contract in which the contractor agrees to a fixed period, indefinite quantity delivery order contract which provides for the use of negotiated, definitive work orders for public works as defined in RCW 39.04.010.

Alternative public works: Job Order Contracting (JOC) is one of three alternative public works contracting methods authorized by state law (RCW 39.10).

What agencies may use it? Only specific public agencies or types of agencies listed in RCW 39.10.420 are authorized to use JOC.

When: February 27, 2013 (Noon to 1:30 p.m.)

Where: Bellevue City Hall (Council Chambers, 450 110th Ave NE)

Agenda and Speakers:

JOC and Prevailing Wages (Bea Hart, Department of Labor and Industries)

An Auditor's Viewpoint on Implementing and Maintaining a JOC Program (Chris Cortines, State Auditor's Office)

Cost: Free

Sponsored by: Job Order Contracting Users Group

Registration required: E-mail Mayvis Schwab at MSchwab@bellevuewa.gov.

Sunday, February 10, 2013

What the State Auditor is Looking For...and Findings

The Municipal Research and Services Center (MRSC) has published a helpful blog posting analyzing audit findings against cities by the Washington State Auditor's Office from 2010 to 2012.

In the January 17, 2013 blog posting, MRSC Executive Director Tracy Burrows notes there were 225 audit findings for cities in the following categories, and includes a discussion of each item.

In future blog postings, MRSC will analyze audit findings for counties and special districts.

Wednesday, February 6, 2013

Louisiana Agency Fails to Revise Consultant Selection Practices

In November 2012, I spoke at a civic forum in New Orleans on best practices related to consultant selection practices.

Independent report urges taking politics out of selection process: The independent Bureau of Governmental Research, which sponsored the event, produced a report and recommendations in May 2012 that Jefferson Parish (like a county) should make changes to their consultant selection practices in order to make selection less subject to political influences of Parish councilmembers. Click here to read my December 2, 2012 blog posting on my speech there and some of the issues relating to consultant selection.

No action by Council: The Parish President, John Young has made recommendations for changes, but so far no councilmembers have introduced or considered legislation.

Issues: Issues at stake include the following:

Should top rated firm be selected? The Parish Council currently makes consultant selections, often ignoring the ratings based on established evaluation criteria and weightings. Some councilmembers appear to support limiting council discretion in selection to only the top three to five rated firms, while others maintain that only the top rated firm should be selected. The best practice among public agencies is that the top rated firm should be selected.

Should price be an evaluation criterion? Price is not included as an evaluation criterion for non-architectural, engineering, and landscape architectural services. Parish President Young has proposed that price be a factor in the evaluation process. The best practice is that price should be an evaluation criterion. The weighting of the price component in the evaluation process is dependent on the nature of the work and how much it leans toward discretionary consulting services versus more routine services. The more clearly defined the work, the higher the percentage that should be applied to price, since it is more like a bid.

How should conflicts of interest be handled? Parish Council Chairman Chris Roberts is apparently developing a conflict of interest form that members of the evaluation committees would be required to complete to ensure no conflicts with those firms they would be reviewing. Best practice has always been that members of evaluation committees should fill out conflict of interest statements. Jefferson Parish is unusual in that the same individuals serve on committees for all selections, a situation ripe for potential abuse.

Citizen concerns: The Citizens for Good Government, a citizen watchdog organization expressed disappointment in the lack of action by the Parish Council. Margie Seeman stated that "We're disappointed that no ordinance in this matter appeared on the agenda."

More information: Click here to read an article from The Times-Picayune.

Tuesday, February 5, 2013

New Prevailing Wage Rates Published

The Washington State Department of Labor and Industries published updated prevailing wages on February 1, 2013. According to WAC 296-127-011, the new prevailing wages will become effective 30 days later, or on March 3, 2013.

Effective Date for Projects: For any public works project with a bid submittal deadline of March 3, 2013 (a Sunday) or later, the new wage rates will be in effect. For projects advertised prior to March 3, 2013, but which have a bid submittal date of March 3, 2013 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 submittal deadline of March 2, 2013 (a Saturday) or earlier are governed by the current prevailing wage rates dated August 31, 2012.

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 3, 2013, 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.

Monday, February 4, 2013

Former New Orleans Mayor Indicted Contract Bribery Scandal

Former New Orleans
Mayor Ray Nagin

Former New Orleans Mayor Ray Nagin was indicted on 21 counts on January 18, 2013, charging that he accepted more than $200,000 in bribes from city contractors in exchange for helping them get city contracts.

More information:

Click here to read the Associated Press article on the subject.

Click here to read the actual indictment

Ethical standards: Here are some practical tips for public agencies in addressing ethical issues related to contracting:

Clear laws and policies: Contracting regulations exist to ensure equity for businesses seeking government work, and to ensure the taxpayers' dollars are spent wisely. It is important that public agencies have clear laws and policies in place relating to procurement and contracting.

Code of ethics: Public agencies should have a code of ethics that addresses the responsibilities and expectations of public employees, elected officials, and contractors. A code of ethics exists in order to help ensure there are no conflicts of interest or inappropriate behavior.

Regular training: Even with the best of procurement policies and a code of ethics, those affected by them must be trained on a regular basis. Training can help people think through "what if" situations in the presence of colleagues.

Create culture of ethics: Implementation of high ethical standards begins with the leadership of any organization, whether elected officials or key management positions. These individuals have a responsibility to model high ethical standards and to help create a culture of ethics, instead of a culture of corruption.

Checks and balances: Internal procedures within a public agency should ensure there are sufficient checks and balances in place to help prevent abusive situations.

Sunday, February 3, 2013

Legislation Introduced to Extend Alternative Public Works Contracting Methods

Legislation was introduced into the Washington State Legislature last week that would extend the use of GC/CM (General Contractor/Construction Manager), Design-Build, and Job Order Contracting for eight additional years beyond the June 2013 expiration date.

CPARB leadership: The companion House Bill 1466 and Senate Bill 5349 were the result of months of work by the Reauthorization Committee of the Capital Projects Advisory Review Board (CPARB).

Nature of changes: The changes proposed have broad consensus support by various industry stakeholders, and are generally clarifications and clean-up of the law. For a summary of some of the key changes, click here.

JLARC report: The state's Joint Legislative Audit and Review Committee (JLARC) had been scheduled to meet on January 23, 2013 to consider and approve a proposed December 5, 2012 final report from staff, but the meeting was cancelled. JLARC's review is part of the legislative process for reauthorizing RCW 39.10.

Hearing Scheduled: A hearing has been scheduled on SB 5349 before the Senate Government Operations Committee for Monday, February 4, 2013 at 10:00 a.m.

Job Opening: Purchasing & Contracts Coordinator

Whatcom Transportation Authority (WTA)

Position: Purchasing & Contracts Coordinator

Location: Bellingham, Washington

Closing Date: Tuesday, February 19, 2013 at 4:00 p.m., Pacific Time

Salary: $4,344 to $5,822 per month

Job Summary: Manages WTA procurement and contracts processes. Ensures procurements and contracts comply with federal and state rules while maximizing value to WTA. Ensures federally funded procurements comply with grant requirements.

For More Information and to Apply: Click here.

Wednesday, February 27, 2013

Tuesday, February 26, 2013

Monday, February 25, 2013

Sunday, February 24, 2013

Thursday, February 21, 2013

Wednesday, February 20, 2013

Tuesday, February 19, 2013

Thursday, February 14, 2013

Wednesday, February 13, 2013

Tuesday, February 12, 2013

Monday, February 11, 2013

Sunday, February 10, 2013

Wednesday, February 6, 2013

Tuesday, February 5, 2013

Monday, February 4, 2013

Sunday, February 3, 2013

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