Mike Purdy's Public Contracting Blog: March 2013

Sunday, March 31, 2013

When Was the Last Time You Read a Bid Bond?

Not all bid bonds are created equal.

How much will the bonding company pay? Most bid bonds have language noting that the surety will pay what is called a "penal sum," which is either expressed as a percentage of the bid amount, and/or with a not-to-exceed dollar amount. If it has a not-to-exceed dollar amount, a public agency should calculate after bid opening whether the not-to-exceed amount meets the required percentage for the bid guaranty, typically 5%. Here's some typical language from a bid bond regarding the dollar amount:

When is a 5% Bid Bond not worth 5%? Other bid bonds have similar language describing the penal sum, but limit the amount the surety will pay up to a maximum of 5% (or whatever percentage your agency requires), but not to exceed the difference in bid prices between the bidder covered by the Bid Bond and the bidder ultimately awarded the project. Here's language from a Bid Bond describing when the surety will pay:

Read the bid bond: If there is a requirement for a 5% (or other percentage) bid guaranty, public agencies should carefully read the language of Bid Bonds after bid opening to ensure that the bid guaranty amount is not limited and is really a full 5% Bid Bond

Adopt standard agency Bid Bond form: One way to manage Bid Bonds is for public agencies to develop and adopt their own Bid Bond form and require it to be used by bidders. This will ensure that the agency is protected to the full extent required.

When may an agency collect on a Bid Bond? A public agency may collect on a Bid Bond (or other form of bid guaranty) only if the bidder has been awarded the project and refuses to execute the contract.

Thursday, March 28, 2013

Job Opening: Contracts Specialist 2

University of Oregon

Position: Contracts Specialist 2

Location: Eugene, Oregon

Closing Date: April 15, 2013

Salary: $21.19 to $32.50 per hour

Job Summary: This position will manage a wide variety of transactions and provide advanced administrative and technical support to the contracting functions within the Purchasing & Contracting Services Department, and to faculty and staff across campus by interpreting contracting policies, regulations, and laws.

For More Information and to Apply: Click here.

Wednesday, March 27, 2013

Design-Build Certification Workshop

In 2012, six projects were given approval by Washington State's Project Review Committee to use Design-Build as the project delivery method. That represents a significant increase from the two projects that were approved in 2011. As more public agencies turn to alternative public works contracting methods (Design-Build and GC/CM) for larger projects, it is important that public agencies and the contracting community be knowledgeable about this tool. In Washington State, the Design-Build law for public agencies is described in RCW 39.10.

Training: DBIA (Design-Build Institute of America) is sponsoring a week long workshop on Design-Build. It is part of the process for obtaining certification by DBIA.

When: April 29, 2013 to May 3, 2013 (7:15 a.m. to 5:00 p.m.)

Where: Portland, Oregon (111 SW 5th Avenue)

Agenda by day:

Fundamentals of Project Delivery
Principles of Design-Build Project Delivery
Design-Build Contracts & Risk Management
Post Award Design-Build
Certification Exam Prep

Cost:

$2,150 for DBIA members
$2,750 for non DBIA members

Information and registration: Click here.

Monday, March 25, 2013

Monitoring Prevailing Wages on Federally Funded Projects

Federal funding for public works construction projects brings with it requirements for monitoring to ensure that the contractor and all subcontractors are paying their workers at least the prevailing wage rate applicable for the type of work performed.

Audit finding: Unfortunately, it's fairly common that public agencies receiving federal funding are not aware of these requirements. The Washington State Auditor's Office recently issued audit findings against the Oroville Housing Authority in Okanogan County, Washington for failure to obtain and review weekly certified payrolls from the contractor and all subcontractors. According to the audit, "the Housing Authority spent $2,371,300 in grant funding in 2011, approximately 76 percent of which was paid to the contractor."

What should be reviewed? Public agency staff should be trained in the complexities of federal prevailing wages and what should be monitored. Here's a quick list of some of the things that should be reviewed as part of the process of monitoring payment of prevailing wages.

Frequency: Are you collecting payroll reports weekly from the contractor and all subcontractors?

Subcontractors: Do you have a system for determining what subcontractors are working on site?

Reviewing payrolls: Are you reviewing the certified payroll reports on a weekly basis to ensure that prevailing wages are being paid to the workers? As part of your review, are you evaluating the following: a) whether the classifications reported are appropriate, b) the hourly wage rate is at least the prevailing wage rate, c) the proper overtime rates are being paid, d) apprentices are registered apprentices who may be paid less than the journey-level wage, e) the payroll report is signed by an authorized individual?

Documenting your review: Are you documenting your review of the payrolls by marking the payroll reports?

Weekly pay: Are you monitoring to ensure that the contractor and their subcontractors paying their workers on a weekly basis? This is required by the federal Davis-Bacon Act.

Worker interviews: Are you interviewing a representative sample of workers on-site, asking them questions about what work they are performing and how much they are being paid? Are you correlating this information with what is reported on weekly payroll reports?

Invoices: Do you have a process that ties in your approval of a contractor's monthly pay application and invoice with your review and approval of the weekly payroll reports?

Developing and Managing RFPs and RFQs

I spoke last week at the Washington Municipal Clerks Association (WMCA) conference on Developing and Managing RFPs and RFQs. Here's an outline of the 1.5 hour session (a very fast-paced overview), which I also teach as a full day class:

Planning the Procurement

When to Use an RFP, RFQ, or ITB
Qualifications Based Selection (QBS)
Solicitation Documents
Solicitation Method
Scope of Work
Evaluation Criteria

Conflicts of Interest

May the designer also bid as a contractor?

Standard RFP/RFQ Provisions

Schedule
Submittal Requirements
Conversations Before Advertising
Questions and Changes - Addenda
Federal Provisions

Evaluation Process

Evaluation Committee Membership
Orientation Meeting for Evaluation Committee
Provide Documents to Evaluation Committee
Ethical Issues
Review and Scoring of Proposals
Interviews
Sample Interview Evaluation Criteria
Attendance at Interviews

Contract Negotiations

Scope of Work
Hours
Staff Allocation
Fully Loaded Hourly Rates
Markup Percentages
Overhead

Contact me: If you're interested in talking about me providing this training to your agency or association, please contact me.

Sunday, March 24, 2013

Job Opening: Buyer

City of Seattle

Position: Buyer

Location: Seattle, Washington

Closing Date: Tuesday, April 2, 2013 at 4:00 p.m. Pacific Time

Salary: $31.16 to $36.30 per hour

Job Summary: This position is one of eight buyers who provide centralized purchasing for the City of Seattle and reports to the Purchasing Manager. The Buyer is assigned a contract portfolio, with a group of related commodities and contracts, many of which require extensive ongoing contract administration. The Buyer may also be assigned to lead special projects, which may include policy research, WMBE programs, or environmental initiatives or other social responsibility initiatives of the City.

For More Information and to Apply: Click here.

Wednesday, March 20, 2013

Job Opening: Sr. Contract Administrator

Port of Seattle

Position: Sr. Contract Administrator

Location: Seattle, Washington (Port Headquarters, Pier 69)

Closing Date: Monday, April 15, 2013 (midnight - Pacific Time)

Salary: Minimum $66,359 - Midpoint $82,953

Job Summary: Manage the procurement contract process for routine Service Agreements from inception to closing.

For More Information and to Apply: Click here.

Tuesday, March 19, 2013

Flawed Retainage Bill Passes Washington State House of Representatives

Substitute House Bill 1420, which has unanimously passed the Washington State House of Representatives, has some good provisions to it as well as some errors and problematic provisions in it. It is scheduled for a hearing before the Senate Committee on Transportation on Thursday, March 21, 2013 at 3:30 p.m.

No retainage on federal transportation funded projects: The main purpose of the bill appears to be to fix previous legislation that provided that public works projects funded by federal transportation funds for "construction, alteration, repair, or improvement of any highway, road, or street," could not withhold retainage, but should rely on the protection of the contractor's payment bond. This legislation was adopted to comply with federal U.S. DOT requirements. The problem with the current law is that it does not also apply to other U.S. DOT funded projects that are not for "construction, alteration, repair, or improvement of any highway, road, or street." SHB 1420 fixes this issue.

Affidavit of wages paid prior to acceptance: For federally funded transportation projects for which no retainage is withheld (see above), the Affidavit of Wages Paid would need to be submitted by the contractor to the public agency prior to final acceptance. This could end up delaying final acceptance for an indefinite period of time.

Improper global search and replace: SHB 1420 also makes numerous changes from "shall" to "must," and most of these are appropriate. However, on page 5, line 33, "shall" is changed to "must," when it should have remained at "shall," as noted in the first change of "shall" to "must" below:

Withholding 50% retainage in lieu of a bond: RCW 39.08.010 provides that for public works contracts of $35,000 or less, the payment and performance bond may not be required if the contractor requests that the agency "retain fifty percent of the contract amount for a period of thirty days after date of final acceptance, or until receipt of all necessary releases" from the three state agencies.

Change 30 to 45 days: The reference on Page 6, Line 26 of SHB 1420 should be changed from 30 days to 45 days. Otherwise, it puts an agency at risk for releasing the retainage prior to the end of the claim filing period, which is 45 days after final acceptance. This has been an historical problem with this provision, and since the law is being amended, now is the time to fix this.

Delete requirement for releases from state agencies: The references on Page 6, Lines 27-30 to releases from the departments of Revenue, Employment Security, and Labor and Industries should be deleted. According to RCW 60.28.051, for contracts less than $35,000, the three state departments listed do not provide releases. In fact, if a public agency sends a release request to these state departments for a project less than $35,000, the state departments send back a letter noting that they do not provide releases for these smaller projects, per the state law. Sections 3 and 4 of the bill appear to amend the same section of the RCW and corresponding changes should be made there also.

Monday, March 18, 2013

Training: Effective Contract Writing

Effective Contract Writing

When: April 17 - 18, 2013 (8:00 a.m. to 5:00 p.m.)

Where: Everett, Washington (Everett Performing Arts Center)

Sponsored by: NIGP (National Institute of Governmental Purchasing)

Instructor: Michael J. Kolodisner, CPPO

Agenda:

Basic contracting principles
Contract organization
Nuts and bolts of writing
Specific contract provisions
Special topics
Specific contract provisions
Strategies to practice and improve

Information and registration: Click here.

Sunday, March 17, 2013

Training: "When Bad Things Happen to Bids"

I was in Milwaukee, Wisconsin last Thursday providing public works training at the Spring Conference of the W isconsin Association for Public Procurement (WAPP), an NIGP chapter. The conference was held in conjunction with V.A.L.U.E., a cooperative purchasing program in southeastern Wisconsin.

Mike Purdy and Jesse Jackson
at Chicago's O'Hare Airport

Surprise in Chicago: On a layover at Chicago's O'Hare Airport on Wednesday on my way to Milwaukee, I ran into Jesse Jackson who was there catching a flight also. He very graciously agreed to pause for a picture with me. It was an amazing experience - something totally unexpected!

Developing Public Works Bid Documents: In Milwaukee, I did an hour long training session on "Best Practices in Developing Public Works Bid Documents." Here's a high level outline of my presentation:

Principals of Preparation

Formats and Structures

Components of Bid Documents

Review of Individual Projects

Document Control

Long Term Review

Training

When Bad Things Happen to Bids: In the afternoon, I provided 3.5 hours of training on "When Bad Things Happen to Bids: Strategies for Ensuring a Successful Public Works Project." Here's an outline of the interactive presentation:

Why Aren't Bidders More Careful?
Why do Bidders Make Mistakes?
Missing Bid Prices
Conflict Between Numbers and Words
Bid Calculation Errors
Claims of Error

Is Your Bidder Playing Games?
Bid is Too Low
Unbalanced Bids
Conditioned or Qualified Bids

Will the Real Low Bidder Please Stand Up?
Additive and Alternate Bids
Tie Bids
Responsive Bids
Responsible Bidders
Local Bid Preferences
Bid Protests and Appeals

What Can You Do to Manage Bidding?
What Should be on the Bid Form?
On What Days Should You Not Receive Bids?
When is a Bid Late?
When Should You Take a Bid Guaranty?

Interested in this training? If you are interested in me providing this training for your agency, NIGP chapter, or other professional association, please contact me.

Wednesday, March 13, 2013

New Prevailing Wages Effective March 3, 2013; Corrections Issued

As a reminder, the Washington State Department of Labor and Industries has published updated prevailing wages that became effective on March 3, 2013.

Is an addendum needed? For projects advertised prior to March 3, 2013, but which have a bid submittal date after March 3, 2013, public agencies should issue an addendum with the revised prevailing wage rates. To look up the new wage rates, visit Labor and Industries' 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 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.

Corrections made by L&I: In addition to the new wages effective on March 3, 2013, L&I published corrected prevailing wage rates on March 6, 2013 that will become effective on April 5, 2013 for the following classifications in a number of counties:

Construction Site Surveyors
Dredge Workers
Power Equipment Operators
Power Equipment Operators - Underground Sewer & Water

Prevailing Wage Training

Prevailing Wage Law

When: April 19, 2013 (8:00 a.m. to 4:30 p.m.)

Where: Renton, Washington (Holiday Inn Seattle, One South Grady Way)

Sponsored by: Lorman Education Services

Cost: $359

Agenda and Instructors:

Washington State Prevailing Wage on Public Works Act (David J. Soma)

When Does Prevailing Wage Apply (Leigh Ann Tift)

Plaintiffs' Perspective on Prevailing Wage Claims (Marc Cote)

Employer Compliance Issues and Best Defense Strategies (Judd H. Lees)

Davis-Bacon Act (Andre Penalver)

Project Labor Agreements (Frank L. Van Dusen)

Bid and Contract Documents Regarding Prevailing Wages (William A. Linton)

Information and registration: Click here.

Tuesday, March 12, 2013

Webinar: 10 Common Project Owner Mistakes in Resolving Change Orders and Claims

Webinar: 10 Common Project Owner Mistakes in Resolving Change Orders and Claims - Improving Construction Administration Practices

When: Thursday, March 28, 2013 (12:00 p.m. to 1:00 p.m. - Pacific Time)

Where: Your computer

Agenda:

Failure to reserve owner rights during negotiation
Pricing change orders with contractor reservation of rights
Use of designer intent in interpreting contract
Inadequate inspection records to support claim defense
Use of force account mark-ups and other topics

Ron Leaders

Cost: $25 per connection with unlimited number of participants. Free to WCIA members.

Instructor: Ron Leaders, Senior Consultant with Contract Solutions Group

Co-Sponsored by: WCIA (Washington Cities Insurance Authority) and Contract Solutions Group

Registration deadline: March 25, 2013

Information and registration: Click here.

Excellence in Procurement Summit

Excellence in Procurement Summit

When: March 21, 2013 (8:30 a.m. to 3:30 p.m.)

Where: Bellevue, Washington (Bellevue City Hall)

Agenda:

Washington State NIGP Chapter Business Meeting and Strategic Planning

Understanding the Language of Performance Measures

7 Wastes Presentation

Sponsored by: Washington State Chapter of NIGP (National Institute of Governmental Purchasing)

Cost:

No charge for Washington State NIGP Chapter Members
$40 for Non Washington State NIGP Chapter Members

Information and registration: Click here.

Monday, March 11, 2013

Washington Adopts Policy on Calculating Hourly Rate for Fringe Benefits

The Washington State Department of Labor and Industries issued a policy statement on February 28, 2013 offering guidance on how fringe benefit contributions, as part of prevailing wages paid to construction workers on public works projects, should be calculated and turned into an hourly wage rate.

Affects contractors and agencies: The policy is important for both contractors who must ensure they are in compliance with prevailing wage requirements, and public agencies responsible for monitoring prevailing wage requirements, especially on federally funded public works projects.

Summary of new policy: The new policy defines fringe benefits, and notes that the hourly amount of fringe benefit contributions should generally be apportioned based on the actual hours worked over a one year period. Here's a quote from the summary of the policy:

Read the policy: Click here to read the new five page policy

Sunday, March 10, 2013

Seattle Investigates Prevailing Wage Underpayments

The City of Seattle has launched an investigation into prevailing wage underpayments to workers involved on City-funded housing projects that are managed by non-profit housing providers. Based on a review of documentation, evidence of the underpayments has been forwarded to the Seattle Police Department for a criminal investigation.

Common reasons for underpayments: Prevailing wage underpayments occur based on a number of factors:

Wage rate: Payment of less than the hourly prevailing wage rate

Classification: Improper classification of workers and paying them for a lower prevailing wage classification

Hours: Under reporting actual hours worked by employees on payroll reports submitted

Overtime: Failure to pay appropriate overtime prevailing wage rates

Apprentices: Use of apprentices not registered in an approved training program

Number of workers: Use of additional workers not reported on payroll reports

Federally funded projects: Federally funded public works projects require that public agencies monitor prevailing wages by reviewing weekly certified payroll reports from the contractor and all subcontractors. Federal regulations also require that the public agency interview workers on the project site and correlate information obtained in the interviews with information reported on payroll reports.

Job Opening: Capital Budget Assistant to the Governor

State of Washington, Office of Financial Management

Position: Capital Budget Assistant to the Governor

Location: Olympia, Washington

Closing Date: Open until filled. Interviews beginning immediately.

Salary: $6,068 to $7,129 per month

Job Summary: The Capital Budget Assistant to the Governor will develop capital budget recommendations, ensuring that capital funds are balanced, assist in the development of long-term funding strategies, approve agency spending plans, and monitor project implementation and delivery. Agency assignments are expected to included all education agencies and some natural resources agencies. The position reports to the Senior Capital Budget Assistant.

For More Information and to Apply: Click here.

Thursday, March 7, 2013

Subcontracting Opportunities Workshop

Subcontracting Opportunities Workshop for Sound Transit's Northgate Link Extension

Contractor outreach: Workshops like this one are a good tool that some government agencies are using to make the subcontracting community aware of upcoming construction projects. They can also be an effective tool to help agencies meet various subcontracting goals for different types of businesses (small, minority, women, disadvantaged, etc.).

When: Wednesday, March 13, 2013 (6:00 p.m. to 7:30 p.m.)

Where: Everett, Washington (Workforce Development Council/EASC, 728 134th St. SW, Suite 128)

What: Sound Transit's Northgate Link Extension will extend from the University of Washington to Northgate, adding 4.3 miles of light rail, including stations in the University District, Roosevelt neighborhood, and Northgate. Hear from Sound Transit about subcontracting opportunities for this upcoming work.

More information about the workshop: Click here.

More information about Northgate Link Extension: Click here.

Wednesday, March 6, 2013

The Benefits and Risks of Federally Funded Projects

Obtaining a federal grant can enable an agency to accomplish work that would otherwise not be possible. However, especially for smaller public agencies not familiar with administering federal grant requirements, there may be problems when the auditor reviews the files.

Audit finding: The Washington State Auditor's Office recently issued audit findings against RiverCom 911 for failing to ensure compliance with federal prevailing wage requirements on the purchase and installation of telecommunications equipment. RiverCom 911 is a municipal corporation serving Chelan and Douglas Counties in Washington state. In 2010 and 2011, they were a sub-recipient of $755,084 in federal funds through the Chelan County Fire Protection District No. 5. It was RiverCom's first federal grant.

Non-compliance: RiverCom failed to include provisions in their contract with their contractors requiring payment of federal prevailing wages and submission of weekly payroll reports from the contractor and all subcontractors. While RiverCom noted that they took actions to try to be in compliance, they were "not aware of the Davis-Bacon Act and its specific requirement to provide weekly reports for prevailing wages." They noted that "this oversight was in no way intentional on the part of RiverCom."

Tips for grant compliance: If your agency receives any grants, whether from the federal government or other sources, here are some practical tips for ensuring compliance:

Read the grant provisions: There is no substitute for actually reading the grant provisions. If you don't understand them, research them.

Communicate with the granting agency: Work with the granting agency to discuss the grant provisions and their expectations for compliance.

Talk with other public agencies: Reach out to other public agencies who may have more experience with complying with the grant provisions and learn from them.

Ask the Auditor's Office: Ask the Washington State Auditor's Office for assistance in interpreting and explaining provisions. Find out them them what issues are on their audit checklist.

Seek assistance from associations: There are many associations for specific types of local government agencies (and functions within agencies) that have resources to help guide and steer your agency to ensure you comply with grant provisions. Associations include, but are not limited to the Association of Washington Cities (AWC), Washington State Association of Counties (WSAC), Washington Public Ports Association (WPPA), Washington Association of School Business Officials (WASBO), Washington Finance Officers Association (WFOA), and the Washington Public Utility Districts Association (WPUDA).

Consult with MRSC: If you are a city, county, special purpose district that is a member of the Association of Washington Public Hospital Districts (AWPHD), Washington Association of Sewer & Water Districts (WASWD), or the Enduris Insurance Pool, the Municipal Research and Services Center can provide valuable advice regarding compliance with grant provisions, and direct you to other resources as well.

Free Design-Build Proposal Workshop

Design-Build Proposal Workshop for Businesses

About Design-Build: The traditional model for public works construction contracts has been what is known as "Design-Bid-Build" or "Hard Bid," in which the lowest responsible bidder with a responsive bid is awarded the project. Increasingly, many public agencies are experimenting with alternative project delivery methods, including Design-Build and Construction Manager at Risk (known in Washington State as GC/CM - or General Contractor/Construction Manager). In Washington State, these alternative methods are authorized by RCW 39.10.

Why should contractors and designers care about Design-Build? With more public agencies using Design-Build, projects that traditionally were awarded to the low bidder are now being awarded based on a combination of qualifications and price. Submitting a proposal for a Design-Build project requires a whole different set of skills than simply estimating a project and submitting a bid. As the market shifts more toward Design-Build (and GC/CM), contractors and designers need to understand these new models. This workshop will help firms think through issues related to submission of Design-Build proposals.

When: Tuesday, March 19, 2013 (5:30 p.m. to 7:30 p.m.)

Where: Everett Performing Arts Center (2710 Wetmore Ave., Everett, WA)

Sponsored by: USDOT's Northwest Small Business Transportation Resource Center and City of Seattle

Cost: Free

Workshop Objectives:

How to position yourself to respond to an RFP or RFQ
How to make an intelligent "go/no-go" decision
How to read an RFQ and outline a proposal
How to respond and answer the "why" question - "Why hire this firm?"

More information: Click here.

Tuesday, March 5, 2013

Webinar: Local Preference - Pros and Cons

What are local preferences? In recent years, many public agencies have adopted local bid preferences, providing a financial advantage to local businesses, and a disadvantage to businesses from outside the local area. Defining the nature of the advantage and what businesses are considered local are among the challenges in implementing local bid preference laws. While these laws help the local economy from one perspective, they often end up resulting in higher prices for government agencies as they award projects to other than the low bidder.

Research local preferences: Click here to read various blogs I've written on the subject of local preferences.

Webinar: Local Preference - Pros and Cons

When: Thursday, March 14, 2013 (2:00 p.m. to 3:30 p.m. Eastern Time)

Where: Your office and computer

Sponsored by: NIGP (National Institute of Governmental Purchasing)

Instructor: Gregory K. Spearman, CPPO, FCCM

Cost:

$59 - NIGP members
$180 - Non NIGP members

Information and registration: Click here.

Job Opening: Central Services Manager

City of Shoreline, Washington

Position: Central Services Manager

Location: Shoreline, Washington

Closing Date: March 18, 2013 at 5:00 p.m.

Salary: $81,978 to $99,738 per year

Job Summary: This position is responsible for managing a new division responsible for the effective management and maintenance of City fleet, facilities, property assets and centralized contracting and purchasing functions.

For More Information and to Apply: Click here.

Job Opening: Senior Program Administrator - Contracting

City of Seattle

Position: Senior Program Administrator - Contracting

Location: Seattle, Washington

Closing Date: March 19, 2013 at 4:00 p.m.

Salary: $36.99 to $43.10 per hour

Job Summary: This position is part of a team that administers public works contracts on behalf of the City. The position reviews detailed project plans and specifications, conducts the public works bid process, executes the resultant contract, and assists in monitoring contract requirements through the life of the contract.

For More Information and to Apply: Click here.

Monday, March 4, 2013

Missouri DOT Now Requiring Electronic Bidding

The Missouri Department of Transportation (MoDOT) made a change in mid-February 2013 to require that all bids be submitted electronically, regardless of the dollar amount of the project. They will make exceptions on a case-by-case basis to allow submission of paper bids.

Bid Express: MoDOT is requiring that contractors must have an active account with a private company, Bid Express, in order to submit their bids via the Internet. Part of the system established by Bid Express requires bidders to obtain a digital ID in order to electronically sign their bids.

Previous policy: In June 2010, MoDOT rejected a bid as non-responsive because it was not submitted electronically. At the time, their policy was that electronic bidding was required for bids of $250,000 or more. Click here to read my June 8, 2010 blog entry from 2010 and my blog from July 1, 2010 on the subject.

Washington state: The Washington State Department of Transportation (WSDOT) adopted electronic bidding in the fall of 2009. Click here to read my blog entry.

Challenges for small businesses: As electronic bidding gains more popularity in the years ahead, it will present unique challenges to small contractors without the technological savvy to navigate through this latest development. Unless public agencies provide sufficient training and restrict electronic bidding to larger projects, public agencies may experience a decrease in bids received, potentially increasing prices to the public.

Sunday, March 3, 2013

Not All Bidding Irregularities Are Created Equal

Bidding irregularities fall into two main categories: material and immaterial.

Material vs. immaterial: A material irregularity is one that provides a substantial benefit or competitive advantage to one bidder not enjoyed by other bidders. Material irregularities must be rejected as non-responsive. Immaterial irregularities, on the other hand, do not provide one bidder with a substantial benefit or competitive advantage not enjoyed by other bidders. A public agency has discretion whether to declare a bid responsive or non-responsive if it has an immaterial irregularity.

Case-by-case: Actually making the determination of whether a particular irregularity is material or immaterial is generally a case-by-case analysis, because the facts in each situation may vary to result in a different answer. Public agencies should consult with their attorneys to make this decision.

Bidding documents: If the bidding documents have specific language indicating that bids will be declared non-responsive if certain things occur or don't occur, a public agency will generally be bound by that mandatory language. This could result in bids being declared non-responsive that otherwise might only contain an immaterial irregularity. On many issues, it is better to state in the bidding documents that failure of the bidder to take a certain action "may result in the bid being declared non-responsive." This preserves an agency's flexibility to examine the specific facts and assess whether the irregularity is material or immaterial.

Bid Opening: The role of the person reading bids at the bid opening should be to disclose to those in attendance what has been submitted, not submitted, signed, or not signed. If there is something read or noted at bid opening that constitutes an irregularity, the person reading the bids should note that the bid will be evaluated after bid opening to determine whether it is responsive or non-responsive, rather than attempting to make a decision during bid opening. At bid opening, all of the facts may not be known and there has not been adequate time to evaluate the circumstances.

Sunday, March 31, 2013

Thursday, March 28, 2013

Wednesday, March 27, 2013

Monday, March 25, 2013

Sunday, March 24, 2013

Wednesday, March 20, 2013

Tuesday, March 19, 2013

Monday, March 18, 2013

Sunday, March 17, 2013

Wednesday, March 13, 2013

Tuesday, March 12, 2013

Monday, March 11, 2013

Sunday, March 10, 2013

Thursday, March 7, 2013

Wednesday, March 6, 2013

Tuesday, March 5, 2013

Monday, March 4, 2013

Sunday, March 3, 2013

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