Tuesday, May 7, 2013

New Public Procurement Laws Approved in 2013 Legislative Session

The Washington State Legislature has approved the following laws impacting public procurement and contracting:

Alternative public works procedures:   Substitute House Bill 1466 reauthorizes the alternative public works contracting procedures of Design-Build, GC/CM, and Job Order Contracting for another eight years.  There were a number of relatively minor changes to the law that I will blog about later.

No retainage on federally funded transportation projects:  Substitute House Bill 1420 fixes a technical problem from previous legislation that was necessary to comply with U.S. Department of Transportation regulations regarding retainage.  While much of the bill represents an improvement, it does have its flaws as I noted in a previous blog entry.
  • State agencies protected under payment bond:  Under SHB 1420, no retainage may be withheld on any project funded in whole or in part with federal transportation funds.  Instead, the protection normally afforded by retainage for subcontractors, suppliers, workers, and three state agencies (Revenue, Employment Security, and Labor and Industries) for taxes and premiums must come from the payment bond instead.
  • Notify state of acceptance:  Even though no retainage may be withheld on these projects, the public agency must nevertheless notify the Departments of Revenue, Employment Security, and Labor and Industries of final acceptance for such contracts over $35,000.
  • Affidavits prior to final acceptance:  For these federally funded transportation projects, the Affidavits of Wages Paid for the contractor and all subcontractors must be submitted prior to final acceptance by the public agency.
  • "Shall" to "must":  There are numerous changes throughout the bill modifying "shall" to "must." 
Evaluating the low bid for purchases before taxes: Under Engrossed Substitute Senate Bill 5110, a local government authorized to impose sales and business and occupation taxes may award a contract for supplies, materials, or equipment to a bidder submitting the lowest bid as calculated before the application of local sales and business and occupation taxes.

Water-Sewer Districts - Payment and Performance Bonds:  Senate Bill 5186 will permit Water-Sewer Districts to require that payment and performance bonds on its public works contracts name the water-sewer district as the protected party (obligee) rather than the state.  Prior to passage of this bill, all payment and performance bonds for a Water-Sewer District were technically required to name the state as the obligee.  Up to this point, only cities and towns have had the ability to have themselves and not the state named as the obligee.  While this bill fixes the problem for Water-Sewer Districts, there are a host of other types of public agencies that, by practice, require payment and performance bonds to name the agency as the obligee, notwithstanding the language of RCW 39.08.030.

School Districts - Bid thresholds:  Engrossed Substituted House Bill 1633 increases thresholds for public bidding and performing public works with school district personnel.  The dollar threshold above which bidding for a public work is required will be increased from $50,000 to $100,000.  The dollar threshold below which a school district may use its own staff to perform a public work is increased from $40,000 to $75,000. 

WSDOT - Use of Job Order Contracting:  Under the provisions of  House Bill 1768, the Washington State Department of Transportation (WSDOT) will be added to the list of public agencies authorized to use Job Order Contracting as described in Chapter 39.10 RCW.  With the passage of the bill, WSDOT will be able to use Job Order Contracting for "the administration of building improvement, replacement, and renovation projects only."

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 

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