Wednesday, August 28, 2013

Training: Public Works Project Accounting and Auditing

Public Works Project Accounting and Auditing

When:  All sessions are from 10:00 a.m. to 3:00 p.m.
  • September 5, 2013 (Renton)
  • September 12, 2013 (Yakima)
  • September 19, 2013 (Camas)
  • September 26, 2013 (Everett) 
Cost:  Free

Sponsored by:
  • Starting the Project and Setting up Project Files
  • Budgets and Funding Sources
  • Single Audits and Project Management Reviews
  • Records and Project Close-out
  • Nanci Lien, Fleet Administration Manager, City of Seattle
  • Jim Rioux, Public Works Project Manager, City of Olympia
Information and registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Tuesday, August 27, 2013

Los Angeles Rejects All Bids Due to Conflict of Interest Questions

The commissioners for Los Angeles International Airport rejected all bids on a $350 million media services contract on August 20, 2013 after one of the bidders protested the award.  

Basis of protest:  The protest was based on the fact that the low bidder's team included a former president of the Board of Airport Commissioners who participated in discussions and plans on the media services contract before he resigned from the commission in 2010.

More information on the protest: 
Lessons learned:  
  • Does your agency have a code of ethics that prevents conflicts of interest and addresses other issues?
  • When was the code of ethics last updated?
  • Is the code of ethics comprehensive in addressing a wide variety of ethical issues?  
  • Are your agency's employees regularly trained on the provisions of the code of ethics?
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Monday, August 26, 2013

Training for Public Agencies on Changes to Alternative Public Works Contracting

RCW 39.10 Since Reauthorization:  During the 2013 legislative session, the Washington State Legislature adopted changes to the alternative public works contracting statutes (Design-Build, GC/CM, and Job Order Contracting), and reauthorized these methods for another eight years.

When:  September 17, 2013 (9:00 a.m. to noon)

Where:  Seattle-Tacoma International Airport (The Conference Center, 17801 International Blvd.)

Cost:  Free.  Attendees must pay for parking.

  • Bob Maruska, CPARB Chair; Assistant Director of Engineering Design Services, Port of Seattle
  • Ed Kommers, CPARB Vice Chair; Executive Director, Mechanical Contractors Association of Western Washington
  • Dan Absher, CPARB Member; President, Absher Construction
  • Eric Smith, Member and Past Chair Project Review Committee, Director, Capital Projects, University of Washington
Information and registration:  Click here.  Limited to 200 attendees so sign up early.

Questions:  Contact Bob Marsuska at (206) 787-3146 or by email at

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

Sunday, August 25, 2013

Job Opening: Purchasing Agent

City of Hillsboro, Oregon
  • Position:  Purchasing Agent
  • Closing Date:  Friday, September 13, 2013 at 5:00 p.m.
  • Salary:  $5,118 to $6,924 per month
  • Job Summary:  Develops, implements, and manages the City's purchasing program to ensure compliance with local, State and Federal requirements.
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Thursday, August 22, 2013

Small Business Outreach Event at University of Washington

Small, Minority, and Women-Owned Subcontractor Outreach Event for University of Washington's Maple and Terry Halls Project

When:  Thursday, September 12, 2013 (8:00 a.m. to 10:00 a.m.)

Where:  Alder Hall, Room 107 (1310 NE 40th Street, Seattle, WA)

Cost:  Free

Description:  The University of Washington and W.G. Clark Construction Company (the GC/CM contractor for the Maple and Terry Halls Project) will describe the $83 million project, discuss upcoming subcontract bidding opportunities, and answer questions.  There will be a chance for subcontractors to meet one-on-one with representatives of the UW and W.G. Clark Construction Company.

Who should attend:
  • Subcontractors
  • Public agencies interested in learning how to sponsor outreach events
Information and Registration:  Click here.

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

Wednesday, August 21, 2013

The 26 Causes of Construction Claims and Disputes

Matthew DeVries
What are the causes of construction claims and disputes?  Understanding the root causes can help in developing strategies to prevent these claims and disputes.

Blog from Tennessee attorney:  Matthew J. DeVries is a construction attorney in Nashville, Tennessee who has written a great blog posting on this subject, in which he lists 26 causes identified by the National Cooperative Highway Research Program.

Think strategically:  Mr. DeVries' blog is a short and easy read.  Think about each cause and what strategies you can employ to mitigate against the causes of construction claims and disputes.

More Information:  Click here to read Mr. DeVries' blog from July 3, 2013.

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

Tuesday, August 20, 2013

Obtaining Qualified Contractors on Public Construction Projects

Traditionally, public agencies have awarded public construction projects to the low bidder.  In theory, this ensures that the public pays the lowest possible cost for such work.  However, the low bid doesn't always result in the lowest price at the end of the project, nor does it ensure that the low bidder is capable of performing quality work.

Agencies seek more flexibility in award:  In response to concerns about low bidders not performing well and arguing for change orders that will increase the contract cost, public agencies have increasingly been developing alternative methods for awarding public construction projects.  These alternative methods come with their own set of challenges and may actually cost more money, depending on how the selection process is implemented.

Design-Bid-Build:  The following three approaches, based on contractors bidding a fully designed scope of work, are sometimes used by public agencies for ensuring that the contractor selected is qualified to perform the work:

Prequalification:  Under this scenario, contractors must be prequalified and meet certain criteria before being permitted to bid on a project.  Some public agencies are not authorized to prequalify contractors.  For those that are authorized to prequalify contractors, it is important that the criteria used to evaluate qualifications be clear, objective, and not overly restrictive of the bidding pool of contractors.

Bidder Responsibility:   In many cases, bidder responsibility criteria are the same as the prequalification criteria.  The only difference is that all contractors may bid a project rather than just prequalified contractors.  The low bidder must then demonstrate they meet the bidder responsibility criteria.  Prequalification analysis occurs prior to bidding, while bidder responsibility evaluation occurs after bidding, but prior to award.  Like prequalification, bidder responsibility inserts an element of subjectivity into the award process.

Best Value:  A best value selection process moves away from price as the only basis for identifying the successful contractor and instead begins to looks more like a Request for Proposals process, where various evaluation criteria are identified, including price.  Not all public agencies are authorized to conduct a best value selection process, and the process is often criticized for its subjectivity with the result that the public agency may contract with the firm who does not have the lowest bid.

Alternative Project Delivery Methods:  The following two alternative project delivery methods are gaining in popularity with public agencies.  Unlike the models used under a Design-Bid-Build approach, the design is not complete when the contractor is selected under the following two alternative methods:

Construction Manager at Risk:  This process is known by many different names (CM at Risk, CMAR, GC/CM (General Contractor/Construction Manager), and CM/GC (Construction Manager/General Contractor)).  Not all public agencies are authorized to use this process which involves selection of a contractor early in the design process, through a Request for Proposals process, partially based on qualifications and partially based on limited pricing (fee and general conditions work).  The selected contractor then works with the designer in providing various preconstruction services (cost estimating, scheduling, constructability reviews, value engineering, etc.) before the construction cost is negotiated between the parties when the design is sufficiently completed. 

Design-Build:  Under this project delivery method, the public agency uses a Request for Proposals process to select one firm to both design and build the project, eliminating or reducing conflicts between the designer and contractor.  The price is either part of the selection process (which brings with it many of the problems of the traditional low bid award), or the price is negotiated between the partieis when the design is sufficiently complete.  

Indefinite Delivery/Indefinite Quantity:  Also known as IDIQ, this method of public construction is basically an on-call process, in which undefined work is bid ahead of time and one contractor is selected, sometimes based on price alone and sometimes based on price and qualifications.  There are two major forms that IDIQ public construction contracts take:

Job Order Contracting:  Under Job Order Contracting, a contractor is selected partially based on qualifications and partially based on their markup percentage for serving as the general contractor for undefined work that will be assigned as the needs arise.  Establishing the cost of a specific project is typically based on an agreed upon unit price book.  Nevertheless, the contractor and agency must still negotiate the specific cost of work to ensure that units and quantities used in the estimate are appropriate.  Job Order Contracting is sometimes criticized for being more expensive than the traditional low bid process, but it is a more efficient process for ensuring that work is performed in a timely manner.

On-Call Contracting:  On-call construction contracting differs from Job Order Contracting in the selection process in that specific units of work are bid as part of the selection process (rather than relying upon a unit price book).  While the contractor in Job Order Contracting may be required to subcontract out major portions of the work, under on-call contracting, the contractor often performs all or most of the work themselves.  On-Call contracting is an effective tool for minimizing multiple invitations to bid for what are typically smaller dollar amount projects.  

General comments:
  • How much are bidder qualifications worth?  In most of the methods described above, there is some level of subjectivity involved in the selection process as a public agency evaluates and scores bidders based on qualifications and experience.  The result is that the low bidder may not end up being the selected bidder, or the price may be negotiated.  
  • Maintaining fairness and transparency:  In selecting contractors based on factors other than the low price, it is important that the process established be fair and transparent, and that the qualifications and proposals of contractors be rated as objectively as possible.  The low bid process was originally established to avoid public agencies showing favoritism to certain contractors.  Public agencies are now recognizing that the low bidder isn't always the best option for the public.  But in expanding the scope of selection methodologies, there is the risk of shifting back into an environment of favoritism to certain contractors.  These alternative tools must be managed carefully and thoughtfully.
  • Not all agencies authorized to use all methods:  Not all public agencies are authorized to use some of the selection methods outlined here.  State laws differ.  In addition, if there are federal funds involved with a project, public agencies need to work closely with the federal department granting the money to ensure that the selection process complies with federal regulations.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Monday, August 19, 2013

New Missouri Law Changes Method for Calculating Prevailing Wages

A new law in Missouri will change how the state calculates prevailing wages on public construction projects.  

Wages to decrease:  House Bill 34 will make the following changes in prevailing wages: 
  • School district exemption:  The bill will "exempt construction and maintenance work done for certain school districts from the prevailing wage rate requirement upon the school board's approval," according to Governor Jay Nixon's office.
  • Calculation by county:  The change will allow prevailing wages to be calculated by county, meaning prevailing wages in rural areas will no longer be driven by wages in the state's metropolitan areas.  State Representative Casey Guernsey, the sponsor of the bill, said that he originally "set out to help rural school districts save thousands in construction and repair costs...No longer will Kansas City and St. Louis union rates determine the cost of public projects in rural Missouri."
  • Calculation with union and non-union rates:  The new law will also use non-union rates, in addition to union rates, in calculating the prevailing wage rates.  
No signature by governor:  The new law was hotly debated in the state, with some arguing that the changes will favor undocumented workers being paid cheap wages in rural counties, at the expense of Missouri residents.  Governor Jay Nixon allowed the bill to go into law without his signature.  Click here for more information.

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

Sunday, August 18, 2013

Free Prevailing Wage Training for Contractors

The Washington State Department of Labor and Industries offers free training for contractors and subcontractors on a variety of subjects, including prevailing wages.

Dates and Locations:
  • September 6, 2013 (Lynnwood)
  • October 25, 2013 (Spokane)
  • November 8, 2013 (Vancouver)
  • December 6, 2013 (Seattle)
  • February 7, 2014 (Tumwater)
Topics covered:  Contractors may select one class from each of the five time blocks on the all day schedule. 
  • Prevailing Wages 
  • Contracts on Publicly Funded Projects
  • Bidding, Estimating and the Bottom Line
  • Preparing Your Contracts
  • State Taxes - Sales, Use & B&O
  • Plumbing Code Training
  • Everything You Wanted to Know About Your L&I Account
  • Jobsite Safety Set Up and Your Weeklies
  • Top 10 Things that Sink a Small Business
  • Surviving as a Subcontractor
  • Fall Protection
  • Hazard Communication Standard (HCS)
  • Protecting Your Business and Your Customer
  • New Contractor Overview
  • Electrical Licensing 101
  • Insurance Coverage and Bonds - What You Should Know
  • Saving Money on Workers Compensation Premiums (Retro)
  • Managing a Difficult Customer
  • Hiring an Independent Contractor / Prime Contractor Liability
  • Building Code Updates
  • Accident Prevention Programs in Construction
  • Effective Marketing for Contractors
  • Contracts for General Contractors
  • Plumbing Contractors - Certification Requirements
  • Managing Claims to Control Your Industrial Insurance Costs
Information and registration for September 6 classes:  Click here for registration form, course descriptions, and names of instructors for the class in Lynnwood.

Information and registration for other classes:  Click here.

Questions:  Direct questions about the classes to Rebecca Llewellyn at (360) 902-6366 or (360) 902-5217 or by email at
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Job Opening: Design-Build Project Director

Washington State Department of Enterprise Services
  • Position:  Project Director - 1063 Block Replacement
  • Location:  Olympia, Washington
  • Closing Date:  August 25, 2013 at 11:59 p.m. Pacific Time
  • Salary:  $75,000 to $90,000 Annually
  • Job Summary:  The Project Director position is a four-year project employment position established for the oversight of the 1063 Block Replacement Project using Design-Build procedures according to RCW 39.10.  As a mid-level manager, this position supports public works project management, and is a client advocate for specific state facilities or institutions.  This involves leading a small detached team of professional staff providing leadership, management, and coordination of a major Design-Build project. 
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Thursday, August 15, 2013

Meet the Prime Contractor Event for Subcontractors

Small contractors face unique challenges in breaking into government contracting which come with a variety of regulations and reporting requirements.  Some federal and local public agencies have responded to the concerns faced by small businesses by providing workshops to help educate subcontractors and build networking opportunities for them.  

Event:  Meet the Primes

When:  Wednesday, August 28, 2013 (5:00 p.m. to 8:30 p.m.)

Where:  Seattle, Washington (Filipino Community Center, 5740 Martin Luther King Jr. Way)

Cost:  Free.

Sponsored by:  
  • US DOT - Small Business Transportation Resource Center (SBTRC)
  • Filipino Chamber of Commerce of the Pacific Northwest
Agenda:  Subcontractors are invited to meet with three major contractors (Hoffman Construction, Mortenson Construction, and Howard S. Wright) to learn about how to effectively build relationships and communicate, and about upcoming contract opportunities.  Subcontractors are encouraged to come with their questions.

Who should attend:  
  • Subcontractors
  • Small contractors
  • Public agencies interested in getting ideas for sponsoring their own small business outreach events
Information and registration:  Click here.

Questions:  Call (206) 227-3449 or email

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

Wednesday, August 14, 2013

How Much Are Bidder Qualifications Worth?

The San Antonio Housing Authority (SAHA) recently paid $94,000 more for a construction project because they took the second lowest price, instead of the lowest price.  The second lowest price had better overall qualifications.

Best Value Selection:  SAHA defended their action stating that their evaluation process was not based on the awarding to the low bid, but they assigned points to the bidders based on other factors, including the following, that would ensure they obtained the best value contractor:
    • Oversight and Planning
    • Scheduling
    • Safety and Warranty
    • Price
    • Strength of Section 3 participation
    • Contractor's Women and Minority Business Enterprise plan
Different from Bidder Responsibility:  Rather than just evaluating the qualifications of the low bidder based on bidder responsibility criteria, SAHA assigns points to each of these criteria and then awards to the contractor with the highest number of points, even though their price might not be the lowest price.  

Protest:  SAHA's practice recently led to complaints being filed by a contractor whose bid was $94,000 lower than the bidder awarded the project.  According to SAHA, the protesting bidder's scores on the non-price related factors were not as high as the contractor's who was awarded the project.

What is permitted?  Not all agencies are authorized to conduct a best value selection process using a Request for Proposals for construction projects.

More information:  Click here for more details about the SAHA controversy.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Tuesday, August 13, 2013

Training: Washington State Contractors Claim and Lien Law

Saphronia Young
Washington State Contractors Claim and Lien Law

When:  August 21, 2013 (10:00 a.m. to 11:30 a.m)

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

Speaker:  Saphronia Young, Attorney

Cost:  Free

Register:  Send an email to Mayvis Schwab at with the name(s) and company/agency of who will be attending.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Monday, August 12, 2013

Free Prevailing Wage Training

Awarding Agency Prevailing Wage Workshops

Sponsored by:  Department of Labor and Industries and State Auditor's Office

Cost:  Free

Classroom Training Dates and Locations: (Basic Training from 9:00 a.m. to 11:30 a.m.; Advanced Training from 1:00 p.m. to 3:30 p.m.)
  • August 13, 2013 (Yakima, WA)
  • August 15, 2013 (Tumwater, WA)
  • September 6, 2013 (Lynnwood, WA)
Webinar Training Dates:  (Basic Training from 8:30 a.m. to 11:30 a.m.; Advanced Training from 1:00 p.m. to 4:00 p.m.)
  • August 20, 2013
  • August 22, 2013
Information and registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Sunday, August 11, 2013

Job Opening: Procurement Coordinator in Vancouver, WA

C-TRAN (Vancouver, Washington)
  • Position:  Procurement Coordinator
  • Location:  Vancouver, Washington
  • Closing Date:  Open until filled
  • Salary:  $4,661 to $6,618 Monthly
  • Job Summary: This position is responsible for the coordination and management of the public procurement process for all supplies, equipment, services, and materials required by C-TRAN, the public transit agency for Clark County.
  • For More Information and to Apply:  Click here.

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

Wednesday, August 7, 2013

New Prevailing Wages Effective August 31, 2013

The Washington State Department of Labor and Industries published updated prevailing wages on August 1, 2013.  According to WAC 296-127-011, the new prevailing wages will become effective 30 days later, or on August 31, 2013.
Effective Date for Projects:  For any public works project with a bid submittal deadline of August 31, 2013 or later, the new wage rates will be in effect.  For projects advertised prior to August 31, 2013, but which have a bid submittal date of August 31, 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 opening date of August 30. 2013 or earlier are governed by the current prevailing wage rates dated March 3, 2013.  Since March 3, 2013, Labor and Industries has published one correction to prevailing wages that are noted on their 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 August 31, 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.
No Incorporation by Reference of Federal Wages:  For federally funded projects, the actual federal prevailing wage determination must be physically included in the bidding and contract documents, and may not be just included by reference.  In order to eliminate confusion on federally funded projects, it's best to also physically include the state prevailing wages in the bidding and contract documents, even though it is permitted that Washington state prevailing wages may be incorporated by reference.  
Differences Between Federal and State Wages:  On federally funded projects, both federal and state prevailing wages apply and the contractor is required to pay the higher of the two wages for any classification of labor.  

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

Tuesday, August 6, 2013

The Risks of Requiring Use of Specific Subcontractors

Not all subcontractors are created equal.  There are good ones and ones that a public agency may prefer not be used on their projects, based on past performance issues.

The Question:  May a public agency require use of a specific subcontractor, or prohibit use of certain subcontractors?

Risks:  Here are three risks associated with asking or requiring a contractor to substitute a subcontractor they have planned to use with a different subcontractor:
  • Cost:  Since the contractor's bid was based on the use of specific subcontractors, requiring the contractor to use a different subcontractor may result in added costs to the contractor that the contractor will want to pass onto the public agency.  In essence, the substitution request or requirement of the public agency represents a changed condition from the bid documents in which the contractor was free to select their own subcontractors.  
  • Liability:  If a public agency dictates the use of a specific subcontractor and there are any problems associated with the subcontractor's performance, the contractor will assert that the public agency is responsible for any added costs, since the contractor was forced to use a subcontractor not of their own choosing.
  • Third party action:  The substituted subcontractor may take action against both the contractor and the public agency, alleging that they were improperly removed from the project.  Depending on the outcome of such an action, that could end up in court, the public agency may be required to pay damages to the substituted subcontractor.
Strategies:  One of the best strategies for ensuring that qualified subcontractors are used on the project is to establish bidder responsibility criteria related to subcontractors that the contractor would need to demonstrate were met prior to being deemed a responsible contractor and being awarded the contract.  In Washington state, RCW 39.04.350 permits public agencies to establish supplemental bidder responsibility criteria that may relate to the qualifications and experience of the contractor, subcontractors, and key personnel.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

Monday, August 5, 2013

What is Bid Rigging?

Many public agencies require that bidders submit, as part of their bid a signed "Non-Collusion Affidavit" or "Non-Collusion Declaration."  Sometimes it is a separate form and sometimes it is part of the bid form.

Features of Non-Collusion language:  Here are some of the key elements and statements that bidders are frequently asked to agree to as part of signing a Non-Collusion Affidavit:
  • No action in restraint of competitive bidding:  Bidder has not, directly or indirectly, colluded, conspired, connived, or agreed, entered into or offered to enter into any combination, collusion, or agreement to receive or pay, or otherwise taken any action:
    • In restraint of free, competitive bidding.
    • To fix the bid price of any other bidder
    • To fix any overhead, profit or cost element of the bid price
  • No solicitation of sham bids:  Bidder has not induced or solicited any other bidder to put in a false or sham bid.
  • Genuine bid:  Bidder agrees that their bid is genuine and not collusive or sham.
How does Bid Rigging work?  When a bidder signs a Non-Collusion Affidavit, they are agreeing they are not participating in any form of bid rigging.  Here are five different pictures of what bid rigging looks like in practice:
  • Bid price sharing:  Bidder A shares its proposed bid price, so that Bidder B can submit a higher price to ensure that Bidder A is the low bidder and is awarded the contract.
  • Bid suppression:  Bidder A agrees to suppress its bid and not bid so that Bidder B can be awarded the contract.
  • Bid rotation:  Bidder A and Bidder B both bid but take turns to submit the lowest priced bid to be awarded the contract.
  • Bid withdrawal:  Bidder A withdraws its bid to leave Bidder B as the only bidder.
  • Non-conforming bids:  Bidder A deliberately submits a bid that does not comply with the bid documents so that Bidder B can be awarded the contract.
In each of the scenarios described above, the losing bidder may be awarded a subcontract by the successful bidder, or it may receive a financial payment from the successful bidder.

More information:  I am indebted to Shila Dorai Raj, CEO of the Malaysia Competition Commission, for the description of the different bid rigging scenarios that I've adapted and noted above.  Click here to read her article on "Zero Tolerance for Bid Rigging."

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