Washington Appoints New Prevailing Wage Manager

The Washington State Department of Labor and Industries has appointed Jim Christensen as the new Prevailing Wage Program Manager/Industrial Statistician, effective January 1, 2014.

Jim is no stranger to L&I and prevailing wages as he held the same position for more than ten years from 1993 to 2003.  Welcome back, Jim!

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Legislation Would Require Public Agencies to Accept Retainage Bonds

A newly introduced bill to the Washington State Legislature would eliminate the current flexibility of public agencies in deciding whether to accept a retainage bond on public works projects.  The legislation would also appear to eliminate the ability of a public agency to establish financial stability ratings for a surety providing Payment and Performance bonds on public works projects.

Current law:  Under the current requirements of RCW 60.28.011, a public body must accept a bond in lieu of withholding retainage:

• Meet agency standards:  Provided the bonding company meets standards established by the public body, the bond must be accept.

• Good cause refusal to accept:  The retainage bond must be accepted by the public agency, unless they "can demonstrate good cause for refusing to accept" the bond.

Proposed legislation:  Senate Bill 6110 would eliminate any discretion on the part of a public body in whether to accept a retainage bond.  

• Elimination of local standards:  The current requirement that the bonding company must meet "standards established by the public body" would be deleted, eliminating a public agency's ability to require a specific financial stability rating for the surety.  

• Elimination of "good cause" refusal to accept:  The current flexibility to refuse to accept a retainage bond for "good cause" (a phrase that has always been subject to some interpretation) would be deleted and replaced with a requirement to comply with RCW 48.28.010 (which would also be amended by this bill).

• RCW 48.28.010:  Here's what this law states with the underlined language reflecting the proposed addition as part of SB 6110.  

"Whenever by law or by rule of any court, public official, or public body, any surety bond, recognizance, obligation, stipulation or undertaking is required or is permitted to be given, any such bond, recognizance, obligation, stipulation, or undertaking which is otherwise proper and the conditions of which are guaranteed by an authorized surety insurer, or by any unauthorized surety insurer as a surplus line pursuant to chapter 48.15 RCW of this code, shall be approved and accepted and shall be deemed to fulfill all requirements as to number of sureties, residence or status of sureties, and other similar requirements, and no justification by such surety shall be necessary.  This section applies to any and all surety bonds executed, filed, posted, furnished, or otherwise given as security pursuant to any statute of this state or any law or ordinance of any public body."

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

More Public Contracting Bills Introduced in Washington Legislature

In addition to the bills I commented on in my previous blog from January 21, 2014, the following additional bills impacting public contracting in the State of Washington have been introduced to the Legislature:

Exempt Proposals from Public Records Disclosure:  A bill (House Bill 2578) introduced to the Washington State Legislature would exempt from public records disclosure the proposals submitted by contractors for alternative public works delivery methods (Design-Build, GC/CM, and Job Order Contracting) and related evaluation documents until after a contract is executed or the selection process is terminated. 

Expand Prevailing Wages to Public-Private Partnerships:  Substitute House Bill 1025S would create a new definition of a "subsidized public works" project and would require that prevailing wages be paid on such projects.  Similar bills have been introduced in past years, but have not been successful.  Adoption of this bill would have the impact of limiting the number of public-private partnership projects constructed.  See my previous blog on legislation introduced in earlier years. 

Expand Apprenticeship Utilization Requirements:  House Bill 2526 would establish penalties for contractors failing to comply with the apprenticeship utilization requirements of RCW 39.04.320 for public works projects of the State Department of Enterprise Services, the State Department of Transportation, institutions of higher education, and all school districts.  The bill would also significantly expand requirements for use of apprentices on all public works projects of the state and all municipalities.  Here is a summary of the provisions of this bill:

• Debarment:  HB 2526 would add to the list of reasons for contractor debarment the failure of the contractor to comply with the apprenticeship utilization percentages required by RCW 39.04.320.

• Bidder Responsibility:  HB 2526 would also add to the list of mandatory bidder responsibility criteria in RCW 39.04.350 the failure of the contractor to meet apprenticeship percentage utilization requirements under RCW 39.04.320.

• State Monitoring of Compliance:  The State Department of Enterprise Services would be required to maintain on its website a list of contractors that failed to meet apprenticeship percentage utilization requirements on public works projects.

• Bid Preference for Contractors with Apprenticeship Programs: HB 2526 would provide a 5% bid preference to be used in bid evaluation for contractors with a registered apprenticeship training program approved by the Department of Labor and Industries for trades to be used on the public works project.

• Expand Apprenticeship Utilization Requirements for all Public Agencies: HB 2526 would require that "the bidder must be a party to an apprenticeship agreement for each trade it is employing that has a registered apprenticeship training program" if the "bidder will employ more than one trade on the public work."  This provision appears to have the impact of requiring apprentice utilization for all municipalities, and not just those agencies named in RCW 39.04.320.

Permit Electronic Public Works Bidding for State Agencies:  Substitute House Bill 1841 would permit state agencies to conduct competitive bidding for public works projects electronically or accept electronic signatures as part of the bidding process.

Permit Fire Districts to Perform Public Works Without Bidding:  House Bill 2266 would permit a fire department or regional fire authority to "use fire service personnel, either employed or volunteer, to perform" public works projects less than $20,000 without obtaining competitive bids.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Workshop for DBE Firms

Workshop for DBE Firms:  Many public agencies have goals, often tied to federal funding requirements, to utilize specific percentages of Disadvantaged Business Enterprises (DBEs) on public contracts.  This workshop provides tools for DBEs to be successful.  Public agencies may want to encourage DBEs they are aware of to sign up for the workshop. 

When:  January 28, 2014 (8:30 a.m. to Noon) 

Where:  Seattle, WA (El Centro de la Raza, 2524 16th Ave. South) 

Cost:  Free

Agenda:

• Review the components of an effective, customized business plan
• Determine how to develop a plan or revise the plan you currently have
• Decide how you want to make changes to your business in 2014
• Focus on Marketing: Develop new marketing strategies and review your current marketing presence
• Enhance your bonding capabilities
• Set business priorities, goals and timelines for the new year

Sponsored by: U.S. Department of Transportation, Office of Small and Disadvantaged Business Utilization, Northwest Small Business Transportation Resource Center 

Information and registration:  

• Visit https://www.eventbrite.com/e/a-workshop-for-dbe-firmsgrow-your-business-in-2014prepare-for-new-success-tickets-10020769391

• Call (425) 248-4222

• Email aliciam@economicalliancesc.org
  

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

GC/CM Training on February 13-14

2 Days of Training on GC/CM (General Contractor/Construction Manager)

GC/CM is one of three alternative public works contracting procedures authorized by Washington State law (RCW 39.10).  The generic name for this method of contracting, and as it is known elsewhere in the country, is Construction Manager at Risk.

Who should attend?  If you represent a public agency and you are exploring whether to deliver an upcoming project through GC/CM, attendance at the training will be very helpful for you.  Likewise, if you represent a contractor or subcontractor and are interested in doing work for agencies with GC/CM projects, understanding how it works is very important.  Architects and engineers can also benefit from the training in understanding their different role on a GC/CM project.

Structure of the training:  The training is a good overview of the GC/CM process and some of the issues involved in implementing it.  There will be presentations by industry experts, hands-on class exercises, and plenty of time for questions and answers with a panel.  I will be one of the presenters (talking about the complexities of the various cost categories in GC/CM contracting) and will also be on the panel.

When:  February 13-14, 2014 (8:00 a.m. to 5:00 p.m.)

Where:  Seattle, Washington (AGC Building, 1200 Westlake Ave. N.)

Cost:  $350

Capacity:  51 seats available (as of January 12, 2014)

Sponsored by:  AGC Education Foundation, University of Washington, and Mechanical Contractors Association of Western Washington

Information and Registration:  Click here.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Proposed Bills Affecting Public Contracting in Washington State

The following bills affecting public contracting have been introduced into the Washington State Legislature this session: 

Allow local agencies to waive prevailing wages:  House Bill 2299 would allow "a county, municipality, or political subdivision of the state" to waive prevailing wage requirements for public works contracts estimated to cost less than $5 million dollars.  The waiver could also apply for public building service maintenance contracts (janitorial, shampooer, window washer, waxer).  In order to opt out of the prevailing wage requirements of Chapter 39.12 RCW, the governing body of the public agency would need to approve such a waiver by a majority vote.  The legislation specifically would permit public agencies to subdivide public works projects in order to come in under the $5 million threshold.  

Require certified payrolls prior to paying contractors:  House Bill 2331 would require a public agency to obtain certified payroll records from the contractor and all subcontractors prior to making any payment to the contractor, and would also require the payrolls prior to final payment and release of retainage to the contractor. 

Relax various prevailing wage requirements:  Senate Bill 6186 would do the following:

• Apprentice use on WSDOT projects:  Reduce apprenticeship percentages required on WSDOT projects from 15% to 13% and increase the threshold of which projects apprenticeship applies to from $2 million to $4 million.

• Electronic surveys:  Require the Department of Labor and Industries to provide contractors with the option of completing prevailing wage surveys electronically.

• On-Site work only:  Restrict the applicability of prevailing wages only to workers "employed directly on the site of work," eliminating the impact of court decisions requiring prevailing wages for off-site prefabrication of work performed specifically for a public works project.

Change methodology for establishing prevailing wages:  The following three bills address how the Department of Labor and Industries should establish the prevailing wage rates:

• Statistical analysis vs. wage surveys:  House Bill 2210 would require the Department of Labor and Industries to use a "stratified random sampling methodology," instead of the "wage surveys" currently conducted to establish prevailing wages.  It would also exempt data collected by Labor and Industries through this process from disclosure under the state's public records laws.

• Survey only non-public works projects:  House Bill 2209 would restrict prevailing wage surveys conducted by the Department of Labor and Industries to only "nonpublic work" projects.  Behind this bill is the assertion that public works projects, on which prevailing wage must already be paid, artificially inflate prevailing wage rates.  The bill would also exempt data collected by Labor and Industries through wage surveys from disclosure under the state's public records laws.

• Use only union wage rates to establish prevailing rates:  House Bill 2527 would require the Department of Labor and Industries to establish prevailing wages based on collective bargaining agreements, instead of through conducting wage surveys.  For trades where there are no collective bargaining agreements, L&I would be required to conduct wage surveys or use "other appropriate methods" to establish the prevailing wage rates.

Civil construction on GC/CM projects:  House Bill 2208 would define a "heavy civil construction project" for GC/CM (General Contractor/Construction Manager) projects and permit the GC/CM to self-perform as a negotiated amount up to 50% of the cost of the work, and to bid on other portions of the work agreed to with the public body, provided that at least 30% of the work is competitively bid.  The current law requires that a GC/CM must bid to self-perform any of the work and such self-performed work is limited to 30% of the construction cost.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

3 Job Openings

Pierce County, Washington

• Position:  Senior Buyer

• Location:  Tacoma, Washington

• Closing Date:  January 27, 2014 at 4:30 p.m.

• Salary:  $26.49 to $33.50 per hour

• Job Summary:  This position involves complex technical work procuring materials, equipment, construction and services for Pierce County, and is responsible for purchasing and utilizing the formal bid process to obtain materials, equipment, construction and services, in accordance with established purchasing guidelines, procedures, and state and local laws and ordinances.

• For More Information and to Apply:  Click here.

Pierce Transit, Washington

• Position:  Purchasing Agent

• Location:  Tacoma, Washington

• Closing Date: No date specified

• Salary:  $55,023 to $67,403 annually

• Job Summary:  Essential functions of this position include the following:  Prepare and process bids and proposals, including working with project managers on specification development, pre-proposal, and pre-award meetings; Place advertisements; Receive bids, and evaluate for compliance with specifications; Perform other support activities for the formal bid/proposal process; Process purchase orders; manage accounts to include tracking, ordering, and maintaining associated records; monitor and maintain inventory of agency office suppliers; Fulfill requests to research and price various goods and services.

• For More Information and to Apply:  Click here.

City of Kennewick, Washington

• Position:  Buyer II

• Location:  Kennewick, Washington

• Closing Date: February 1, 2014 at 11:59 p.m. Pacific Time

• Salary:  $48,204 to $67,488 Annually

• Job Summary:  The position is responsible for performing all levels of procurement and contracting duties for the City including bids, quotes, requests for proposals, contracts, research and analysis of a wide variety of commodities, construction and services, for the City and collaborative partners at multiple organizations.  Duties include evaluating specialized and high dollar value procurements subject to competitive bidding, contracts, negotiation, and other formal purchasing requirements and procedures.

• For More Information and to Apply:  Click here.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Planning for Emergency Construction Contracts

Laura Antonuccio

"Public contracts for construction or construction-related services are typically awarded through a traditional competitive process to the bidder who offers the best value or lowest price," writes Arizona attorney Laura Antonuccio.  "Although this process is complex and often time-consuming, it serves the public interest by helping ensure that taxpayer dollars are spent wisely, fairly and transparently.  However, because it does not always make sense to follow traditional procurement procedures," many public agencies have procedures that enable them to waive competitive bidding requirements in the event of an emergency.

What is an emergency?  The definition of an emergency that justifies waiving competitive bidding requirements varies by different agencies.  However, here are some elements that are often part of the definition of an emergency:

• Unexpected:  An unexpected event or unforeseen circumstance

• No control:  It is beyond the control of the public agency

• Performance threatened:  It presents a real and immediate threat to the proper performance of essential governmental functions

• Property loss and bodily injury:  It has resulted in, or will likely result in, material loss or damage to property, bodily injury, or loss of life

• Immediate action:  It requires immediate action and there is not sufficient time to go through a competitive bidding process

2-Step process:  In the event of an emergency, there are really two actions that a public agency takes to bypass normal competitive bidding requirements.  

1. Declare that an emergency situation exists
2. Waive competitive bidding requirements

Who can declare an emergency?  Public agencies have different organizational structures and so who is authorized to declare an emergency and waive competitive bidding may vary.  Here are some questions for public agencies to answer about emergency contracts:

• What's required?  Do your laws and policies specify who may declare an emergency?

• Delegation?  Do your policies delegate authority to declare an emergency to appropriate individuals?  

• Timely response?  If an elected council or commission must declare an emergency, will they be available to act in a timely manner when an emergency occurs?  Have they delegated their authority to an administrative person? 

• Availability outside normal hours?  How will your agency respond if an emergency occurs in the middle of the night (a broken sewer or water main, for example)? 

Notifying the public:  Many emergency contracting laws and policies require that an individual or body formally notify the public within a certain number of days after the emergency has been declared that the agency took emergency action and waived competitive bidding requirements.  This may take the form of an advertisement in a newspaper or a posting on the agency's website.  In the interest of transparency, this is an important part of the process.

Time is of the essence:  In making the necessary repairs in an emergency situation, time is of the essence.  Here are a couple of strategies for planning ahead to make sure appropriate resources will be available to address the emergency:

• On-Call emergency response contracts:  Some public agencies publicly and competitively advertise for on-call emergency contracts that are only used in emergency situations.  This eliminates the need to actually declare an emergency and waive competitive bidding, because the bidding has already occurred ahead of time.  It is important to assess the types of emergencies that are most likely to occur in developing these on-call emergency contracts.  Click here to read about some of the issues associated with on-call public works contracts in the State of Washington.

• Maintain list of available contractors:  In the absence of an on-call emergency contract, public agencies should maintain a list of contractors who could be available to respond quickly in the event of specific types of emergencies.  In developing this list, it is important to talk with the contractors to assess what their availability might be, and how they can be contacted in the event of an emergency that may occur outside of normal business hours.

• Work by agency personnel:  Some public agencies have maintenance and repair staff who may be available to respond to emergency situations.  Make sure they are authorized by laws to perform public works construction projects, and if there are any dollar limitations of the amount of work they may perform.  Having contact information for these employees outside of normal working hours is an important part of planning for responding to emergencies.

Resources:

• Definition of emergency in Washington state:  RCW 39.04.280 provides a definition of an emergency public works project.

• Article:  Emergency Construction Contracting, by Laura Antonuccio, an attorney with Gallagher & Kennedy, P.A., in Phoenix, offers a good explanation of emergency contracting requirements in Arizona and how contractors should reach out to public agencies to make them aware of their capabilities in the event of emergency situations.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Training in Alaska on Best Practices for Construction and Services Contracting

I was in Anchorage, Alaska on January 9-10, 2014 providing two days of training on Best Practices for Construction and Services Contracting.

The training was sponsored by the Alaska-NAPM chapter.  

Contact me if you would like a copy of the outline of the training.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

2014 Economic Outlook and Construction Forecast

2014 Economic Outlook and Construction Forecast 

When:  Thursday, January 16, 2014 (5:30 p.m. to 7:30 p.m.)

Where:  Bellevue, WA (Red Lion Hotel, 11211 Main Street) 

Sponsored by:  CMAA Pacific Northwest Chapter 

Speaker:  Kirk Robinson, President, The Robinson Company 

Cost:  $45

Information and registration:  Click here.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Free Training on Insurance and Bonds

Insurance and Bonds 

When:

• February 6, 2014 (Renton, WA)
• February 13, 2014 (Yakima, WA)
• February 20, 2014 (Camas, WA)
• February 27, 2014 (Everett, WA)

Sponsored by:

• APWA-Washington Chapter, Contract Administration Subcommittee (CASC)

• MRSC (Municipal Research and Services Center)

Cost:  Free

Instructors: 

• Pamm Jardine, Kibble & Prentice, A USI Company
• Stuart O’Farrell, Parker, Smith & Feek

Information and registration:  Click here. 

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Change in Prevailing Wage Reporting Requirement as of January 1, 2014

RCW 39.04.370 requires that public works contracts contain a provision requiring that contractors submit on the Affidavit of Wages Paid form "certain information about off-site, prefabricated, nonstandard, project specific items produced under the terms of the contract and produced outside Washington." 

Reporting not applicable for contracts after January 1, 2014:  The law applies for public works contracts entered into between September 1, 2010 and December 31, 2013.  Therefore, for all public works contracts entered into on January 1, 2014 or later, the language should not need to be included in such public works contracts, and contractors on those contracts are not required to report the information on the Affidavit of Wages Paid. 

Reporting still applicable for older contracts:  However, for contracts entered into between September 1, 2010 and December 31, 2013, the reporting requirements for contractors still apply.

Review your contracts:  Public agencies should review their public works bid and contract documents to delete language related to this off-site prefabrication reporting requirement.  Often it is included in a section addressing bidder responsibility criteria.  See RCW 39.04.350 (1)(f).

Information to CPARB:  The Department of Labor and Industries will report information they have collected under this law to the Capital Projects Advisory Review Board (CPARB) for their review. 

Resources:  Here are some links giving more background about this requirement:

• September 15, 2010 blog posting, with links to earlier blogs explaining portions of RCW 39.04.370

• Department of Labor and Industries Questions and Answers

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

IRS Decreases Mileage Reimbursement Rate for 2014

The IRS has announced a decrease in the standard mileage reimbursement rate from 56.5 cents a mile to 56.0 cents a mile, effective January 1, 2014.  Click here to read the announcement from the IRS.

 Check Invoices and Contracts:  If you're a public agency, make sure you check invoices carefully so that you pay the contractual mileage reimbursement rate you've agreed to.  If you're a contractor doing business with the government, review your contract before submitting an invoice so that you submit the correct rate on your invoices.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com