Tuesday, January 14, 2014

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.
  • 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

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