Advice to Public Agencies from a Business Perspective

I recently received an email from an individual who spent 35 years in business responding to government agency (city, county, state, and federal) Invitations to Bid (ITB).  The following is a summary, in my words, of this individual's advice to public agencies.

Be proactive in soliciting firms:  In order to obtain the most competitive prices, it is important for public agencies to be proactive in soliciting as many firms as possible to respond to the solicitation.  It's not enough to just publish the solicitation on a website or in a newspaper and hope that qualified firms will find the ITB and respond.  Public agencies need to research and understand the market and notify applicable firms of the opportunity.  This will result in more competition and therefore lower prices.

Understand the scope of services sought:  As technology changes, it is important for government agencies to keep up to date on these changes as it impacts the scope of work for an ITB.  Just because a public agency used a particular scope of work years ago doesn't necessarily means that it is still an accurate reflection of how the scope should be described today.  If the solicitation includes a bid form with specific line item bids, is it clear what work is included in each line item?  Meeting with firms in the industry prior to issuing the solicitation can help public agencies understand changes in the industry and shape the scope of work and bid form in a manner that will make it attractive and easy for businesses to respond to the ITB.  Many solicitations end up being embroiled in protests or are cancelled because bidders and proposers made different assumptions about what was needed due to a lack of clarity in the solicitation document.

Describe the basis of determining the low bidder:  If an ITB includes multiple line items for unit prices, the public agency should include estimated quantities so it can determine which firm is the low bidder.  Without estimated quantities and just unit prices, it is very difficult to determine what firm has the overall lowest price and should be awarded the project. 

Include accurate estimated quantities:  Public agencies should evaluate carefully whether the estimated quantities included on a bid form are a reasonable estimate based on historical data and projected needs.  Some public agencies end up using the same estimated quantities from year to year and decade to decade even though the actual quantities used have changed dramatically over time.  Unreasonably inaccurate estimated quantities can also result in bidders with knowledge of the agency's actual needs submitting unbalanced bids that may result in higher prices to the public agency.  For unit price contracts, public agencies should establish an internal process to begin to systematically collect actual quantities (or require the selected firm to help with such reporting) so that for future solicitations, more accurate estimated quantities can be used.

Be transparent about the process:  The bidding and award process for public agencies should be transparent and bidders should have easy access to bid tabulations and copies of bids submitted, without requiring that businesses submit elaborate requests for what is a matter of public record.

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

Free Webinar: Social Media for Government

Social Media for Government: Harnessing the Power While Managing the Risks

When:  September  17, 2014 (11:00 am to 12:00 pm, Pacific Daylight Time)

Cost:  Free

Where:  Your computer

Description:  The facts are clear: an ever-growing segment of the population is getting the majority of their news and information through social channels.  While some local governments have at least started social accounts, most aren't truly taking advantage of the power of this new medium to engage and connect with their communities.  This webinar will:

• Provide strategies for using social media
• Social media's relationship with various laws including public records and open public meetings
• Strengths and weaknesses of various platforms
• Questions and answers

Instructors:  

• Bronlea Mishler, Deputy Director of Communications for Snohomish County (WA)
• Jim Doherty, Legal Consultant for MRSC

Sponsored by:  MRSC (Municipal Research and Services Center)

More information and registration:  Click here.

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

What is Your Bid Submittal Deadline?

How you describe your bid submittal deadline may make a difference between whether you get a bid protest or not.  Or whether you receive non-responsive or responsive bids.  If you're a bidder, you want clarity so that you know what the expectations are for when the bid is timely.

Precise language to avoid ambiguity:  Because submission of bids is often a last minute (or second) affair, it's important that the language in your bid documents describing the deadline be precise so there is no room for misinterpretation as to whether a bid has been submitted on time or is late.

Problematic deadline language:  In reviewing bid documents for various public agencies, I've often seen the following language, all of which is ambiguous as to the real deadline:

• Bids must be submitted prior to 2:00 pm
• Bids must be submitted up to 2:00 pm
• Bids must be submitted at 2:00 pm
• Bids must be submitted at 2:00 pm exactly

The problem with each of these examples is that they are not precise when a bid is on time versus late.  For example, in the first and second examples, is a bid submitted at 2:00 pm timely or must it be submitted "prior to" or "up to" 2:00 pm?  The last two examples imply that bids may only be submitted "at" 2:00 pm, but not before.

Preferred deadline language:  I think the best practice for bid submission language is as follows:

• Bids must be submitted no later than 2:00 pm

This language is clear that if a bid is submitted after or later than 2:00 pm it will be deemed non-responsive.

Review your bid documents:  Take a look at your bid documents for how they describe the time of the deadline.  Of course, your language must also address the date and the place where bids must be submitted.

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

When Do Emergencies Cease to be Emergencies?

In public procurement, most states and local agencies have provisions that permit them to award a contract for goods, services, or construction in the event of an emergency.

Definition of an emergency: The definition of what constitutes an emergency and the subsequent waiving of competitive bidding requirements varies for different agencies, depending on state and local laws and policies.  Generally, however, an emergency occurs when there are unforeseen circumstances beyond the control of the agency that will likely result in any of the following if immediate action is not taken:

• Material loss or damage to property
• Bodily injury or loss of life
• A real or immediate threat to the proper performance of essential functions.

How long do emergencies last?  Waiving competitive bidding requirements due to an emergency is an exception to the normal requirements.  Thus, emergency contracts are usually only valid to address the immediate emergency situation.  If there is subsequent or follow-up work that is necessary, it would generally not be deemed an emergency if the public agency would have sufficient time in which to competitively bid the work.  This, however, is a case-by-case decision that requires exercising subjective and wise judgment.

Washington state:  In Washington state, emergencies are defined in RCW 39.04.280, although some specific types of agencies also have their own definitions for emergencies.

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

Job Opening: Buyer

King County (WA)

• Position: Buyer

• Location:  Seattle, Washington

• Closing Date:  September 2, 2014 at 4:30 pm, Pacific Time

• Salary: $60,902 to $77,188 Annually

• Job Summary:  This position is responsible for procuring supplies, materials, equipment, and services in order to support operational needs throughout King County.  The successful candidate must be highly analytical, and have the passion and drive to secure goods and services by efficient and cost effective methods in accordance with procurement laws, regulations, policies and procedures in support of King County's mission and objectives.  

• 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

Training in September: Washington Construction Law

21st Annual Washington Construction Law Seminar:  I've attended this seminar in previous years and always found it to be very helpful.  I will be attending again this year.

When:  September 18-19, 2014 (9:00 a.m. to 5:00 p.m.) 

Where:  

• Seattle, Washington (City University, 521 Wall Street)
• Or participate by a Live Webcast from your office

Agenda and Speakers:

• Federal Construction Law - New Developments (Bruce P. Babbitt)

• Washington State Public Works Competitive Bidding and Bid Protests (Arnold R. Hedeen)

• Key Clauses of Construction Contracts (Alan Bornstein)

• Integrated Project Delivery (Scott R. Sleight)

• Key State Tax Considerations for Construction Projects (George C. Mastrodonato)

• Building Information Modeling (BIM) (Brendan J. Peters)

• Construction Changes/Differing Site Conditions (John P. Ahlers)

• What Happens When Someone in the Chain Goes Bankrupt? (Jerry N. Stehlik)

• Discovery Issues in Construction Claims (Andrew L. Greene)

• Washington Construction Law - New Developments (Paul R. Cressman, Jr.)

• Claims Against Design Professionals (Stanton P. Beck)

• Design Professional Considerations (Blaine J. Weber)

• Ethical Considerations for Construction Lawyers (John A. Strait)

• Insurance in the Construction Industry (Todd C. Hayes)

• Lien and Bond Claims; Dealing with Sureties (Kerry C. Lawrence)

• Construction Mediation (Henry C. Jameson)

Cost: 

• $645 - Government employees
• Other fees for different categories 
• The sponsor of this training, The Seminar Group, will provide my blog readers with a $50 per person discount off of the regular tuition rate.  Call The Seminar Group to register and mention Mike Purdy and the discount code "SPP50." 

 Credits:  Approved for continuing education credits with:

• Continuing Legal Education (CLE) credits for Washington, Oregon, Idaho, California, Alaska
• Construction Risk & Insurance Specialists by IRMI
• AIA (American Institute of Architects)
• American Institute of Constructors
• Construction Management Association of America

Sponsored by:  The Seminar Group

Information and registration:  Click here.

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

Key Factors in Deciding on a Unit Price Book for Job Order Contracting

Job Order Contracting (JOC) has been gaining increasing popularity among public agencies as an efficient project delivery tool for public works construction projects.  In JOC, the contractor agrees to a fixed period, indefinite quantity delivery order contract which provides for the use of negotiated, definite work orders for public works, based on an established unit price book.

Types of unit price books:  There are a number of options available for what unit price book to use and there are companies who help guide public agencies in the establishment and management of Job Order Contracting.

• Agency developed:  Some public agencies develop their own unit price book, often using prices based on historical usage data.

• Off-the-shelf industry:  Other public agencies use an already established unit price good such as the estimating guide published by the company RSMeans.

• Customized: Still other public agencies turn to specialist companies such as RSMeans and The Gordian Group to develop a specific unit price book tailored to the agency's needs and location. On July 21, 2014, The Gordian Group announced that it acquired RSMeans from Reed Construction Data.

Lisa Cooley

Evaluating unit price books:  Lisa Cooley, the Program Director for JOC and Custom Cost Engineering at Reed Construction Data, has written a very thoughtful, thorough, and accessible article entitled "The Best Unit Price Book for Your Job Order Contract" in which she explains some of the factors that should drive a decision on which unit price book to use for a Job Order Contracting program.  Ms. Cooley has also written some other helpful articles on the same website.

JOC in Washington state:  Not all public agencies are authorized to use JOC in Washington state. RCW 39.10.420 lists the agencies or agency types that may use JOC.  Other JOC related laws are found in RCW 39.10.430, RCW 39.10.440, RCW 39.10.450, and RCW 39.10.460.

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

Can Businesses Access Your Business Opportunities from Mobile Devices?

In our increasingly mobile world, we are seeing more and more Apps being developed for mobile devices (smart phones and tablets).

An App for business opportunities?  Many public agencies publicize business opportunities for bidding and proposals on either their own website or on a third party website.

• Has your agency considered developing an App to make your business opportunities available more easily for contractors and vendors?  

• Is there an App available from the third party website where you publicize your bids and proposals?

2 new free Apps:  Although not directly related to agency business opportunities, here are two new apps that may be of interest:

• MRSC City + Town Officials Directory: This comprehensive database published by the Municipal Research and Services Center includes the names, positions, and contact information for elected officials and key employees of the 281 cities and towns in the state of Washington.  It also includes useful information on local government, such as city hall addresses, phone numbers, population, classes of government, and much more.  Click here to view the database online, or below to view information about the App for your mobile device:
• iPhone
• Android Phone
• Windows Phone

• NIGP 2014 Annual Forum: The National Institute of Governmental Purchasing (NIGP) will hold their Annual Forum in Philadelphia from August 23-27, 2014.  They have developed a very useful App for attendees with information about:

• Names and agencies of all attendees (ability to create a list of your contacts)
• Times, locations, speaker information, presentation material for workshops and other events (ability to create your own schedule for what you'll be attending)
• Names and locations of exhibitors
• Floor plans
• And more

• iPhone
• Android Phone

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

Upcoming Training at NIGP Forum in Philadelphia

I will be teaching two all-day courses in August just before the start of NIGP's Annual Forum in Philadelphia:

• When Bad Things Happen to Bids: Strategies for Ensuring a Successful Public Construction Project (Friday, August 22, 2014)

• Tools for Ensuring Contractor Performance on Public Construction Projects (Saturday, August 23, 2014)

Information and registration:  To see an outline of each of these classes and/or to register, click on the links above.

Other locations:  I've also taught these classes in other states around the country and will be teaching them later this year in Maryland, Colorado, Texas, and Arizona.  In addition, I teach a class entitled "Best Practices in Developing Public Construction Bid Documents" and will be teaching it later this year in Texas and Georgia.

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

NJ Prohibits Financial Statements in Bid/Proposal Processes

The New Jersey legislature has approved a bill that would prohibit public agencies from requiring bidders and proposers from submitting a financial statement if a bid guaranty (bid bond, cashier's check, certified check) is submitted. A bid guaranty is a measure of protection for the public on the financial viability of the bidder/proposer.

Unanimous support:  A-1794 passed both the New Jersey Senate and Assembly unanimously in June 2014.  

Purpose of bill:  The bill was promoted as a means to encourage small businesses to participate in public contracting, and not impose on businesses an often onerous, costly, and time-consuming process of obtaining and providing a financial statement to demonstrate financial viability.

Exception:  The bill includes an exception for any federally funded project that requires submission of a financial statement by bidders or proposers as a condition of a public agency receiving a grant.

Public records:  Prohibiting submission of financial statements also eliminates the situation in which confidential information must sometimes be disclosed under public records laws.

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

New State Prevailing Wages Effective August 31, 2014

The Washington State Department of Labor and Industries published updated prevailing wages on August 1, 2014.  According to WAC 296-127-011, the new prevailing wages will become effective 30 days later, or on August 31, 2014.

 

Effective Date for Projects:  For any public works project with a bid submittal deadline of August 31, 2014 or later, the new wage rates will be in effect.  For projects advertised prior to August 31, 2014, but which have a bid submittal date of August 31, 2014 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, 2014 or earlier are governed by the current prevailing wage rates dated March 5, 2013.  Labor and Industries publishes corrections to prevailing wages 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, 2014, 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, the best practice is 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.  Public agencies should ensure that language to this effect is reflected in their bid and contract documents.

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

Training in September: Washington Construction Law

21st Annual Washington Construction Law Seminar:  I've attended this seminar in previous years and always found it to be very helpful.  I will be attending again this year.

When:  September 18-19, 2014 (9:00 a.m. to 5:00 p.m.) 

Where:  

• Seattle, Washington (City University, 521 Wall Street)
• Or participate by a Live Webcast from your office

Agenda and Speakers:

• Federal Construction Law - New Developments (Bruce P. Babbitt)

• Washington State Public Works Competitive Bidding and Bid Protests (Arnold R. Hedeen)

• Key Clauses of Construction Contracts (Alan Bornstein)

• Integrated Project Delivery (Scott R. Sleight)

• Key State Tax Considerations for Construction Projects (George C. Mastrodonato)

• Building Information Modeling (BIM) (Brendan J. Peters)

• Construction Changes/Differing Site Conditions (John P. Ahlers)

• What Happens When Someone in the Chain Goes Bankrupt? (Jerry N. Stehlik)

• Discovery Issues in Construction Claims (Andrew L. Greene)

• Washington Construction Law - New Developments (Paul R. Cressman, Jr.)

• Claims Against Design Professionals (Stanton P. Beck)

• Design Professional Considerations (Blaine J. Weber)

• Ethical Considerations for Construction Lawyers (John A. Strait)

• Insurance in the Construction Industry (Todd C. Hayes)

• Lien and Bond Claims; Dealing with Sureties (Kerry C. Lawrence)

• Construction Mediation (Henry C. Jameson)

Cost: 

• $645 - Government employees
• Other fees for different categories
• The sponsor of this training, The Seminar Group, will provide my blog readers with a $50 per person discount off of the regular tuition rate.  Call The Seminar Group to register and mention Mike Purdy and the discount code "SPP50." 

Credits:  Approved for continuing education credits with:

• Continuing Legal Education (CLE) credits for Washington, Oregon, Idaho, California, Alaska
• Construction Risk & Insurance Specialists by IRMI
• AIA (American Institute of Architects)
• American Institute of Constructors
• Construction Management Association of America

Sponsored by:  The Seminar Group

Information and registration:  Click here.

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

New Law Exempts Some Contractors From Paying for an Affidavit of Wages Paid Form

The Washington State Legislature approved a new law that waives the fee for filing an Affidavit of Wages Paid for contractors on public works projects who are exempt from the requirement to pay prevailing wages. 

Who is exempt from prevailing wages?  According to WAC 296-127-026 the prevailing wage requirements of chapter 39.12 RCW do not apply to certain individuals:

1. Sole owners and their spouses
2. Any partner who owns at least 30% of a partnership
3. The president, vice-president, and treasurer of a corporation if each one owns at least 30% of the corporation

If one of the above-mentioned entities has employees, those employees must still be paid the applicable prevailing wages.

Filing Intents and Affidavits:  Even though some individuals, as noted above, are exempt from the prevailing wage requirements, the contractor must still file Statement of Intent to Pay Prevailing Wages and Affidavit of Wages Paid forms with the Department of Labor and Industries for approval.  Public agencies must have a copy of the approved Intent for the contractor and all subcontractors prior to making payment to the contractor, and must have the approved Affidavit from the contractor and all subcontractors prior to release of retainage. 

New law makes some Affidavits free:  Under the provisions of Substitute House Bill 1254 that was approved during the 2014 legislative session, and is now included in RCW 39.12.070, individuals who are exempt from paying themselves prevailing wages (see above) must still file the Intent and Affidavit, and pay the $40 for each Intent, but the $40 fee for the Affidavit will not be charged by Labor and Industries.  The new law became effective on June 12, 2014.

More information:  Click here to read a Question and Answer page developed by the Department of Labor and Industries.

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