My Last Regular Blog Posting

Dear Friends and Colleagues,

As I wrote in my blog of January 11, 2015, I have decided to stop writing regular blog postings as part of scaling back my consulting and training work, and to give me more time to focus on other interests such as writing.  After March 5, 2015, the day of my last regular blog posting, I will still be accepting consulting and training opportunities.

Last Blog:  This will be my last regular posting on Mike Purdy's Public Contracting Blog.

Blog will remain online:  My Public Contracting Blog will remain online at http://PublicContracting.blogspot.com where you can still search by keywords and research topics based on the subject index.

Focus on Presidential History:  I will be writing more frequently for my Presidential History Blog.  

• Blog:  If you’re interested in this, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  

• Video:  Be sure to watch the entertaining and educational 6 minute "Presidential History News" video that my son and I developed that is on the www.PresidentialHistory.com website.  It delivers "live" news coverage of key moments in presidential history. This first video tells the surprising story of the presidential election returns for 1916 between incumbent Woodrow Wilson and challenger Charles Evans Hughes.

• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

I hope that my Public Contracting blogs over the last almost eight years have been helpful for you in managing the important work of public procurement and contracting. 

All the best,
Mike

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Free Webinar: How To Pick The Right Contractor For Your Construction Project

Webinar:  How To Pick The Right Contractor For Your Construction Project

When:  April 2, 2015 (2:00 - 2:30 pm, Pacific Time) 

Cost:  Free 

Speaker:  Greg Guedel, Attorney at Foster Pepper 

Information and Registration:  Click here.  Register by March 27, 2015.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Avoiding Closed Door Selection of a GC/CM Contractor

GC/CM (General Contractor/Construction Manager) is one of three alternative public works contracting methods authorized in the State of Washington.  It is a form of what is generically known in the industry as Construction Manager at Risk.  Some states refer to it as CM/GC (Idaho and Oregon), or CM at Risk, or CMAR, or CMR.  There are differences in how this form of public works contracting is implemented. 

3 step selection process for GC/CM:  In Washington, the GC/CM is selected based on a combination of their scores for their proposal, their interview (not required by state law but highly recommended), and their price for their Percent Fee and Specified General Conditions costs.  At each stage of this three step process, a public agency may further reduce the number of firms who will move to the next step.  In some states, such as Idaho, price may not be used as part of the selection process for the CM/GC. 

Previous scores must be disclosed at bid opening:  By state law, finalist contractors who are asked to submit their price for the Percent Fee and Specified General Conditions must be told the number of points they have received for the proposal and interview at the bid opening for their prices.  RCW 39.10.360 (4) states (in part) the following: "At the time and place named, these bids must be publicly opened and read and the public body shall make all previous scoring available to the public."  This provision in the law is intended to prevent public agencies from modifying scores for the proposals and interviews in order to have their favored contractor win the most number of points.  The law is intended to ensure that the GC/CM selection process is a fair and transparent process.

Don't disclose scores early:  Some public agencies using the GC/CM process have made a different mistake and that is to publicly disclose the scores for the proposals and interviews to the finalist contractors before bids are due.  This practice enables contractors to determine how low their price must be to win the project.  This may result in a contractor bidding the project so low in order to get the highest number of points that there is not enough money in the project for them to make money, be successful, and complete the project.

Complexities of GC/CM:  GC/CM is a great project delivery tool, but it must be carefully developed and managed by the public agency.  Without being aware of some of these issues and how the different cost categories for GC/CM work, a public agency may be at a significant disadvantage in using this process. 

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Is It a Bid or An RFP?

What's the difference between a Bid and a Proposal, or between an Invitation to Bid and a Request for Proposals (RFP)? 

Invitation to Bid:  Public agencies that issue an Invitation to Bid (or a Request for a Quote) have defined a specific scope of work for which they are requesting bid prices.  Making the decision of award will be based on price alone.  In other words, the bidder with the lowest price, who has submitted a responsive bid (on time, signed, bid on all items, bid guaranty included if required, etc.) will be awarded the contract. 

Request for Proposal:  On the other hand, in an RFP price is part of the evaluation criteria that will determine which firm is awarded the contract, but the evaluation criteria also include experience, qualifications, and approach to the work.  The firm submitting the lowest price may not have the highest number of overall points and may not be the one awarded the contract.  Conversely, in an RFP a firm submitting a high price may end up being awarded the contract based on receiving more points for the evaluation criteria for experience, qualifications, and approach.  

How much is price worth?  In an Invitation to Bid, price is the only factor considered in making an award decision, while with an RFP price is one of many factors.  To the extent that the scope of work in an RFP is very clearly defined, price should be worth a higher percentage of the overall points available as this begins to look more like a bid.  To the extent that the scope of work in an RFP is less clearly defined and the public agency is relying more heavily on the judgment of the firm selected, it becomes more important that qualification, experience, and approach have more evaluation points assigned to them.  Click here for a blog that I wrote explaining this in more detail.  Click here to read about the misguided efforts of Jefferson Parish, Louisiana setting price at 25% on all RFPs. 

Evaluation criteria: It takes time to develop appropriate evaluation criteria that reflect the actual values and concerns of a public agency and that will result in the most qualified firm being selected.  Evaluation criteria must be clear to firms submitting a proposal so they understand what the expectations are for what is most important to the public agency.  In establishing evaluation criteria for an RFP, the following should be part of what is published in the RFP:

• Title for the criteria
• Detailed description of the criteria
• Number of points possible for each criterion
• Documentation that should be submitted to demonstrate compliance with the criteria

Transparency is important:  If a public agency issues an Invitation to Bid (or a Request for a Quote), and price is the only thing requested, the expectation is that the agency will make an award decision based only on price.  An agency may not, after bids have been received, then disclose subjective evaluation criteria they will use to make an award decision.  If this seems obvious to many of you, it's important to bring this up because I have seen this improper practice occur.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

New Prevailing Wages Effective March 4, 2015

The Washington State Department of Labor and Industries published updated prevailing wages on February 2, 2015.  According to WAC 296-127-011, the new prevailing wages will become effective 30 days later, or on March 4, 2015. 

Effective Date for Projects:  For any public works project with a bid submittal deadline of March 4, 2015 or later, the new wage rates will be in effect.  For projects advertised prior to March 4, 2015, but which have a bid submittal date of March 4, 2015 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 March 4, 2015 or earlier are governed by the current prevailing wage rates dated August 31, 2014.  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 March 4, 2015, 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.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Court Rejects Owner's Claim Against Bonding Company

After repeated performance deficiencies by a contractor, a public agency in Pennsylvania terminated the contract and filed a claim against the surety that issued the performance bond.  

Owner didn't provide notice and opportunity to cure:  After multiple court motions by both the Milton Regional Sewer Authority (MRSA) and Travelers Casualty & Surety Co. (Travelers), the U.S. District Court ruled in favor of the surety, affirming that MRSA had failed to provide the contractor with proper notice of the performance deficiencies and give them an opportunity to cure the problems prior to termination.  

Owner argues material breach the contract:  MRSA argued unsuccessfully that they were not required to provide the notice and give the opportunity for the contractor to cure the deficiencies because the contractor's lack of performance constituted a material breach of contract that would have allowed them to terminate without the notice and cure processes.   

Court rules no material breach of contract:  The Court disagreed with MRSA, ruling that the deficiencies cited by MRSA did not constitute a material breach of contract.  The contractor was guilty only of "poor performance of the contract, which is precisely within the contemplation of the cure provision in the contract." 

More information:  

• June 24, 2014 Court decision

• Article: "U.S. district court in Pennsylvania dismisses owner's claim against performance bond surety - repeated instances of poor performance by contractor were not so material as to allow owner to terminate without providing cure notice," by James M. Kwartnik, Jr, Attorney with Pepper Hamilton LLP, November 25, 2014 

Lessons learned:  If a contractor is not performing consistent with the contract documents, public agencies should:

• Document:  Thoroughly document deficiencies and the contractor's actions that are at variance with the contract documents.

• Keep surety informed:  Communicate clearly and often with the bonding company about the deficiencies.

• Abide by notice and cure provisions:  Follow the notice requirements of the contract for providing the contractor with the opportunity to cure deficiencies.

Presidential History:

• Presidential History Blog:   While I will discontinue writing my Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Using Volunteers on Public Works Projects

In Washington state, RCW 35.21.278 addresses the question of when volunteers from a community service organization may be used on a public works project. 

Do competitive bidding requirements apply?  This state law enables certain types of public agencies to contract with certain community service organizations for certain public works projects without going through a competitive bidding process to select the community service organization.

What public agency types are covered?  The state law gives authority only to the following public agency types:

• County
• City
• Town
• School district
• Metropolitan park district
• Park and recreation district
• Port district
• Park and recreation service area

Other types of public agencies are not covered by this law.

What is a community service organization?  The law states that an authorized public agency may contract with the following types of organizations:

• A chamber of commerce
• A service organization
• A community, youth, or athletic association
• Other similar association located and providing service in the immediate neighborhood

What type of work can be performed?  The law provides that an authorized public agency can contract with an authorized community service organization for the following services:

• Drawing design plans
• Making improvements to a park, school playground, public square, or port habitat site
• Installing equipment or artworks
• Providing maintenance services for a facility or facilities as a community or neighborhood project
• Environmental stewardship project

Can volunteer expenses be paid?  The authorized public agency may reimburse the contracting association its expense.  "The contracting association may use volunteers in the project and provide the volunteers with clothing or tools; meals or refreshments; accident/injury insurance coverage; and reimbursement of their expenses." 

How much can the public agency reimburse for expenses?  "The value of the improvements, artworks, equipment, or maintenance shall have a value at least equal to three times that of the payment to the contracting association."  In other words, if the reimbursable expenses to be paid by the public agency for an improvement was $2,000, the value of the actual improvement would have to be at least $6,000. 

Are there other dollar limitations of how much can be reimbursed?  On an annual basis (not on a per project basis or community service organization basis), an authorized public agency may reimburse all community service organizations only up to a maximum of $25,000, or $2 "per resident within the boundaries of the public entity, whichever is greater."

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Avoiding Conflicts in Bid Documents

Most public agencies have developed standard language for public works construction bid documents that includes Instructions to Bidders, the Contract, and General Conditions, often referred to as "front end documents." 

Conflicting requirements:  Architects and engineers hired by a public agency to design the public works construction project often include contractual terms and conditions as notes on the plans or in the technical specifications.  These terms and conditions are often in conflict with the standard bid and contract language provided by the public agency. 

Strategies:  In order to avoid such conflicts, here are a couple of strategies that agencies may use:

• Review designer documents:  It is important for public agencies to carefully review the plans and specifications provided by architects and engineers to ensure they do not conflict with the agency's standard terms and conditions.

• Educate designers on agency requirements:  Agencies should work with their architects and engineers to ensure they understand what is in the agency's terms and conditions.  Designers should be directed not to modify or include provisions that on the plans or in the technical specifications that conflict with the agency's standard requirements.

 

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Training: Building Information Modeling (BIM): Reducing Conflicts in Advance

Building Information Modeling (BIM): Reducing Conflicts in Advance 

More and more public agencies, contractors, and architects/engineers are using the tools afforded by BIM to identify conflicts during design before construction, and help with building operation and maintenance issues.  However, there are a host of questions about the impacts of this 3D modeling software both legally and practically. 

When: March 20, 2015 (8:00 am to 12:00 pm - Pacific Time) 

Where: 

• Seattle, Washington (Hotel 1000, 1000 First Ave), or by

• Webcast from your office

Cost:

• $250 (government / non-profit
• Other fees for other categories

Agenda:

• Introduction: Why BIM - Why Now?
• The Past and Future of BIM
• The Legal Side of BIM
• Managing BIM and the BIM Execution Plan
• BIM from the Owner's, Contractors, and Design Professional's Perspective
• BIM and Integrated Project Delivery (IPD; What's the Difference?
• BIM Coordination Solves the Problems That Cause Disputes

Information and registration:  Click here to go to The Seminar Group's website.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Comprehensive Website for Federal Contracting Issues

I recently became aware of an excellent website (Government Contracts Resources) that provides federal contracting resources - something applicable whether you are dealing with a federally funded project or the work is for a federal agency.

Summary:  Here's a summary of some of the valuable information provided on the website:

• Protests
• Contract Disputes
• Statutes
• Regulations
• Executive Orders
• Federal Agency websites
• Research websites

Visit:  Check out Government Contracts Resources and see how it might be useful to you.  I've also added it as a link on my website with other helpful references.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Seminar - Lessons Learned from the White House Reconstruction Project

Barely Avoiding Disaster

Lessons Learned from the White House 

Reconstruction Project

During Harry Truman's Presidency

When and Where:

•  April 21, 2015 (3:00 pm to 4:30 pm
• Bell Harbor International Conference Center, Seattle, WA
• Sponsored by Puget Sound Chapter CSI (Construction Specifications Institute)

•  May 7, 2015 (time to be determined)
• Spokane Convention Center, Spokane, WA
• Sponsored by WASBO (Washington Association of School Business Officials)

Speaker:  Mike Purdy 

Description:  The groaning and creaking of the White House that Harry Truman thought were ghosts of previous Presidents haunting the famous residence turned out to be the complete failing of the interior beams and walls of the building that had been rebuilt after it was burned by the British in 1814.  Had action not been taken in the 1950s to gut and rebuild the entire interior of the building, it is likely that it would have collapsed in on itself bringing down the sandstone exterior walls as well.

Rebuilding the Interior of the White House

One would expect that a renovation project of this politically and historically significant home would have been an orderly and well managed project that would be completed on budget and on time.

The opposite was true, and the project was fraught with a host of problems including:

• Political feuding about design and budget
• An arbitrary contractor pre-qualification process that resulted in a low bid that was shockingly low
• Significant delays in the architect producing drawings for the contractor
• Change orders that busted the congressionally authorized budget and required the President to plead for more funds
• Delays in schedule
• Inadequate staffing of the project
• A labor strike
• And more...

The White House reconstruction project serves as a helpful reminder of how not to manage a public works construction project, and in the process teaches us a number of important lessons.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.

• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Job Opening: Senior Buyer

King County, Washington

• Position: Senior Buyer

• Location:  Seattle, Washington

• Closing Date:  February 16, 2015 at 4:30 pm Pacific Time

• Salary: $68,577 to $86,923 Annually
  

• Job Summary:  Perform necessary purchasing procedures for the acquisition of supplies and services such as heavy equipment, large tools, motor vehicles, chemicals, fuel, industrial equipment and service contracts.  Coordinate purchasing procedures throughout departments and divisions.

• For More Information and to Apply:  Click here.

Presidential History:

• Presidential History Blog:   While I will discontinue writing my Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  I will only be accepting limited consulting and training opportunities on a case-by-case basis after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

How Detailed Must Plans and Specifications Be?

In developing public works construction bid documents - for either a small or large project - what principles should guide the level of detail and completeness of the documents?

3 principles:  There are three basic principles that should help drive the level of detail for preparing the plans and specifications:

• Level playing field:  The documents should be clear enough so that all bidders are making the same assumptions about the documents and what is required, without relying on bidders to come to their own different conclusions.  Because we typically bid public construction projects and award based on the low bid, the scope, schedule, and terms/conditions must be specified by the public agency and not left up to individual bidders.

• Accountability:  The plans and specifications should be clear enough so that the public agency is able to hold the contractor accountable for getting the project that was intended and needed.  Without this level of clarity, it may be difficult to ensure that the contractor performs consistent with the agency's expectations and needs.

• Permits and codes:  The bid documents should be clear enough so that the design is in compliance with all building codes and the project is able to receive the necessary permits from the appropriate authorities.

Presidential History:

• Presidential History Blog:   While I will discontinue writing my Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Figuring Out What Went Wrong With the Bid Process

Sometimes, the expectations of public agencies for a bid aren't met.  Perhaps only one or two bidders submitted a price, or maybe the bid prices were significantly higher than the funds available.  What are the options available to an agency to move a public construction project forward? 

Contact contractors:  One of the most important steps a public agency can take after bid opening is to talk with the bidders and determine why their prices were so high, and to talk with other contractors to find out why they chose not to bid the project. 

Questions to ask:  The following are some of the questions an agency might ask bidders and potential contractors about their bid prices and/or why they chose not to bid on the project:

• Ambiguity:  Were parts of the drawings and specifications unclear?  

• Schedule:  Was the project schedule unrealistic? 

• Risks:  Did contractors perceive the risk allocation for the project to be slanted too much toward the owner and disadvantageous to the contractor?

• Complexity:  Was the work to be performed high risk with new and untested tools for successfully accomplishing the work?

• Phasing:  Was the project structured in such a way that it includes complex phasing, scheduling, and staging of the work?

• Other projects:  Were there other projects being advertised at the same time, limiting the capacity of the contractors to bid on all of the projects?

• Federal requirements:  Were there federal requirements that discouraged competition or that inflated prices?

• Project duration:  Did the project duration require bidders to hold prices for a longer period of time that bidders were comfortable with?

• Insurance:  Were the insurance requirements too costly and/or difficult for contractors to obtain?

• Liquidated damages:  Did contractors view the liquidated damage amount per day as being too risky?

• Time of year:  Was the project bid at the wrong time of the year, resulting in higher prices?

• Labor and material prices:  Was price uncertainty and potential escalation a factor in the higher bid amounts?
  

Re-advertise the project: Based on discussions with the bidders and other contractors, an agency may take a number of steps:

• Change the requirements:  Modify the scope of work and other requirements based on concerns raised by the contracting community.

• Additives and Alternates:  Restructure the bid form to include Additives and/or Alternates as a bid protection tool so that all bids don't have to be rejected if there are adequate funds for awarding the base bid but not the Additive or Alternate work.

• Solicit contractors:  Reach out to qualified contractors and encourage them to submit a bid.

Find more money:  Sometimes, even with changes to the plans and specifications based on information obtained from contractors, more funding is still necessary to make the project financially viable.
 
Minnesota's troubled project:  The City of West St. Paul, Minnesota recently rejected all bids on a street reconstruction project estimated to cost $20.7 million when just two bids were received and the low bid was $7.7 million over the engineer's estimate.  Click here to read a well-written and revealing article from TwinCities.com on the project and what the city learned about the bid process.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory. 

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

"Question of the Day" for CPPB and CPPO Test Preparation

Preparing for the test:  Individuals who are actively pursuing the CPPB and CPPO certifications for public procurement professionals may be interested in a tool to help prepare for the test. 

How does it work?  You can receive a "question of the day" from David Nash, a former procurement official with the City of Fort Lauderdale, and an NIGP certified instructor. Questions are sent out daily to each person who registers.  Your answer goes only to David Nash and you find out how you did on the question.  There is no charge for this service. 

Get started:  Go to David Nash's website at qoftheday.net to obtain more information and to register.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory. 

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

How Not to Implement Bidder Responsibilty Criteria on a Project

Establishing bidder responsibility criteria on public works construction projects can be a good idea.  It helps ensure that the low bidder is, in fact, capable and qualified to successfully perform the work.  Some public agencies, however, go about implementing responsibility in ways that are counterproductive and lack transparency. 

City of Des Moines, Iowa:  In September 2014, the City of Des Moines adopted what they grandiosely call the "City of Des Moines Taxpayer Quality Assurance Policy."  It only applies for building or facility projects estimated to cost more than $1 million.  In essence, it is intended to be a bidder responsibility law, but it is flawed in a number of ways:

• More Prequalification than Responsibility:  The law requires that all contractors interested in bidding on a project must complete and submit "no later than two weeks prior to the deadline for accepting bids" a "General Contractor Quality Assurance Questionnaire" and respond to 26 questions.  Establishing bidder responsibility is generally determined after bids have been opened to assess whether the low bidder is responsible.  The City of Des Moines' questionnaire begins to look more like a prequalification process.

• All bidders must complete questionnaire:  Unlike bidder responsibility practices, the City is requiring all bidders to complete and submit the questionnaire.  Because of the length and complexity of some of the questions, this may cause some bidders to decide not to bid on city work, thus reducing competition and increasing prices, or to bid on the project but increase their prices to recoup their costs in completing the questionnaire and to deal with the hassle of bidding with the City.

• Responsiveness vs. Responsibility:  The City's practice of requiring the questionnaire prior to bidding makes submission of the form a matter of responsiveness initially before an analysis is even made of whether the bidder is responsible. In other words, if a bidder fails to submit the questionnaire by the deadline, presumably their bid is non-responsive. Documentation of bidder responsibility should never be made part of the bid process, but requested of the low bidder after bid opening.

• Questionnaire is subjective:  The questions asked by the City are not actual bidder responsibility criteria, but collects information about which the City does not disclose what the basis will be of their evaluation of the questionnaire.  In other words, to properly implement bidder responsibility, there must be actual criteria and standards, so that anyone looking at the documentation submitted should be able to come to the same conclusion about whether the bidder met the criteria or not.  

Misguided effort:  The City of Des Moines' attempt to ensure responsible bidders is ultimately misguided.  It creates a subjective process that will discourage competition and increase costs. The policy also attempts to fix a non-existent problem.  According to the City's engineers, "in general, the City of Des Moines has not experienced major issues in its public bid construction program." Click here to read an excellent and more detailed analysis of the City's law from the law firm of Fabyanske Westra Hart & Thomson. 

Use bidder responsibility criteria:  The preferred method for implementing bidder responsibility is to publish actual criteria in the bid documents, and to then request documentation from the low bidder a certain number of days after bid opening demonstrating that they meet the criteria.  Criteria should be crafted in such a manner to not unduly restrict competition, but to establish a baseline threshold of the ability of the bidder to successfully perform the work.  Click here to read "Suggested Guidelines for Bidder Responsibility" published by the State of Washington's Capital Projects Advisory Review Board.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory.

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Should Work Be Bundled Together Into 1 Project or Broken into Separate Projects?

How do you define a public works construction project?  Should work for multiple subcontractor trades be bundled together into one larger project, or should it be broken into smaller separate projects?   

Issues with a bundled project:  There are a number of issues associated with bundling work into one project: 

• Liability:  The general contractor, instead of the public agency, assumes the liability for performance of the entire project in accordance with the contract documents.

• Schedule:  The general contractor, instead of the public agency, is responsible for scheduling the work of the subcontractors in an appropriate sequence in order to complete the work on time. 

• Warranty:  Maintenance and warranty issues are simplified by having the general contractor as the public agency’s single point of contact for resolving warranty issues.

• Small Businesses:  May negatively impact the use of small, disadvantaged, minority, and women owned businesses who might not be able to bid a larger project. 

Issues with separate projects:  There are a number of issues associated with breaking work down into separate projects: 

• Schedule:  Managing the schedule for multiple subcontractors takes staff time for public agencies.

• Expertise:  Managing and overseeing all of subcontractor trades requires a level of expertise that may be beyond that of a government project and construction manager.

• Time for Managing Subs:  More administrative time is required for the public agency to manage all facets of construction with multiple subcontractors, rather than having the contractor manage it all.

• Audits:  Multiple contracts may result in more exposure to audits and potential violations of ordinances and policies.

• Procurement Regulations:  Splitting projects under bidding thresholds may violate procurement regulations, or at the least, give the appearance of inappropriate actions on the part of public agencies.

• Streamlined Award:  Splitting a project into smaller bids may be a more streamlined process for internal approval of an award, requiring fewer levels of approval.

• Cheaper:  No markup of subcontractor costs results in reduced direct costs for the public agency.

In the news:  A city manager in Georgia recently separated work out into multiple smaller projects less than $20,000 each in order to avoid obtaining approval of the city council for a larger project.  City of Covington city manager Leigh Anne Knight, also argued that it was done to save money, an argument that is difficult to prove.  The city’s planning director acted as the construction supervisor for the projects, leading the city council and mayor to assert that the planning director’s time would be better spent performing his duties as planning director.  The council will consider defining by ordinance what constitutes a “project.”  For more information about this story, click here.

Presidential History:

• Presidential History Blog:   While I will discontinue writing this Public Contracting Blog on March 5, 2015, you can sign up for a free email subscription to my Presidential History Blog at www.PresidentialHistory.com.  On a case-by-case basis, I will only be accepting limited consulting and training opportunities after March 5, 2015.

• Presidential History News:  Be sure to watch my 6 minute video at www.PresidentialHistory.com in which I report "live" on the election returns for the 1916 presidential election between Woodrow Wilson and Charles Evans Hughes.
  
  
• Twitter and Facebook:  Follow me on Twitter @PresHistory and "Like" my Facebook page at https://www.facebook.com/mikepurdypresidentialhistory. 

Mike Purdy's Public Contracting Blog
© 2015 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com