Monday, July 24, 2017

New Mandatory Public Works Bidder Responsibility Criteria Effective July 23, 2017

The Washington Legislature adopted a new law (Senate Bill 5301) that adds an additional criterion to the list of mandatory bidder responsibility criteria that public agencies must verify and document before awarding any public works project, regardless of cost.  

Effective Date:  The new law became effective on July 23, 2017.  This means that public agencies must ensure that the required sworn statement is obtained prior to award of the public works project. 

Minimum Wage Compliance by Bidder:  The new law establishes a new criterion relating to the contractor's compliance with the state's minimum wage laws.  It also dictates that, prior to award, the contractor must sign a statement that they have not violated the law within a three year period.
  • Criterion:  Here's the language from the law: "Within the three-year period immediately preceding the date of the bid solicitation, not have been determined by a final and binding citation and notice of assessment issued by the department of labor and industries or through a civil judgment entered by a court of limited or general jurisdiction to have willfully violated, as defined in RCW 49.48.082, any provision of chapter 49.46, 49.48, or 49.52 RCW."
  • Documentation:  Here's the language from the law on what is required for documentation: "Before award of a public works contract, a bidder shall submit to the contracting agency a signed statement in accordance with RCW 9A.72.085 verifying under penalty of perjury that the bidder is in compliance with the responsible bidder criteria requirement of subsection (1)(g) of this section.  A contracting agency may award a contract in reasonable reliance upon such a sworn statement." The reference to subsection (1)(g) refers to the "criterion" paragraph above.
Methods for Verifying Bidder's Compliance:  There are a number of options, some better than others, for how a public agency can obtain the required sworn statement from the bidder whose bid is under consideration by the public agency for award. I recommend use of the first option listed below.

  Include Sworn Statement on Bid Form:  This option is the easiest administrative method and least risky option.  I recommend use of this option.  Under this option, a public agency would include the following statement as part of the Bid Form:  "The undersigned Bidder hereby certifies that, within the three-year period immediately preceding the bid solicitation date for this Project, the bidder is not a “willful” violator, as defined in RCW 49.48.082, of any provision of chapters 49.46, 49.48, or 49.52 RCW, as determined by a final and binding citation and notice of assessment issued by the Department of Labor and Industries or through a civil judgment entered by a court of limited or general jurisdiction."  In addition, the following language would need to be part of the signature block for the Bid Form: "I certify (or declare) under penalty of perjury under the laws of the State of Washington that the foregoing is true and correct."  This statement is necessary to comply with the provisions of the new law that dictates that the sworn statement must be in compliance with RCW 9A.72.085.

  Request Sworn Statement from Low Bidder:  Under this option, after bid opening, the public agency would request the low bidder submit the sworn statement after bid opening.  The Municipal Research and Services Center (MRSC) has developed a sworn statement for this purpose.  Click here to visit MRSC's website where you can click on the link for "model certification form."  This is an additional step for the public agency that can be eliminated by including the sworn statement on the Bid Form (see option above). While I don't recommend this option because it is an additional step, there is nothing inherently wrong with this option.

  Include Sample Sworn Statement in Bid Documents:  Under this option, a public agency would include MRSC's model certification form as a sample in the bid documents.  The public agency would still be required to obtain the signed form from the low bidder prior to award, which represents an additional step like the option immediately above. It could be confusing for bidders whether they are required to submit the sample with the bid or after bid opening.  I do not recommend this option.

  Require Separate Sworn Statement be Submitted with the Bid:  Using MRSC's model certification form, under this option, the bid documents would require that the signed sworn statement be submitted with the bid.  This is not a good option, as it increases the risk that a bidder (the low bidder) will fail to submit the sworn statement with the bid, thereby rendering the entire bid non-responsive and unable to be considered further.  Using best practices for public works bidding, public agencies should limit the number of documents submitted with the bid to the Bid Form, bid guaranty, subcontractors list if the project is estimated to cost $1 million or more, and any documents required by federal or state grant provisions. I strongly recommend that public agencies not use this option. 

Other Mandatory Bidder Responsibility Criteria:  The new law adds compliance with minimum wage laws to the existing list of mandatory bidder responsibility criteria that public agencies must verify and document prior to award of any public works project.  The other criteria may be found in RCW 39.04.350.  Review your agency's practices to ensure that you have a process to verify and document the mandatory bidder responsibility criteria for all public works projects. 

Other New Public Works Laws:  See my blog from April 17, 2017 for a description of five new public works laws that do the following:
  • Increases the dollar threshold for when a payment/performance bond may be waived
  • Grants subcontractors additional rights to have retainage released early through a retainage bond
  • Adds an additional criterion to the list of mandatory bidder responsibility criteria
  • Authorizes Public Utility Districts to contract for on-call public works projects
  • Authorizes transit agencies (public transportation benefit area authorities) to use Job Order Contracting
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