Public Works Contract Training

Working with the Municipal Research and Services Center (MRSC) who is under a contract with the Washington State Department of Transportation, I provided training all day on Thursday, April 8, 2010 to about 45 public works and contracting professionals from central and eastern Washington.  The training was held in Richland, Washington.

Here's an outline of the topics I covered:

Risk Management Tools: Insurance, Bonds, and Retainage

• Types of Insurance
• Occurrence vs. Claims Made
• Insurance Documentation and Endorsements
• Bid Bonds
• Payment and Performance Bonds
• Contractor's Registration Bond
• Retainage Bonds
• Purpose of Retainage
• Retainage and Sales Tax
• Options for Managing Retainage

Bidder Responsibility and Bid Responsiveness

• What is Bidder Responsibility?
• The Difference Between Responsibility and Responsiveness
• Bidder Responsibility Before 2007
• Statute Changes to Bidder Responsibility in 2007
• Mandatory Bidder Responsibility Criteria
• Subcontractor Responsibility Criteria
• Supplemental Bidder Responsibility Criteria
• What Are the Interests of Stakeholders?
• Is Bidder Responsibility Working?
• Abuses of Supplemental Bidder Responsibility Criteria
• The Future of Bidder Responsibility
• Principles of Bid Responsiveness
• 9 Bid Responsiveness Issues

Bidding and Contract Documents:

• 2 Dozen Things to Remember

Construction Change Orders:

• 7 Tools to Prevent Change Orders
• 4 Elements of Change Orders
• Authorization of Change Orders
• Advantages of Work by Change Order
• Reasons for Change Orders
• Appropriate Uses of Change Orders
• What is a Cardinal Change?
• Evaluation of Change Order Requests
• 3 Methods for Negotiating Change Order Prices

Public Works Contract Close-out: Claims Against Retainage and Bond:

• Completion Date Terminology
• Notification to State Agencies and the Public
• Filing, Renewing, and Releasing Claims
• Pre-Claim Notices for Suppliers
• Foreclosure and Payment
• When to Release Retainage
• Issues and Drafting Problems with SHB 1555 (2009 Legislation)
• Preventing Payment Disputes

Please contact me if you would like training on these or other subjects.

Reasons for a Sole Source

What are valid reasons for including a sole source product in a public works specification?

In evaluating whether a product should be a sole source, it is important to balance the business and operational needs of the agency with the expectation that public contracting will be open to as many firms as possible.

Here are a couple of reasons that may, depending on the facts, be part of a justification for including a sole source product in a public works project.

• Public Agency’s Needs:  Only one product available that meets owner’s performance objectives and operational needs
• Franchise:  Product is available only from one distributor because of a geographic franchise
• Warranty:  Using another product would void a warranty
• Compatibility with other equipment, hardware, or systems
• Operational Impact:  Negative operational impacts
• Parts:  It is in the agency's best interests to limit the number and type of parts it is required to stock
• Training:  Training and operational efficiencies from having to train staff on only one system or product

6.Any sole source product should be justified in writing and approved by the appropriate individual at the public agency.  Justifying a sole source is very dependent on the specific facts of a situation.

Annual NIGP Forum

The 65th Annual Forum of the National Institute of Governmental Purchasing (NIGP) will meet in San Antonio, Texas from August 12 - 17, 2010.  

Early registration ends on April 30, 2010.

For more information and to register, visit NIGP's website.

Repeal of 3% Federal Withholding Urged

Unless Congress acts to repeal previously adopted legislation, effective January 1, 2012, all federal, state, and local governments will be required to withhold 3% of every payment to vendors, contractors, and consultants and send the money to the IRS.  The intent of the legislation is to reduce underreporting of the payment of taxes due.

The National Association of State Procurement Officials (NASPO) recently went on record urging Congress to repeal the legislation, calling it "an administrative and record-keeping nightmare."

For more information, click on any of the following links:

• Issue Brief by NASPO on the need to repeal the legislation
• Government Withholding Relief Coalition

Without repeal of this legislation, there are significant negative impacts to both government agencies and businesses. 

Training: Ethics 101 and Writing Effective Scopes of Work

I was in Richland, Washington on April 6, 2010 conducting training for Energy Northwest on two subjects: "Ethics in Public Contracting" and "Writing Effective Scopes of Work." 

Here's a summary outline of the 4.5 hours of training:

Ethics in Public Contracting

• Public Service is a Public Trust
• 5 Keys to Making Ethical Decisions
• What's So Important About Appearances?
• Why Do We Have Public Contracting?
• 4 Risks of Ethical Lapses
• Is It a Conflict of Interest?

Writing Effective Scopes of Work

• 4 Questions to Ask
• The Importance of Clear Scopes of Work
• Tips for Writing Scopes
• What Should be Included in a Scope of Work?
• Should I Write a Detailed Scope or Performance-Based Scope?
• What Are Valid Reasons for a Sole Source or Proprietary Scope?
• How Detailed Should the Scope Be?  4 Issues to Address
• Resources to Help in Developing Scopes of Work

Energy Northwest is a Joint Operating Agency that provides electricity at cost to 28 member public utilities in the State of Washington, and operates as a public agency.

Please contact me if you are interested in me providing this training, or other training for your organization.

ABA Procurement Symposium

The Public Contract Law Section of the American Bar Association (ABA) is sponsoring its 5th Annual State and Local Procurement Symposium on May 14-15, 2010 in Seattle, Washington (Renaissance Seattle Hotel).  

The topic of the symposium is "Pointing the Way: State and Local Procurement in Challenging Times."

Program sessions include the following:

• There's No Such Thing as a Free Lunch: The Obligations That Come With ARRA Funds
• Back to the Future: Technology and the New Decade of State and Local Procurement
• State and Local False Claims Acts: Identifying, Prosecuting, and Defending Procurement Fraud Claims
• State and Local Efforts to "Go Green"
• Rising to New Heights: Trends and Lessons Learned in State and Local Bid Protests

For more information and to register, visit the ABA's website.

CPARB Survives Budget Axe

Steve Goldblatt, recently retired, longtime University of Washington Construction Management faculty member specializing in design and construction law, has been covering the legislative scene in Olympia for more than 25 years.

In this guest blog entry, Steve summarizes one bill vetoed by Governor Chris Gregoire, and two bills signed by the governor.

Small Business State Purchasing vetoed: E2SHB 1096 would have required General Administration, Information Services, and Transportation to develop a plan for doubling the number of small businesses (no more than 50 employees or $7 million annual gross revenue, or certified by the Office of Minority and Women's Business Enterprises) receiving state contracts for goods and services by 2014. The original bill would have given a 7% bidding preference to such businesses.

Board and Commission Elimination: E2SHB 2617 (Chapter 7, 2010 Laws 1st Special Session) eliminates 45 boards and commissions effective various dates beginning June 30, 2010; excluding the Capital Projects Advisory Review Board (RCW 39.10.220) and the Capitol Campus Design Advisory Committee (RCW 43.34.080) which were in the original bill.

Small Business Compliance: 2SHB 2603 (Chapter 194, 2010 Laws) provides small businesses (no more than 250 employees or $7 million annual gross revenue) a copy of any state law or agency rule being violated and two business days' opportunity to correct the violation (Chapter 34.05 RCW) effective June 10, 2010.