Training: Developing and Managing RFPs and RFQs

On Wednesday, June 9, 2010, I had the pleasure of providing training on "Developing and Managing RFPs and RFQs" for about 20 contracting professionals from throughout the State of Washington.  

The training was sponsored by the Washington Transportation Training Coalition.

The agenda for the all day training included the following:

• Building the Public's Trust
• Planning the Procurement
• Standard Provisions and Concepts
• Conflicts of Interest
• Cost and Price Analysis
• Advertising Issues
• Pre-Submission Meeting
• Receiving and Opening Proposals
• Evaluation Committee
• Evaluating Proposals
• Managing Interviews
• Recommending Award
• Contract Negotiations
• Developing Scopes of Work

If you are interested in having me provide this training for your agency, or would like to be placed on a list for when I sponsor the training, please contact me.

Missouri Rejects Low Bid Not Submitted Electronically

The Missouri Highways and Transportation Commission rejected on June 2, 2010, as irregular the bid of low bidder, Steve & Associates, who failed to submit their bid electronically as required in the Missouri Department of Transportation (MoDOT) standard specifications.  

Instead the Commission awarded the contract to the second low bidder, Sam Gaines Construction, at a cost of $1.659 million, or $83,000 more than the low bid.

Specs Required Electronic Bidding Only:  At issue is the provision of section 102.3 of the standard specifications that states the following:

Any bid exceeding a monetary value of $250,000 shall be submitted electronically using the BidExpress website.  For any bid less than $250,000, bidders will be allowed to submit paper bids or submit bids electronically using the BidExpress website.  Any paper bids submitted with a bid exceeding $250,000 will be considered irregular in accordance with Sec 102.8.

Specs Defined Irregular Bids:  Section 102.8, Irregular Bids, of MoDOT's standard specifications states that:

"Bids that are not completed in accordance with the bidding documents, that show any omissions, false statements or certifications, alterations of form, additions not called for, conditional or alternate bids unless called for, irregularities of any kind, or that are not responsive to the request for bids may be rejected." 

The Irregularity in the Bid Was Immaterial:  Only bids that have a material irregularity must be rejected as non-responsive.  The test as to the materiality of an irregularity is whether it gives one bidder an advantage or benefit not enjoyed by other bidders.  

It seems to me that the low bidder in this instance did not gain any advantage by submitting a paper bid.  Thus, the irregularity in Steve & Associates' bid appears to be immaterial.  

A public agency has discretion whether to accept or reject a bid with an immaterial irregularity, while a material irregularity must be rejected as non-responsive.  In this instance, the Commission chose to reject the bid with an immaterial irregularity as non-responsive, at a cost to the public of $83,000.

Should the Bid Have Been Rejected as Non-Responsive?  While I don't have all of the documents related to the bids submitted to MoDOT, Section 102.8.2 of MoDOT's standard specifications would tend to support the fact that the Commission should not have rejected the bid as non-responsive.  It states the following: 

"A bid submitted on the "Request for Bid" document and that is otherwise complete and fully executed, will not be deemed an irregular bid and will not be subject to rejection by the Commission."

Presumably, Steve & Associates submitted their bid on the "Request for Bid" form, and perhaps their bid should not have been rejected.  

Bid Protest Coming?  Steve & Associates is considering filing a bid protest, arguing that they were twice told by MoDOT personnel that it was acceptable to submit a paper bid.

For More Information:

•  Click here to read a news article in The Fulton Fun newspaper.

• I have requested MoDOT to send me documents related to this bid and the Commission's action.  If there are additional facts that surface, I will be sure to report those in a future blog entry.

New Orleans Reforms Corrupt Contracting Practices

New Orleans Mayor Mitch Landrieu announced a series of significant contracting reforms on June 3, 2010, designed to make selection of consultants and contractors more transparent and open to the public. 

The changes follow years of questionable practices by previous mayors.  Mayor Landrieu noted that "We are going to institute a new way of doing business...to restore credibility and faith that the public should always have in the way government handles its money."

Chief Procurement Officer:  A new Procurement Office headed by a Chief Procurement Officer position will be created to implement and manage the contracting reforms and new processes.  Click here to read the mayor's Executive Order MJL 10-04 on this subject.

Consultant Selection Practices:  A key change will shift the decision making for selection of professional service consultants, such as architects and engineers, away from the mayor.  Instead, a selection committee of five high-ranking city employees will make a recommendation to the mayor.  The mayor will be required to either sign a contract with the recommended firm or state in writing why he is not doing so.  If the mayor does not agree with the selection committee recommendation, a new procurement process must be conducted.  

The selection committee will be subject to open public meetings and public records laws.  The new consultant selection procedures will apply to all contracts of $15,000 or more.  The ten page Executive Order also details procedures for development of standardized RFPs and RFQs, advertisement, selection criteria, and contract negotiations.  Click here to read the mayor's executive order MJL 10-05.

Disadvantaged Business Enterprises (DBE):  One of the mayor's Executive Orders establishes a provisional certification program for DBEs, creates an advisory committee to reform and strengthen the City's DBE program, creates a contract review committee for procurements, commissions a disparity study, and explores the creation of a surety fund for bonding DBEs.  Click here to read the mayor's Executive Order MJL 10-02.  

Another of the mayor's executive orders creates a new position of Director of Supplier Diversity.  Click here to read this Executive Order MJL 10-03.

Other Information:

• For a June 3, 2010 news article about the new contracting regulations in The Times-Picayune, click here.
• For a June 6, 2010 editorial in the The Times-Picayune, click here.
• For a history of some of the contracting scandals that have plagued the City of New Orleans, click here.

Training: Oregon Public Contracting and Purchasing Laws

The League of Oregon Cities is sponsoring a free all day (9:00 a.m. to 3:00 p.m.) training session on Oregon Public Contracting and Purchasing Laws.

When and Where:

• June 11, 2010, Medford, Oregon
• June 15, 2010, La Grande, Oregon

Instructor:

• Alexandra Sosnkowski

 Course Topics:

• Oregon's Public Contracting and Purchasing Laws (overview of Oregon's public contracting and purchasing and model public contracting, Legislative update of recent important changes to the statutes and rules)
• Identifying Public Contracts (personal services, goods and services, public improvements, social media issues relating to public contracts)
• Public Contract Procurement (defining procurement, bids vs. proposals, public contracting exemptions, handling bid protests)
• Local Public Contracting Codes (defining local contract review board and local contracting agency, creating or updating a local public contracting code)

For more information and to register, click here.

New Law on Subcontractor Selection on GC/CM Projects

An alternative process for selecting mechanical and electrical subcontractors on GC/CM (General Contractor/Construction Manager) projects in Washington State will become effective on June 10, 2010, and mirrors closely how public agencies are required to select GC/CMs.  

Qualifications and Price-Based Selection:  Under the provisions of Senate Bill 6401 approved by the Washington State Legislature, selection of these key subcontractors would be based partially on qualifications and partially on their prices for their fee (overhead and profit) and fixed costs for specified general conditions work.  The concept permits the early selection of mechanical and electrical subcontractors in order to create a tighter working partnership between the GC/CM, the owner, and the subcontractors.

Options for Subcontractor Selection:  The default position for GC/CMs to select subcontractors is for them to be competitively bid under the provisions of RCW 39.10.380 after negotiation of the Maximum Allowable Construction Cost (MACC) between the owner and the GC/CM.  There are two other alternatives available under RCW 39.10.370 for early subcontract bidding by the GC/CM.  SB 6401 adds a fourth subcontractor selection process.

Additional Information:

• I've developed a summary of the four options for subcontractor selection under GC/CM, as well as an outline of the provisions of SB 6401 that permits the selection of mechanical and electrical subcontractors on the basis of qualifications and price.  Click here to read this five page document.

• Senate Bill 6401 

Agencies Shift to Electronic Rosters

More and more public agencies are making the decision to shift their consultant, contractor, and vendor rosters to web-based rosters, abandoning hard copies of the files.  

There are many benefits for both the business community and for public agencies.  Electronic rosters allow agencies to search for businesses more effectively than with hard copies, and may open up business opportunities to firms that otherwise would not be known to government agency staff.

There is also a trend for public agencies to create common rosters used by many agencies.  This represents a good use of technology by reducing the level of effort required for businesses to be listed on rosters for multiple agencies.

In Washington State, there are two major electronic rosters with multiple agencies, each with strengths and weaknesses:

• eCityGov Alliance - Shared Procurement Portal

• Municipal Research and Services Center (MRSC)

The University of Washington's Capital Projects Office recently signed an agreement to join the eCityGov Alliance's Shared Procurement Portal for the selection of architectural, engineering, and related consultant services.    

Click here to read an article in the Seattle Daily Journal of Commerce about the UW's use of the new roster.

People in Transition - Promotions and New Hires

The University of Washington, Sound Transit, and the Port of Longview all recently hired new people in key contracting and purchasing management positions.

University of Washington:  Judy Giniger, formerly the Contracts Administrator in the UW's capital projects office, was promoted to Contracts Manager to replace me when I retired in early February.  Mandy Bender was hired as the new Contracts Administrator in May.

Sound Transit:  Linneth Riley-Hall, a veteran City of Seattle employee who served as the City's Director of Contracting Services, was hired by Sound Transit as Construction Contracts Manager in April.

Port of Longview:  Kara Metzger, formerly a budget analyst with Cowlitz County, was hired in April by the Port of Longview as their new Purchasing Manager.