Basics of Construction Insurance - a Teleconference
When: October 7, 2008 (10:00 a.m. to 11:30 a.m. - Pacific Time)
Where: Your office - a teleconference
Cost: $219.00
Sponsored by: Lorman Education Services
For more information and to register, click here
Description: This teleconference will provide information on both General Liability Insurance and Builder's Risk Insurance, discussing what types of things are covered under each type of insurance and what the typical exclusions and endorsement are for both.
Instructors: Michael S. McNamara and Stephen D. Palley
Monday, September 29, 2008
Sunday, September 28, 2008
Next CPARB Meeting
The next meeting of the Capital Projects Advisory Review Board (CPARB) will be held on Thursday, October 9, 2008, 9:00 a.m. to noon.
Location: John L. O'Brien Building, Hearing Room A (504 15th Avenue, Olympia, WA)
Agenda includes: Reports from various task forces appointed to address specific issues. Task forces include those dealing with:
Location: John L. O'Brien Building, Hearing Room A (504 15th Avenue, Olympia, WA)
Agenda includes: Reports from various task forces appointed to address specific issues. Task forces include those dealing with:
- Prevailing wages for off-site prefabrication
- Expanding trades required to be included on subcontractors list (RCW 39.30.060)
- Best Value Procurement as a new alternative public works contracting procedure
- Job Order Contracting
- Pay undisputed claims promptly
Wednesday, September 24, 2008
New Prevailing Wage Scope of Work Descriptions to be Adopted
The Washington State Department of Labor and Industries will hold a public hearing on October 22, 2008 at 2:30 p.m. at the Department's headquarters in Tumwater, Washington (7273 Linderson Way Southwest, Room S117) to consider comments on three proposed new sections of the Washington Administrative Code. The sections would add a prevailing wage scope of work description for three trades that currently do not have such scopes: construction site surveyors, industrial power vacuum cleaners, and divers/diver tenders.
Comments must be received by October 22, 2008 to the attention of Sally Elliott, Specialty Compliance Services Division, PO Box 44400, Olympia, WA 98504-4400.
If you would like a copy of the proposed revisions to WAC 296-127, please contact me and I will e-mail it to you.
Training: Documentation and Proof of Construction Delay
Documentation and Proof of Construction DelayLive Teleconference Training (unlimited number of listeners per connection)
When: November 11, 2008, 10:00 a.m. to 11:30 a.m. (Pacific Standard Time)
Cost: $199 (if registered by October 7, 2008); $219 (if registered after October 7, 2008)
Sponsored by: Lorman Education Services
For more information and to register, click here
Instructor: J. Scott Lowe, P.E., Trauner Consulting Services, Inc.
Summary of topics:
- Schedules, Critical Path, Float
- Measurement and Determination of Delay
- Typical Construction Contract Time Extension Provisions
- Analyzing Delays that have yet to occur
- Analyzing Delays after they have occurred
- Documenting Delays
Thursday, September 18, 2008
Effective Management of Construction Contracts - Training
Effective Management of Construction Contracts - Training
When: Wednesday, December 10, 2008 (8:00 a.m. to 5:00 p.m.)
Where: Port of Tacoma (3600 Port of Tacoma Road, Tacoma, WA)
Registration Deadline: November 14, 2008
To Register, visit the website of the Washington State Chapter of NIGP
Sponsored by: NIGP
Cost: $225 (non-members and Washington State Chapter members); $160 (national members and chapter/national members)
Instructor: Darin Matthews, CPPO
Course Description: Construction contracts can represent a very significant expenditure of resources by public agencies and, thus a heightened liability. Historically, they have not been a type of contract routinely administered by public purchasers, which may expose the agency to higher levels of liability. This seminar will key in on areas of contract administration specific to construction conracting and how they can best be applied to limit risk and liability.
When: Wednesday, December 10, 2008 (8:00 a.m. to 5:00 p.m.)
Where: Port of Tacoma (3600 Port of Tacoma Road, Tacoma, WA)
Registration Deadline: November 14, 2008
To Register, visit the website of the Washington State Chapter of NIGP
Sponsored by: NIGP
Cost: $225 (non-members and Washington State Chapter members); $160 (national members and chapter/national members)
Instructor: Darin Matthews, CPPO
Course Description: Construction contracts can represent a very significant expenditure of resources by public agencies and, thus a heightened liability. Historically, they have not been a type of contract routinely administered by public purchasers, which may expose the agency to higher levels of liability. This seminar will key in on areas of contract administration specific to construction conracting and how they can best be applied to limit risk and liability.
Are Detailed Plans & Specs Required for Small Works Roster Projects?
How much detail is required for plans and specifications when bidding a public works project using the Small Works Roster process authorized by RCW 39.04.155?
Here's what the law states:
I would suggest there are three standards to pay attention to in determining how detailed the plans and specifications must be. They must be detailed enough to:
Here's what the law states:
- "Invitations for quotations shall include an estimate of the scope and nature of the work to be performed as well as materials and equipment to be furnished. However, detailed plans and specifications need not be included in the invitation. This subsection does not eliminate other requirements for architectural or engineering approvals as to quality and compliance with building codes."
I would suggest there are three standards to pay attention to in determining how detailed the plans and specifications must be. They must be detailed enough to:
- Obtain any necessary permits and comply with codes.
- Enable bidders to know what the project is and level the playing field so that each bidder is bidding on the same project without having to make assumptions about what the project entails.
- Hold the contractor awarded the project accountable for delivering the project that the public agency intends to have delivered.
Wednesday, September 17, 2008
Is Maintenance a Public Work?
There are a couple of critical questions surrounding the often confusing issues of public works, prevailing wages, maintenance, and ordinary maintenance.
1. Is "maintenance when performed by contract" (RCW 39.04.010) a public work and subject to prevailing wages, or is such work only subject to prevailing wages, but not a public work? The law states that "maintenance when performed by contract" is subject to prevailing wages. That shouldn't be in dispute. But is such maintenance a public work? These are two separate issues and it's important to make a distinction between them, not only because of what the law say, but because whether such maintenance is a public work affects more than just the wages required to be paid. It affects how public agencies bid and award such work. If "maintenance when performed by contract" is also a public work, then such work is subject to all of the bidding and other laws related to all other public works.
It seems to me that both the Washington State Department of Labor and Industries and the courts have inaccurately argued that "maintenance when performed by contract" is a public work. The reason I say they have been inaccurate is because when L&I adopted WAC 296-127-010 and when the Court of Appeals decided what is known as the Wheelabrator case (City of Spokane & Wheelabrator v. Department of Labor and Industries), both of them were focusing on whether "maintenance when performed by contract" was subject to prevailing wages. Thus, L&I, in WAC 296-127-010 defined "public work" as including "maintenance when performed by contract" when what they were trying to make a point of is what work was subject to prevailing wages. The purpose of this WAC is to deal with prevailing wages, not with bidding requirements. They were not focusing on, nor do they necessarily have the expertise on, or jurisdiction over, what the bidding laws should be for maintenance work.
Likewise, the Wheelabrator case dealt with whether a private contractor's employees, performing annual maintenance on a City of Spokane facility run by the contractor, should be subject to prevailing wages even the City paid for the maintenance. In my mind, the Wheelabrator case blurs the issue by stating that the maintenance work in question is a public work and therefore subject to prevailing wages. It seems that the court was only trying to make the case that the work was subject to prevailing wages. In the interest of enforcing what work is subject to prevailing wages, L&I and the courts have not recognized the impact on bidding statutes of making maintenance a public work.
I think L&I and the Wheelabrator case both took this approach because they saw the only way to make maintenance work subject to prevailing wages was to declare it a public work. I disagree as I think the language of RCW 39.04.010 speaks for itself. Not only is the language of RCW 39.04.010 clear in stating that there are two bodies of work subject to prevailing wages ("public works" and "maintenance when performed by contract"), but there is also the provision of RCW 39.12.020 that requires the payment of prevailing wages to building service maintenance employees (janitors) that no one argues is a public work. So it is possible to have work subject to prevailing wages that is not a public work. "Maintenance when performed by contract" falls into this category just like building service maintenance employees.
RCW 39.04.010 doesn't make a lot of sense if you argue that maintenance of any kind is a public work. RCW 39.04.010 defines a public work (in part) as follows: "'Public work' means all work, construction, alteration, repair, or improvement other than ordinary maintenance...All public works, including maintenance when performed by contract shall comply with chapter 39.12 RCW."
Note that in the listing of what is a public work, it doesn't mention that maintenance is a public work. It only states that "ordinary maintenance" isn't a public work. If the Legislature had intended that maintenance was to be a public work, they would have included maintenance in the listing of activities that were public works. The only mention of maintenance is that a certain kind of maintenance ("maintenance when performed by contract") is subject to prevailing wages, just as public works are subject to prevailing wage. The Legislature is silent on maintenance being a public work, only affirming that "maintenance when performed by contract" is subject to prevailing wages.
So how should public agencies respond to this confusing set of facts? Until the Legislature clarifies that "maintenance when performed by contract" is not a public work, but is subject to prevailing wages, I think public agencies should take the conservative approach (following WAC 296-127-010 and the Wheelabrator case) and treat "maintenance when performed by contract" as a public work, from a bidding perspective and recognize that such work is subject to prevailing wages.
2. The second big issue that needs discusssion, but not nearly as much as the first issue above is the distinction between maintenance and ordinary maintenance. This actually seems like an easier question to me. RCW 39.04.010 is clear that "ordinary maintenance" is not a public work. The law, however, doesn't define "ordinary maintenance." WAC 296-127-010 and the Wheelabrator case both seem fairly clear that ordinary maintenance is that work which is performed by public agency employees, and therefore not subject to prevailing wages.
1. Is "maintenance when performed by contract" (RCW 39.04.010) a public work and subject to prevailing wages, or is such work only subject to prevailing wages, but not a public work? The law states that "maintenance when performed by contract" is subject to prevailing wages. That shouldn't be in dispute. But is such maintenance a public work? These are two separate issues and it's important to make a distinction between them, not only because of what the law say, but because whether such maintenance is a public work affects more than just the wages required to be paid. It affects how public agencies bid and award such work. If "maintenance when performed by contract" is also a public work, then such work is subject to all of the bidding and other laws related to all other public works.
It seems to me that both the Washington State Department of Labor and Industries and the courts have inaccurately argued that "maintenance when performed by contract" is a public work. The reason I say they have been inaccurate is because when L&I adopted WAC 296-127-010 and when the Court of Appeals decided what is known as the Wheelabrator case (City of Spokane & Wheelabrator v. Department of Labor and Industries), both of them were focusing on whether "maintenance when performed by contract" was subject to prevailing wages. Thus, L&I, in WAC 296-127-010 defined "public work" as including "maintenance when performed by contract" when what they were trying to make a point of is what work was subject to prevailing wages. The purpose of this WAC is to deal with prevailing wages, not with bidding requirements. They were not focusing on, nor do they necessarily have the expertise on, or jurisdiction over, what the bidding laws should be for maintenance work.
Likewise, the Wheelabrator case dealt with whether a private contractor's employees, performing annual maintenance on a City of Spokane facility run by the contractor, should be subject to prevailing wages even the City paid for the maintenance. In my mind, the Wheelabrator case blurs the issue by stating that the maintenance work in question is a public work and therefore subject to prevailing wages. It seems that the court was only trying to make the case that the work was subject to prevailing wages. In the interest of enforcing what work is subject to prevailing wages, L&I and the courts have not recognized the impact on bidding statutes of making maintenance a public work.
I think L&I and the Wheelabrator case both took this approach because they saw the only way to make maintenance work subject to prevailing wages was to declare it a public work. I disagree as I think the language of RCW 39.04.010 speaks for itself. Not only is the language of RCW 39.04.010 clear in stating that there are two bodies of work subject to prevailing wages ("public works" and "maintenance when performed by contract"), but there is also the provision of RCW 39.12.020 that requires the payment of prevailing wages to building service maintenance employees (janitors) that no one argues is a public work. So it is possible to have work subject to prevailing wages that is not a public work. "Maintenance when performed by contract" falls into this category just like building service maintenance employees.
RCW 39.04.010 doesn't make a lot of sense if you argue that maintenance of any kind is a public work. RCW 39.04.010 defines a public work (in part) as follows: "'Public work' means all work, construction, alteration, repair, or improvement other than ordinary maintenance...All public works, including maintenance when performed by contract shall comply with chapter 39.12 RCW."
Note that in the listing of what is a public work, it doesn't mention that maintenance is a public work. It only states that "ordinary maintenance" isn't a public work. If the Legislature had intended that maintenance was to be a public work, they would have included maintenance in the listing of activities that were public works. The only mention of maintenance is that a certain kind of maintenance ("maintenance when performed by contract") is subject to prevailing wages, just as public works are subject to prevailing wage. The Legislature is silent on maintenance being a public work, only affirming that "maintenance when performed by contract" is subject to prevailing wages.
So how should public agencies respond to this confusing set of facts? Until the Legislature clarifies that "maintenance when performed by contract" is not a public work, but is subject to prevailing wages, I think public agencies should take the conservative approach (following WAC 296-127-010 and the Wheelabrator case) and treat "maintenance when performed by contract" as a public work, from a bidding perspective and recognize that such work is subject to prevailing wages.
2. The second big issue that needs discusssion, but not nearly as much as the first issue above is the distinction between maintenance and ordinary maintenance. This actually seems like an easier question to me. RCW 39.04.010 is clear that "ordinary maintenance" is not a public work. The law, however, doesn't define "ordinary maintenance." WAC 296-127-010 and the Wheelabrator case both seem fairly clear that ordinary maintenance is that work which is performed by public agency employees, and therefore not subject to prevailing wages.
Hearing on New Prevailing Wage Rules
The Washington State Department of Labor and Industries has announced a series of three public hearings across the State to consider modifications to regulations affecting the applicability of prevailing wages for the incorporation and delivery of material on public works projects.
The hearings will consider amendments to WAC 296-127-018 (Coverage and exemptions of workers involved in the production and delivery of gravel, concrete, asphalt, or similar materials). The hearings will be held as follows:
The hearings will consider amendments to WAC 296-127-018 (Coverage and exemptions of workers involved in the production and delivery of gravel, concrete, asphalt, or similar materials). The hearings will be held as follows:
- October 22, 2008 (1:00 p.m.) in Tumwater, WA
- October 23,2008 (10:00 a.m.) in Spokane, WA
- October 29, 2008 (1:00 p.m.) in Tukwila, WA
Construction Defects Seminar
Construction Defects: Update and Strategies - SeminarWhen: December 11, 2008 (9:00 a.m. to 5:15 p.m.)
Where: Washington State Convention & Trade Center (Seattle, WA)
Sponsored by: The Seminar Group
Cost: $495
For more information and to register, click here:
Subjects include:
- Owner's Perspective on Construction Defects
- Contractor's Perspective on Construction Defects
- Consultant's Perspective
- Current Insurance Products and Strategies
- Green Design Considerations: What to do When Things go Wrong
- Pursuing Insurance Coverage
- Ethical Considerations
- Making or Breaking Your Defect Case
- Steven J. Jager
- Thomas F. Ahearne
- Gregg L. Bertram
- Edward R. Coulson
- Randy Hart
- T. Daniel Heffernan
- Mark Rosencrantz
- J. Kay Thorne
Saturday, September 13, 2008
City of Vancouver Seeks Procurement Manager
The City of Vancouver (Washington) is currently recruiting for a Procurement Services Manager.The salary range for this full-time, exempt position is $6,314 to $7,814 per month. The position was opened on September 11, 2008, and will remain open until filled.
The full job description, minimum qualifications, and application procedures are available online by clicking here.
The Procurement Services Manager is responsible for managing the Procurement and Payables Division of the Financial & Management Services Department. The incumbent would be responsible for overseeing and coordinating the purchasing, contract administration, and payables activities for the City of Vancouver. The division is also responsible for the City's Purchasing Card program, the shared Small Works Roster program for public works/improvement projects, contract administration for public works projects, surplus property, bidder protests, City Council resolutions, vendor payments and disbursements, travel program, and oversight of the Oracle Financial System requirements for Procurement and Accounts Payable operations. The purchasing function assists City departments to procure and expend approximately $100 million annually. The accounts payable section makes disbursements to vendors, contractors, third parties, and employees totaling approximately $175 million annually.
New! Search and Print from this Blog
To help make using this blog easier, I've added two features on the right hand column.
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- Search the Blog. With almost 300 blog entries now, it can be time-consuming to find what you're looking for. This Google Search feature enables you to search just Mike Purdy's Public Contracting Blog for words that you enter in the search box.
To ensure that you don't miss any blog entries, sign up for a free e-mail subscription to the blog. Everytime I post a new blog entry, you will receive an e-mail with the content of the posting.
Friday, September 12, 2008
Calculating the Total Contract Cost on Early Subcontract Bidding for GC/CM Projects
In 2007, the Washington State Legislature amended the law addressing the alternative public works contracting procedure known as GC/CM (General Contractor/Construction Manager).
One of the more confusing provisions of the new law allows for a public agency to authorize the GC/CM to bid, award, and construct for certain subcontract bid packages prior to the plans and specifications being complete. This means that bidding, award, and construction may begin prior to the negotiation of the Maximum Allowable Construction Cost (MACC) between the GC/CM and public agency.
This new process raises many practical questions. The particular provision allowing this is found in RCW 39.10.370 (3).
Let's take a look at how this might play out in practice. The public agency authorizes the GC/CM to conduct early subcontract bidding for a demolition package since there is an interest in performing the demolition early in order to meet a schedule. The GC/CM bids the work on less than complete plans and specifications. A low bidder is identified. In order for work to begin, the GC/CM must award a subcontract to the low demolition subcontractor. In order for them to do that, they must have a contract with the public agency.
The public agency enters into a GC/CM contract with the contractor for only part of the work (the demolition). But what is the dollar amount of that GC/CM contract?
Part of it includes the subcontract bid price of the low demolition contractor (or an adjustment to that as may be negotiated between the public agency and GC/CM). But since the MACC, by definition, also includes Negotiated Support Services, these must be negotiated between the public agency and the GC/CM for just the work to be awarded under this "mini-MACC" GC/CM contract.
The Total Contract Cost of the GC/CM contract must also include an amount for the contractor's Percent Fee. Remember that the Percent Fee is a percentage that the GC/CM actually bids to the public agency during the GC/CM selection process and includes the contractor's overhead and profit. Part of the Total Contract Cost for this early GC/CM contract will include the percentage bid by the GC/CM for the Percent Fee multiplied by the "mini-MACC," the amount of the subcontract bid package being awarded now.
In addition, the Total Contract Cost must include a portion of the Specified General Conditions costs, again something that was bid by the GC/CM during the selection process as a lump sum. The public agency and GC/CM will need to negotiate a percentage of the Specified General Conditions costs that should be applied to the "mini-MACC."
Finally, because the state law requires a Risk Contingency amount to be part of the MACC, the "mini-MACC" for the project will also include the percentage previously designated by the public agency multiplied by the "mini-MACC" exclusive of Negotiated Support Service costs.
Thus, the MACC will consist of the following: a) amount of early subcontract bid package(s), b) amount for risk contingency, c) amount for Negotiated Support Services.
The Total Contract Cost will consist of the following: a) "mini-MACC," b) portion of Percent Fee, and c) portion of Specific General Conditions.
Once the complete MACC is negotiated (after the plans and specifications are at 90% completion), the revised MACC will be added to the GC/CM contract by change order.
Doing early subcontract bidding, award, and construction on a GC/CM project is a new feature of GC/CM contracting that requires careful attention to detail and an awareness and management of the risks associated with this practice.
One of the more confusing provisions of the new law allows for a public agency to authorize the GC/CM to bid, award, and construct for certain subcontract bid packages prior to the plans and specifications being complete. This means that bidding, award, and construction may begin prior to the negotiation of the Maximum Allowable Construction Cost (MACC) between the GC/CM and public agency.
This new process raises many practical questions. The particular provision allowing this is found in RCW 39.10.370 (3).
Let's take a look at how this might play out in practice. The public agency authorizes the GC/CM to conduct early subcontract bidding for a demolition package since there is an interest in performing the demolition early in order to meet a schedule. The GC/CM bids the work on less than complete plans and specifications. A low bidder is identified. In order for work to begin, the GC/CM must award a subcontract to the low demolition subcontractor. In order for them to do that, they must have a contract with the public agency.
The public agency enters into a GC/CM contract with the contractor for only part of the work (the demolition). But what is the dollar amount of that GC/CM contract?
Part of it includes the subcontract bid price of the low demolition contractor (or an adjustment to that as may be negotiated between the public agency and GC/CM). But since the MACC, by definition, also includes Negotiated Support Services, these must be negotiated between the public agency and the GC/CM for just the work to be awarded under this "mini-MACC" GC/CM contract.
The Total Contract Cost of the GC/CM contract must also include an amount for the contractor's Percent Fee. Remember that the Percent Fee is a percentage that the GC/CM actually bids to the public agency during the GC/CM selection process and includes the contractor's overhead and profit. Part of the Total Contract Cost for this early GC/CM contract will include the percentage bid by the GC/CM for the Percent Fee multiplied by the "mini-MACC," the amount of the subcontract bid package being awarded now.
In addition, the Total Contract Cost must include a portion of the Specified General Conditions costs, again something that was bid by the GC/CM during the selection process as a lump sum. The public agency and GC/CM will need to negotiate a percentage of the Specified General Conditions costs that should be applied to the "mini-MACC."
Finally, because the state law requires a Risk Contingency amount to be part of the MACC, the "mini-MACC" for the project will also include the percentage previously designated by the public agency multiplied by the "mini-MACC" exclusive of Negotiated Support Service costs.
Thus, the MACC will consist of the following: a) amount of early subcontract bid package(s), b) amount for risk contingency, c) amount for Negotiated Support Services.
The Total Contract Cost will consist of the following: a) "mini-MACC," b) portion of Percent Fee, and c) portion of Specific General Conditions.
Once the complete MACC is negotiated (after the plans and specifications are at 90% completion), the revised MACC will be added to the GC/CM contract by change order.
Doing early subcontract bidding, award, and construction on a GC/CM project is a new feature of GC/CM contracting that requires careful attention to detail and an awareness and management of the risks associated with this practice.
Wednesday, September 10, 2008
Audit Findings on Museum Development Authority of Seattle
The Washington State Auditor's Office has issued findings against the Museum Development Authority of Seattle (Seattle Art Museum) for failure to comply with state bidding, bonding, and prevailing wage laws for public works projects.
The findings included the following:
The findings included the following:
- Making a payment to a contractor prior to the contract being signed.
- Not following laws related to the use of General Contractor/Construction Manager (GC/CM) including not conducting a public hearing authorizing the use of GC/CM (this requirement was eliminated as of July 1, 2007 and replaced with the Project Review Committee approval process), and not having the GC/CM obtain bid bonds, and payment and performance bonds for subcontracts over $300,000.
L&I Corrects Prevailing Wage Rates
On September 5, 2008, the Washington State Department of Labor and Industries made corrections to the August 31, 2008 prevailing wage rates for three classifications (carpenters, lathers, drywall tapers) by lowering the rates by five cents an hour. This only affects the following counties: Adams, Asotin, Benton, Columbia, Ferry, Franklin, Garfield, Grant, Lincoln, Okanogan, Pend Oreille, Spokane, Stevens, Walla Walla, and Whitman.
In addition, L&I also made corrections to the March 2, 2008 apprentice rates for Plumbers in King and Clallam counties. These changes were effective on September 4, 2008.
These change raise a number of operational issues for public agencies and contractors, especially the one changing the March 2, 2008 rates after the August 31, 2008 rates have gone into effect. See my earlier post on the subject of changes and corrections to the prevailing wage rates.
In addition, L&I also made corrections to the March 2, 2008 apprentice rates for Plumbers in King and Clallam counties. These changes were effective on September 4, 2008.
These change raise a number of operational issues for public agencies and contractors, especially the one changing the March 2, 2008 rates after the August 31, 2008 rates have gone into effect. See my earlier post on the subject of changes and corrections to the prevailing wage rates.
Tuesday, September 9, 2008
Audit Finding on Spokane County's Purchasing Practices
The Washington State Auditor's Office issued a finding on September 8, 2008 that Spokane County's "internal controls are insufficient to ensure compliance with the County's purchasing policy and state law."The auditor found that the County's financial system allowed users to "circumvent the Purchasing Department and make payments in excess of their delegated purchasing limits."
In addition, the auditor found a number of "sole source" purchases that were not justified or documented.
Click here to view the entire audit that also includes findings on other subjects (11 pages total).
It is important for public agencies to have clear policies related to sole source purchases, whether separately or for products included in a public works specification. Without valid justification of sole source products, an agency may end up unduly limiting competition and may thus pay more than is justified for a product. In addition, there is an expectation that businesses should have the opportunity to provide their products to public agencies. Without clear and compelling sole source justifications, public agencies are subject to bid protests from other vendors who believe their product will work just as well.
There are clearly valid reasons why a product may be determined to be a sole source, but these declarations should not be made lightly. And as the audit of Spokane County pointed out, it's important to be transparent and document sole source products.
Redmond Recruiting for a Buyer
The City of Redmond is recruiting for a Senior Commodity Buyer position. This is not an entry level position and the City is seeking an experienced professional.Salary: $3,934 to $5,938 DOQ.
Filing deadline: Open until filled, but preference will be given to applicants who apply by September 26, 2008.
For more information and to apply, visit the City of Redmond's website.
Changes and Corrections to Prevailing Wages
The Washington State Department of Labor and Industries publishes prevailing wage rates twice a year and makes changes in the rates based on changing survey data for specific classifications.
Washington Administrative Code (WAC) 296-127-011, Time for Determining Prevailing Wages, states the following:
"Prevailing wage rates for all public work contracts will be determined by the industrial statistician and published on the first business day of February and the first business day of August of each year. These rates shall become effective thirty days after the date of publication. However, the industrial statistician may revise an established prevailing wage rate in response to an administrative or judicial finding overturning the established rate, or at any time necessary to correct an error, with such revision becoming effective thirty days after the date of publication. However, in the event of an emergency as determined by the director of the department, such revised rates shall take effect upon publication."
Key concepts included in this provision of WAC 296-127-011, include the following:
Publication: The WAC requires that the Industrial Statistician of the Department of Labor and Industries publish new prevailing wages for each county twice a year, "on the first business day of February and the first business day of August of each year." The purpose of the publication requirement before the effective date of the new prevailing wages, is to provide public agencies with time to include the new prevailing wages into bidding documents for projects that will be advertised. In addition, publication of the prevailing wage rates prior to the effective date, provides an opportunity for interested parties to provide feedback to L&I on any errors or corrections that may need to be made in the prevailing wage rates prior to the wages going into effect.
Effective Date: According to the WAC, the prevailing wages that are published "on the first business day of February and the first business day of August" become effective 30 days after publication. Thus, a public agency may generally expect that the date of the prevailing wages will be in early March and the end of August of each year.
Changes and Corrections: Establishing prevailing wages is a complex undertaking for L&I, and despite the care that is taken in establishing correct prevailing wage rates, errors do occur. WAC 296-127-011 provides for this. There are two different situations that may result in a change to the established prevailing wage rates: 1) an administrative or judicial finding that overturns the established rate, or 2) the correction of an error. In the event that either of these circumstances occurs, L&I is required to publish the corrected prevailing wage rate and the corrected rate then becomes effective 30 days after such publication.
In practice, it appears that L&I does not distinguish between publication and effective date for changes in prevailing wages. My observation has been that when an error is noted by the Department, they will send a notice to those on their e-mail notification list informing them of the change, but the change has already been incorporated into the published prevailing wages online on L&I's website without waiting the required 30 days.
This practice of L&I makes it difficult for public agencies to be able to distinguish between printed versions of prevailing wage rates without conducting a classification by classification and wage by wage comparison to determine where any changes may have been made. Changes made by L&I based on errors or other findings are not separately identified in the published wage rates and do not include separate effective dates for the changed prevailing wage rates, as the WAC suggests should occur.
Emergencies: WAC 296-127-011 does authorize the director of the Department of Labor and Industries to determine that a changed prevailing wage rate is an emergency that must become effective immediately. Thus, given the practice of L&I to make corrections effective immediately, it appears that they are determining that each of these changes constitutes an emergency. However, there is never an accompanying determination by the director of the Department. Furthermore, it seems unlikely that all of the corrections could be emergencies, especially when they correct a wage rate under a listing of prevailing wages that is more than six months old and that has been superseded by the new wage rates.
Such a practice by L&I, whether an emergency or not, is problematic for public agencies. For example, let's say that a public agency includes the prevailing wages effective August 31, 2008 in the bidding documents for a project. The bidding documents are published on November 5, 2008, using the prevailing wage rates obtained from the Department's website. On November 19, 2008, the dame day as the deadline for bid submittal, the Department issues a corrected prevailing wage rate for a classification of labor. The public agency either isn't aware of the change or doesn't have time to respond to the change by issuing an addendum to the bidding documents. Bids are opened and the contractor would have based its bid on the prevailing wages included in the bidding documents, believing that those were the ones effective for the project, since they were effective on August 31, 2008. The contract is awarded to the contractor who proceeds to pay the workers the prevailing wages as published in the bidding doucments. One of the workers then files a claim, asserting that the prevailing wage rate in effect as of the bid opeing date was different that what was published in the bidding documents, based on the correction made by L&I. What are the correct prevailing wages? What party is liable for any back wages that may be due?
Without proper publication and notification, changing prevailing wages at various times during the year, other than the beginning of March and the end of August may be problematic for both contractors and public agencies.
Washington Administrative Code (WAC) 296-127-011, Time for Determining Prevailing Wages, states the following:
"Prevailing wage rates for all public work contracts will be determined by the industrial statistician and published on the first business day of February and the first business day of August of each year. These rates shall become effective thirty days after the date of publication. However, the industrial statistician may revise an established prevailing wage rate in response to an administrative or judicial finding overturning the established rate, or at any time necessary to correct an error, with such revision becoming effective thirty days after the date of publication. However, in the event of an emergency as determined by the director of the department, such revised rates shall take effect upon publication."
Key concepts included in this provision of WAC 296-127-011, include the following:
Publication: The WAC requires that the Industrial Statistician of the Department of Labor and Industries publish new prevailing wages for each county twice a year, "on the first business day of February and the first business day of August of each year." The purpose of the publication requirement before the effective date of the new prevailing wages, is to provide public agencies with time to include the new prevailing wages into bidding documents for projects that will be advertised. In addition, publication of the prevailing wage rates prior to the effective date, provides an opportunity for interested parties to provide feedback to L&I on any errors or corrections that may need to be made in the prevailing wage rates prior to the wages going into effect.
Effective Date: According to the WAC, the prevailing wages that are published "on the first business day of February and the first business day of August" become effective 30 days after publication. Thus, a public agency may generally expect that the date of the prevailing wages will be in early March and the end of August of each year.
Changes and Corrections: Establishing prevailing wages is a complex undertaking for L&I, and despite the care that is taken in establishing correct prevailing wage rates, errors do occur. WAC 296-127-011 provides for this. There are two different situations that may result in a change to the established prevailing wage rates: 1) an administrative or judicial finding that overturns the established rate, or 2) the correction of an error. In the event that either of these circumstances occurs, L&I is required to publish the corrected prevailing wage rate and the corrected rate then becomes effective 30 days after such publication.
In practice, it appears that L&I does not distinguish between publication and effective date for changes in prevailing wages. My observation has been that when an error is noted by the Department, they will send a notice to those on their e-mail notification list informing them of the change, but the change has already been incorporated into the published prevailing wages online on L&I's website without waiting the required 30 days.
This practice of L&I makes it difficult for public agencies to be able to distinguish between printed versions of prevailing wage rates without conducting a classification by classification and wage by wage comparison to determine where any changes may have been made. Changes made by L&I based on errors or other findings are not separately identified in the published wage rates and do not include separate effective dates for the changed prevailing wage rates, as the WAC suggests should occur.
Emergencies: WAC 296-127-011 does authorize the director of the Department of Labor and Industries to determine that a changed prevailing wage rate is an emergency that must become effective immediately. Thus, given the practice of L&I to make corrections effective immediately, it appears that they are determining that each of these changes constitutes an emergency. However, there is never an accompanying determination by the director of the Department. Furthermore, it seems unlikely that all of the corrections could be emergencies, especially when they correct a wage rate under a listing of prevailing wages that is more than six months old and that has been superseded by the new wage rates.
Such a practice by L&I, whether an emergency or not, is problematic for public agencies. For example, let's say that a public agency includes the prevailing wages effective August 31, 2008 in the bidding documents for a project. The bidding documents are published on November 5, 2008, using the prevailing wage rates obtained from the Department's website. On November 19, 2008, the dame day as the deadline for bid submittal, the Department issues a corrected prevailing wage rate for a classification of labor. The public agency either isn't aware of the change or doesn't have time to respond to the change by issuing an addendum to the bidding documents. Bids are opened and the contractor would have based its bid on the prevailing wages included in the bidding documents, believing that those were the ones effective for the project, since they were effective on August 31, 2008. The contract is awarded to the contractor who proceeds to pay the workers the prevailing wages as published in the bidding doucments. One of the workers then files a claim, asserting that the prevailing wage rate in effect as of the bid opeing date was different that what was published in the bidding documents, based on the correction made by L&I. What are the correct prevailing wages? What party is liable for any back wages that may be due?
Without proper publication and notification, changing prevailing wages at various times during the year, other than the beginning of March and the end of August may be problematic for both contractors and public agencies.
Saturday, September 6, 2008
GA Annual Training Conference and Trade Show
General Administration's Annual Training Conference & Trade ShowWhen: October 29-30, 2008
Where: Tacoma, WA, Greater Tacoma Trade & Convention Center (1500 Broadway, Tacoma)
Hosted By: Washington State Department of General Administration
For more information and registration, visit GA’s website
Friday, September 5, 2008
RFPs versus RFQs - What's the Difference?
In the selection of consultants, what’s the difference between a Request for Proposals (RFP) and a Request for Qualifications (RFQ)?
Different agencies use different processes and there doesn’t seem to be much unanimity about what each of these terms mean. So here’s one opinion on the difference and when each should be used. I would be very interested in any comments and observations you may have about this subject.
A proposal in response to a Request for Proposals generally has three major elements.
First, as the name suggests, a Request for Proposals requests that consultants submit a “proposal” about how the consultant would approach the consultant engagement being solicited. An agency should use an RFP when the service being sought might be performed differently depending on who is selected. The public agency wants to get the benefit of various ideas and approaches. In evaluating an RFP, one of the evaluation criteria should be an evaluation of the proposal and how creative it is and how closely it meets or doesn’t meet the agency’s objectives.
Second, in addition to asking how the consultant would perform the work, the RFP also asks who would perform the work. Thus, the proposal should include some information about the specific personnel who would be assigned to the work and their relevant experiences, and this would be a factor in the evaluation of the proposals.
Third, the proposal should include the consultant’s proposed price or pricing structure for performing the work, something that also would be evaluated as part of the selection criteria by the public agency.
Under an RFP, a public agency wants to get the best financial deal from the most qualified consultant who has the most effective and creative solution to meet the agency’s objectives.
A Request for Qualifications generally requests only the qualifications of the personnel who would be assigned to perform the work, and does not ask for the consultant’s proposal or approach, nor does it ask about the consultant’s price for performing the work. Generally, an RFQ is used when the public agency is required by law to select certain disciplines of consultants under what is known as “Qualifications Based Selection.” Frequently used in the selection of architects and engineers, Qualifications Based Selection is a process whereby the public agency selects the most highly qualified firm without regard to price, and then enters into negotiations with that firm. In
If an public agency is not bound by Qualifications Based Selection laws, it is a better idea to use an RFP where price can be a factor in the selection process along with the qualifications and approach of the consultant to perform the work.
Contracting vs. Project Management
The contracting function in public agencies is often in conflict with the project management function.
Project managers of design and construction projects are primarily focused on getting their project done quickly, often working in a difficult political environment with tight budgets and schedules. They frequently known who they would like to do the work, but find themselves constrained by public contracting laws and regulations that “get in the way.”. As a result, project managers and construction managers get frustrated at what they term the contracting bureaucracy.
On the other hand, contracting personnel are also frustrated. They are charged by the law and the public agency with ensuring a fair process that complies with the law, ensures integrity in the selection and contracting process, and gets the best financial deal for the agency, all within the constraints of public contracting laws.
There is a natural tension between these two functions, with project managers charging that contracting personnel try to put up roadblocks to prevent them from doing their job, while contracting personnel complain that project managers skirt the law and give away the financial store by their practices.
What is needed to reduce this tension is strong support from high level management for both the contracting and project management functions. Without this perspective that values and recognizes the necessity of each function, an organization will take on the leanings of its top management. If top management doesn’t value the contracting function, that attitude will trickle down to project managers who will view that as a license to cut corners. Likewise, if top management rigidly adheres to contracting processes but fails to understand the importance of getting the project completed expediently, projects will come in over budget and behind schedule. Without a balanced support for both contracting and project management, personnel will be frustrated and find themselves caught in the crossfire of unclear expectations, and dealing with unnecessary conflict.
Management and staff in public agencies need to have a clear understanding about the role of each of these functions and how they will attempt to balance competing interests. It is important to have facilitated conversations that can help an agency articulate how they will live in the public sector world – getting the projects done on time and on budget and in compliance with contracting regulations and processes.
Unfortunately, many agencies are not very deliberate about confronting this natural tension.
Project managers of design and construction projects are primarily focused on getting their project done quickly, often working in a difficult political environment with tight budgets and schedules. They frequently known who they would like to do the work, but find themselves constrained by public contracting laws and regulations that “get in the way.”. As a result, project managers and construction managers get frustrated at what they term the contracting bureaucracy.
On the other hand, contracting personnel are also frustrated. They are charged by the law and the public agency with ensuring a fair process that complies with the law, ensures integrity in the selection and contracting process, and gets the best financial deal for the agency, all within the constraints of public contracting laws.
There is a natural tension between these two functions, with project managers charging that contracting personnel try to put up roadblocks to prevent them from doing their job, while contracting personnel complain that project managers skirt the law and give away the financial store by their practices.
What is needed to reduce this tension is strong support from high level management for both the contracting and project management functions. Without this perspective that values and recognizes the necessity of each function, an organization will take on the leanings of its top management. If top management doesn’t value the contracting function, that attitude will trickle down to project managers who will view that as a license to cut corners. Likewise, if top management rigidly adheres to contracting processes but fails to understand the importance of getting the project completed expediently, projects will come in over budget and behind schedule. Without a balanced support for both contracting and project management, personnel will be frustrated and find themselves caught in the crossfire of unclear expectations, and dealing with unnecessary conflict.
Management and staff in public agencies need to have a clear understanding about the role of each of these functions and how they will attempt to balance competing interests. It is important to have facilitated conversations that can help an agency articulate how they will live in the public sector world – getting the projects done on time and on budget and in compliance with contracting regulations and processes.
Unfortunately, many agencies are not very deliberate about confronting this natural tension.
Thursday, September 4, 2008
“Alphabet Soup” Regulations
At both the federal and Washington State level, there are two basic sets of requirements – laws and regulations.
Laws (or statutes) are those passed by either Congress or the State Legislature and then signed into law by either the President or Governor. Regulations are adopted by administrative agencies or departments of the government to implement the laws and provide more details about the intent of the laws.
And, of course, the laws and regulations, all have acronyms - USC, CRF, RCW, WAC.
The following chart describes what they are and where they may be located on the web.
Laws (or statutes) are those passed by either Congress or the State Legislature and then signed into law by either the President or Governor. Regulations are adopted by administrative agencies or departments of the government to implement the laws and provide more details about the intent of the laws.
And, of course, the laws and regulations, all have acronyms - USC, CRF, RCW, WAC.
The following chart describes what they are and where they may be located on the web.
| Laws |
| Federal |
| USC – |
| State |
| RCW – Revised Code of |
| Regulations |
| Federal |
| CFR – Code of Federal Regulations |
| http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=%2Findex.tpl |
| State |
| WAC – |
Prevailing Wage Law in Washington – Training
Training:
Prevailing Wage Law in
When: December 4, 2008, 8:30 a.m. to 4:30 p.m.
Where:
Cost: $359
Sponsored by: Lorman Education Services
For more information and to register, visit Lorman’s website
Instructors:
- Michael E. Purdy (Michael E. Purdy Associates)
- Peter Guzman (City of
- Greg Mowat (Sound Transit and GTM Transformations LLC)
- Miriam
Outline of Training:
- History and development of Prevailing Wage Laws
- Prevailing wage rates and fringe benefits
- Establishing prevailing wage rates
- What work is subject to prevailing wages
- Court cases
- Legislative developments
- Industry wide committees addressing prevailing wages
- Awarding agency responsibilities
- Prevailing wage enforcement – public agencies
- Prevailing wage enforcement – public and private enforcement
- Apprenticeship programs and prevailing wages
- Project labor agreements
Tuesday, September 2, 2008
New Prevailing Wages Effective August 31, 2008
The Washington State Department of Labor and Industries, which published revised prevailing wage rates on August 1, 2008, made the new rates effective on August 31, 2008. There were a number of corrections made to the rates originally published on August 1, 2008.
If you printed the rates for inclusion in bidding documents prior to August 31, 2008, it's probably a good idea to reprint the rates with the corrections and include those in the bidding documents.
As a reminder, the effective date for prevailing wages on public works projects is the date bids are due to be submitted to the public agency.
To view and print the current prevailing wage rates, visit the website of the Department of Labor and Industries.
If you printed the rates for inclusion in bidding documents prior to August 31, 2008, it's probably a good idea to reprint the rates with the corrections and include those in the bidding documents.
As a reminder, the effective date for prevailing wages on public works projects is the date bids are due to be submitted to the public agency.
To view and print the current prevailing wage rates, visit the website of the Department of Labor and Industries.
Pacific Northwest Purchasing Conference
65th Annual Pacific Northwest Purchasing Conference
When: October 23-25, 2008
Where: Kennewick, WA (Red Lion Hotel at Columbia Center)
Sponsored by: NAPM-CB (National Association of Purchasing Management - Columbia Basin)
Description: A regional conference of supply management professionals from Alaska, Hawaii, Idaho, Oregon, and Washington. The Conference will bring together buyers, purchasing agents, purchasing managers, supply management executives, engineers, educators, and business owners from throughout the Northwest.
Speakers include: Darin Matthews, Dave Davis, Neva Peckham, Christine Warnock
For more information and registration, visit the NAPM-CB website.
When: October 23-25, 2008
Where: Kennewick, WA (Red Lion Hotel at Columbia Center)
Sponsored by: NAPM-CB (National Association of Purchasing Management - Columbia Basin)
Description: A regional conference of supply management professionals from Alaska, Hawaii, Idaho, Oregon, and Washington. The Conference will bring together buyers, purchasing agents, purchasing managers, supply management executives, engineers, educators, and business owners from throughout the Northwest.
Speakers include: Darin Matthews, Dave Davis, Neva Peckham, Christine Warnock
For more information and registration, visit the NAPM-CB website.
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