AGC Seeks Veto By Governor of Off-Site Prefabrication Reporting Bill

The Washington State Legislature has approved legislation that would require contractors and subcontractors who hire firms to produce off-site, prefabricated, non-standard items outside the State of Washington for a public works project within the State, to report certain data to the Department of Labor and Industries.

The Associated General Contractors of Washington has announced they will ask Governor Chris Gregoire to veto the bill.

Bill Supported by Labor Unions:  The bill was heavily pushed by labor union interests who argued that collecting such data was an important first step to stem what they call a trend of companies setting up off-site prefabrication facilities just across the Washington border in Idaho and Oregon in order to avoid paying prevailing wages for such work.  Under Washington law and based on court cases, prevailing wages apply for the prefabrication of any product that is not "off the shelf" but was specifically prefabricated for a public works projects.  The applicable prevailing wages are those in the county the product is prefabricated.  Washington State has no prevailing wage jurisdiction for work performed outside of the state boundaries.

Projects and Agencies Affected:  Engrossed House Bill 2805 would require public agencies in the State of Washington to include language in every contract estimated to cost more than $1 million requiring the reporting of data by contractors and subcontractors on the existing Affidavit of Wages Paid form, which would be modified by the Department of Labor and Industries.  The Washington State Department of Transportation (WSDOT) and local transportation public works projects would be exempted from the requirement.

Data to be Collected:  The data that would be required to be submitted by the contractor or subcontractor who hired firms producing off-site prefabricated items outside the State of Washington includes the following:

• The estimated cost of the public works project
• The name of the awarding agency and the title of the public works project
• The contract value of the off-site, prefabricated, nonstandard project specific items produced outside Washington, including labor and materials
• The name, address, and federal employer identification number of the contractor that produced the off-site, prefabricated, nonstandard, project specific items.

Other features of the legislation include the following:

• The provision would apply to any applicable contract effective September 1, 2010.
• The provision would sunset on December 31, 2013.
• Data collected by Labor and Industries would be reported to the Capital Projects Advisory Review Board (CPARB) for review.
• Adds a new mandatory bidder responsibility criterion to RCW 39.04.350 that would prohibit a public agency from awarding a contract to any contractor who violated the reporting requirements of the legislation more than once.  The Department of Labor and Industries would presumably make such information available to public agencies.

AGC Concerns:  Concerns of the AGC include the fact that the definition of off-site, prefabricated, nonstandard, project-specific items "is unclear to contractors or awarding agencies."  AGC has also expressed concern about the $600,000 estimated cost to implement the legislation, especially in these difficult budget times.