Thursday, March 31, 2011

Specification Section for "Perforated Pastry Units"

Do you need a Division 01 specification section requiring the contractor to provide donuts at construction meetings?  What would such a spec section look like?  I can imagine developing such a spec must have been a fun group project. 

Click here for a laugh when you read a delightful specification section for "Perforated Pastry Units."
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Wednesday, March 30, 2011

Executing Change Orders on Unit Price Contracts

The total contract amount of a typical Design-Bid-Build public works contract is typically based either on a lump sum bid or a unit price bid in which the extensions of the unit prices multiplied by the estimated quantities are added together to arrive at a total contract amount.  During the term of the project, the estimated quantities may either increase or decrease from the estimated quantities.  

The Question:  Should a change order or change orders be executed to address changes in the quantities from the estimated quantities to the actual quantities?

Different Practices:  I am aware that some public agencies rely only on the original amount of the contract for a unit price contract and do not execute a change order to reconcile any differences.  However, I think it is important that a reconciling change order be issued, at least at the end of the project.  

Amount Paid and Contract Amount Should Be Consistent:  The reason why it is important to execute a reconciling change order to address changes in quantities is that the total contract amount as amended by change order should be consistent with the actual dollar amount paid to the contractor.  Without such a reconciling change order, the contract may reflect that more money has been paid to the contractor than was authorized with the contract amount.

Audit Risk:  From both a contractual perspective as well as an audit perspective (auditors regularly issue findings if the dollar amount paid under a contract is inconsistent with the amount authorized by the contract), it is important for public agencies to issue reconciling change orders for unit price contracts.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Tuesday, March 29, 2011

When Are Circumstances "Unforeseen" Justifying an Emergency?

Waiving competitive bidding requirements due to an emergency public works project can be tricky.

According to Washington State law on exemptions to competitive bidding requirements, 
"'emergency' means unforeseen circumstances beyond the control of the municipality that either: (a) Present a real, immediate threat to the proper performance of essential functions; or (b) will likely result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken." (RCW 39.04.280 (3)).
Citing this definition, the Washington State Auditor's Office issued a finding against The Historic Seattle Preservation and Development Authority (Historic Seattle) for improperly declaring an emergency in order to waive competitive bidding for a remodeling contract on Washington Hall initially worth $480,000.  Including change orders, the cost grew to $670,000 before completion.

Audit Findings
  • What Does "Unforeseen" Mean? Although the condition of the building was known before the purchase, Historic Seattle reasoned that before buying the building it "had no ability to repair the property and no liability for personal injuries resulting from the building’s unsafe condition". Using a definition of "unforeseeable" as meaning "not able to be predicted or planned for in advance" (emphasis added) Historic Seattle argued that it was "not able to plan to make repairs to the building in advance of acquiring ownership."

    The Auditor's report noted that a prior appraisal of the building - performed months before Historic Seattle bought it - had "documented 'significant deferred maintenance' and concluded the building had 'a remaining economic life of zero years'". Since the results of the appraisal "are advance notice that the building will require significant repair and remodeling" and the building's "neglect was obvious at the time of purchase," the Auditor concluded that neither "issues noted during the appraisal" nor "concerns for the health and welfare of the tenant" constitute unforeseen circumstances.

  • Building Open During "Emergency" Construction: The Auditor's report also called into question the timeline of the repairs, observing that although "state law says a declaration of emergency is to be addressed promptly" the repairs continued for over a year. Moreover, the Auditor noted that since Historic Seattle "declared an emergency stating the building was unsafe for general occupation," opening the building six months before construction was finished "appears to contradict the need for the emergency declaration." Historic Seattle responded that in spite of delays "all [work] but the electrical service upgrade... was completed within four months of award of the bid".

  • Work Not Limited to Emergency Work: The Auditor also found that the "contract was not limited to repairs related to unsafe conditions" and that Historic Seattle "allowed unlimited change orders."
Questions to Ask Before Declaring an Emergency
  • Is it an Emergency? Does the situation fulfill both parts of the exceptions to competitive bidding requirements in RCW 39.04.280? On a basic level, you can ask these two questions:
    1. Was the situation not anticipated and beyond the public agency's control? And...
    2. Is the situation either threatening performance of essential agency functions or likely to cause property damage, injury, or death if it's not addressed?
  • Is the Emergency Timely?  Did the public agency formally waive competitive bidding requirements in a timely manner?  Does the project address the emergency work in a timely manner?
  • Is there Sufficient Time to Bid the Project?  Does the public agency have sufficient time to conduct a publicly advertised bid process?
  • Does the Emergency Go Too Far? Does the contract cover only work that's needed to address the emergency situation, or does it also include additional work that would be more appropriately covered through competitive bidding? (This is a good question to ask about any change orders to the project as well)
Read the full audit findings here.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Monday, March 28, 2011

Improprieties by Alaska Procurement Officials

John P. Ahlers, a well-known and respected Seattle based construction attorney, has written in his Construction Law Blog about a bid protest case in Alaska where the protester filed a lawsuit against four procurement officials as individuals.

Read the full blog entry here.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Sunday, March 27, 2011

Training: Alternative Delivery - Is it Right for Your Next Project?

Rodger Benson

When: Wednesday, April 20, 2011 (4:45 to 7:00 p.m.)

Where: Seattle, Washington (Rock Salt Restaurant, 1232 Westlake Ave N)

Speaker: Rodger Benson, LEED AP, Director of Project Development, M.A. Mortenson Company

Description: Learn from the industry what the fuss is all about and decide for yourself if you’re potentially missing a valuable delivery model in your capital project tool box.  Whether its job order contracting, design-build, or GC/CM, many public bodies in Washington state are increasingly turning to these alternatives to Design-Bid-Build.  You’ll hear what the industry is saying about:
  • Its history
  • Its structure
  • Its pros and cons
  • Who can use it
  • How you can get approval to use it
  • How to procure it, and
  • How to get the most from it
Sponsored by: The American Public Works Association (APWA) Washington State Chapter's Management & Public Administration Committee (MPAC)

Cost: $37 (includes dinner)

Registration deadline: Wednesday, April 13, 2011

Information and Registration: Click here
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Thursday, March 24, 2011

Should Public Works Projects Use Local Workers? San Francisco Local Hire Law Makes Waves

The City of San Francisco is causing a stir with a new local hire law that goes into effect on Friday, March 25, 2011. While a number of jurisdictions around the country encourage or require a certain percentage of the work on public works projects be performed by local workers, San Francisco's new ordinance is among the most stringent.

A Tougher Standard:  Until now, the City had a less strict regulation requiring a non-binding "good faith" effort from contractors to hire half of their work force locally for public works projects. The new law - which applies to projects within 70 miles of the city and over $400,000 - requires that 20% of work hours be performed by city residents (approximately the amount performed under the current system). However, the percentage rises 5 points every year until it reaches 50%.

Local Hire Laws Face Problems in the Past: While local hire laws can be a popular way to try to funnel public dollars back to a region's economy, they are not without potential problems. A state-wide local hire law in Washington was struck down by a Washington State Supreme Court decision in 1982 as violating the privileges and immunities clause of the U.S. Constitution. Another local hire ordinance known as the "Lewis Law" was struck down in Cleveland, Ohio in 2007 (read the Court of Appeals decision here).

In spite of past challenges to similar laws, the new ordinance in San Francisco shows that there is still ongoing interest from many in directing as much public funding as possible back into the local economy.

More Resources:
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Wednesday, March 23, 2011

Job Opening: Contracts Consultant

Department of General Administration (Washington State)
  • Position: Contracts Consultant
  • Location:  Olympia, Washington
  • Summary of Duties:  This position in the Office of State Procurement provides expert level statewide contracting consultant and assistance to state agency directors, managers, and contracts staff on matters related to the development and implementation of policies and procedures consistent with Washington State law.
  • Salary:  $56,000 to $68,200
  • Closing Date:  Wednesday, March 30, 2011
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Tuesday, March 22, 2011

Members Sought for WA State Project Review Committee (PRC)

Washington State's Project Review Committee (PRC), appointed by the Capital Projects Advisory Review Board (CPARB), is seeking letters of interest from individuals interested in serving on the PRC for terms that are expiring in July, 2011.

Representatives needed in 2011 for three year terms are from the following stakeholder groups:
  • Owner - Higher Education
  • Owner - Counties (2 positions)
  • Design - Engineer
  • Specialty/Subcontractor (2 positions)
  • Construction Manager
  • Minority/Women Businesses (2 positions)
  • General Owner
The Project Review Committee is responsible for reviewing and approving applications from public owners in the state on using the General Contractor/Construction Manager (GC/CM) or Design-Build processes.

For more information, including information on where and when to submit letters of interest, click here.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Monday, March 21, 2011

Port of Los Angeles Approves Project Labor Agreement (PLA)

The Port of Los Angeles approved on March 17, 2011 a Project Labor Agreement (PLA) for the next five years that will cover 95% of the Port's $1.5 billion of anticipated construction.

Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Sunday, March 20, 2011

Seattle Schools Scandal: Poor Management Oversight at Best

The Seattle Times has published an excellent article on March 20, 2011 focusing on the role of Fred Stephens, who was the supervisor of Silas Potter, the individual at the center of a Seattle School District contracting scandal exposed by the Washington State Auditor's Office and the Seattle Times.  

The scandal involves the awarding of $1.8 million of questionable contracts in support of the District's now defunct small business development program.  The scandal has resulted in the firing of the Seattle School District's superintendent and top financial officer earlier this month.

Fred Stephens is now a top official in the U.S. Department of Commerce.

Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Job Opening: Buyer at Port of Seattle

Port of Seattle (Washington)
  • Position:  Buyer
  • Location:  Seattle, Washington
  • Summary of Duties:  The position is responsible for contracting goods and services required to maintain the Port's facilities, operations, and Capital Improvement Projects, in accordance with rules and regulations as required by state law and Port policy and procedures. 
  • Salary:  $56,394 to Midpoint $70,473 annually
  • Closing Date:  Friday, April 1, 2011 at midnight

Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Thursday, March 17, 2011

Training: Cost Estimating and Contract Pricing

Cost Estimating and Contract Pricing

When:  May 18, 2011 (8:00 a.m. to 5:00 p.m.)

Where:  Tumwater, Washington

Class Outline:
  • Cost Estimating: Methods, Processes, and Sources of Risk
  • Cost Estimating Fundamentals
  • Cost Accounting Standards
  • Cost Analysis: Tools and Techniques
  • Profit Analysis:  Tools and Techniques
  • Contract Pricing Strategies, Methods, and Best Practices
  • Fixed-Price and Cost-Reimbursement Pricing Arrangemets
  • Time-and-Materials and Labor-Hour Pricing Arrangements
  • Price Analysis:  Tools, Techniques, and Best Practices
  • Total Ownership Cost in the Department of Defense
  • A Guide to Earned Value Management Systems
Instructor:  Pamela Solis, CPCM, CCCM, CFCM, Fellow, Northrup Grumman Corporation - Integrated Systems

  • Before April 15, 2011 ($200 for members; $250 for non-members)
  • After April 15, 2011 ($265 for members; $315 for non-members)
Information:  Contact Jaylene Barry at (253) 931-7317 or by e-mail at

Registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Wednesday, March 16, 2011

Understanding Federal Grant Regulations

For a great explanation of federal grant regulations relating to procurement and contracting, visit the University of North Carolina's "NC Local Government Law Blog."  

In an entry there written by Eileen R. Youens, Assistant Professor of Public Law and Government, she unpacks the complexities of federal regulations and what is common between all federal agencies (Grants Management Common Rule).  

Among the helpful links Eileen takes the reader to are the following documents:
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Tuesday, March 15, 2011

Bill to Protect Small Businesses May Actually Hurt Them

The Washington State Legislature will hold a public hearing on March 16, 2011 at 3:30 p.m. before its Senate Committee on Transportation on SHB 1384, which unanimously passed the House on March 5, 2011.

No Retainage Would Help Cash Flow of Small Businesses:  This bill would prohibit withholding of retainage on public works projects with federal transportation funding.  The purpose of the U.S. Department of Transportation (USDOT) regulations is to help the cash flow of small businesses by ensuring either prompt payment of retainage or by not withholding retainage.  The Washington State Department of Transportation (WSDOT) has proposed the legislation in order to comply with USDOT regulations.  However, rather than provide options for handling retainage as permitted in the federal regulations, SHB 1384 only authorizes one option: not withholding retainage on federally funded transportation projects.  

Unintended Consequences? While the intent of the federal regulations is to provide more timely payments to small businesses, the implementation of SHB 1384 may have unintended negative consequences on small businesses.  Because SHB 1384 would rely upon a contractor's payment bond to address any claims filed (from subcontractors, suppliers, workers, or state agencies that would otherwise be filed against the retainage), bonding companies and contractors may require payment bonds from more small business subcontractors in order to reduce risk to the contractors and sureties.

Can Small Businesses Obtain Bonds?  While increasing the cash flow for small businesses would be a benefit, with firms obtaining 100% of each progress payment, small businesses have historically had difficulty obtaining bonds.  Thus, many small businesses may find themselves unable to participate on public works projects with federal transportation funding due to bonding requirements that may be imposed.  A bill intended to help small businesses may end up hurting them in the long run.

Alternatives Are Complicated:  An alternative would be to amend SHB 1384 to include all of the options permissible by USDOT regulations regarding retainage, including requiring prompt release of retainage to subcontractors.  This option would be more administratively cumbersome for public agencies to administer, but it would encourage, rather than discourage, participation by small businesses on public works projects.  A further complicating factor, even if the legislation is amended, is that retainage is established as a trust fund for the protection of workers, suppliers, subcontractors, and state agencies for the payment of taxes and premiums.  To the extent that retainage is released early, public agencies may still pick up liability for claims if retainage related to a particular subcontractor had already been released.

More Discussion Needed:  While some form of legislation is necessary to meet the federal regulations, it is unfortunate that a well thought through solution has not been discussed with various stakeholders including public agencies and small businesses.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Monday, March 14, 2011

When Can Retainage Be Released Early?

Suppose a public agency has a construction project that is substantially complete except for a one year period required in the contract for the contractor to ensure that the plants and landscaping stay healthy and alive, or there is other remaining work that won't be completed for some period of time.  

Must the public agency continue to hold the retainage until all of the work is done, or can most of the retainage be released before the end of the one year plant guaranty period or other remaining work?

Supplemental Contract for Remaining Work:  In Washington state, there is a provision that permits a public agency to accept the project as complete, except for the remaining work, and release that retainage.  The agency then enters into a separate contract, without competition, for the remaining work that includes the value of that work.  When the remaining work is completed, that supplemental contract is accepted as complete and retainage that has been withheld on that new contract is released in accordance with the same provisions for release of retainage as applies to any public works project.

Washington State Law:  Here's what RCW 60.28.011 (7) states:
If the public body administering a contract, after a substantial portion of the work has been completed, finds that an unreasonable delay will occur in the completion of the remaining portion of the contract for any reason not the result of a breach thereof, it may, if the contractor agrees, delete from the contract the remaining work and accept as final the improvement at the stage of completion then attained and make payment in proportion to the amount of the work accomplished and in this case any amounts retained and accumulated under this section shall be held for a period of sixty days following the completion. In the event that the work is terminated before final completion as provided in this section, the public body may thereafter enter into a new contract with the same contractor to perform the remaining work or improvement for an amount equal to or less than the cost of the remaining work as was provided for in the original contract without advertisement or bid. The provisions of this chapter are exclusive and shall supersede all provisions and regulations in conflict herewith.
Other States:  Different states have different requirements for retainage release and there are different purposes attached to retainage.  In some states, such as Washington, retainage is a trust fund to ensure that various parties are paid (subcontractors, suppliers, workers, state agencies for taxes and premiums).  In other states, retainage is established as leverage for the public agency to ensure that the contractor faithfully performs and completes the work.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Sunday, March 13, 2011

Washington State Legislative Updates

Here's a quick update on a couple of bills impacting public works contracting in the State of Washington:
  • No Retainage on Federally Funded Transportation Projects:  SHB 1384 would align Washington State law with federal regulations, eliminating the withholding of retainage on federally funded transportation projects.  Claimants (subcontractors, suppliers, workers, state agencies) would only have the payment bond to bring a claim against, since retainage would not be withheld.  The bill unanimously passed the House on March 5, 2011.  A hearing on it has been scheduled for March 16, 2011 at 3:30 p.m. in the Senate Committee on Transportation.  See my previous blog entry for more information.
  • Bidding Preference for Washington State Contractors:  2SSB 5662 passed the Senate with 32 votes in favor and 13 opposed.  It now moves to the House where it will be heard by the House Committee on State Government & Tribal Affairs at 8:00 a.m. on March 16, 2011.  See my previous blog entry for more information.
  • Design-Build on WSDOT Projects:   SSB 5250  would increase the use of Design-Build on WSDOT projects to those over $1 million (down from the current $10 million) and require WSDOT to justify not using Design-Build.  The Senate passed the bill on March 3, 2011 and the House Committee on Transportation held a public hearing on it on March 10, 2011.  See my previous blog entry for more information.
  • Defining Categories of Businesses for Small Works Roster:  SHB 1173 would have amended the Small Works Roster legislation in RCW 39.04.155 by establishing various categories of business sizes and permitting public agencies to restrict solicitation of bids to small businesses.  Because it did not pass out of the House (house of origin) by March 7, 2011, it appears to be dead for this session.  See my previous blog entry for more information.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Thursday, March 10, 2011

Bidder Responsibility Workshop

How do public agencies ensure that the low bidder on a public works project is qualified and capable of performing the project?  One of the tools available in the State of Washington is the use of Supplemental Bidder Responsibility Criteria, evaluated after the bid submission deadline and prior to award.

It is an issue of great importance to both public agencies (to have the flexibility to ensure that awards go to responsible bidders) and to contractors (concerned about how the Supplemental Bidder Responsibility Criteria are being implemented by some agencies).

On Thursday, March 10, 2011, over 100 people from across the State of Washington attended a four hour workshop at Seattle-Tacoma International Airport on issues relating to the implementation of bidder responsibility on public works projects.  

Issues covered at the workshop included the following:
  • Mandatory bidder responsibility criteria
  • Subcontractor responsibility criteria
  • Supplemental bidder responsibility criteria
  • A case study on changing supplemental bidder responsibility criteria during the bidding process
  • Pros and cons of whether meeting the supplemental bidder responsibility criteria should be pass/fail or discretionary.
Small groups of six to eight evaluated and commented on live examples of supplemental bidder responsibility criteria from actual projects.

The free workshop was co-sponsored by the Capital Projects Advisory Review Board (CPARB), AGC Education Foundation, AGC, Utility Contractors Association of Washington (UCAW), Mechanical Contractors Association (MCA), and the Port of Seattle.

Speakers included the following:
  • John Ahlers
  • Dan Absher
  • Nora Huey
  • Mike Purdy
  • Paul Szumlanski
There is already discussion of possibly offering another such workshop in the fall.  If you are interested in attending a workshop in the fall, please contact Erica Peterson at the AGC Education Foundation at to get your name on the list of possible attendees.

RCW 39.04.350 is the law that was passed in 2007 authorizing public agencies to utilize Supplemental Bidder Responsibility Criteria.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Volunteers Needed to Help With NIGP's 2012 Forum in Seattle

In August 2012, the National Institute of Governmental Purchasing (NIGP) will hold their annual forum in Seattle.  The Seattle planning committee is seeking volunteers to help with this event.  If you are interested in helping, please contact [(206) 398-5440] or Tim Shay at (360) 902-7431.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Wednesday, March 9, 2011

Webinar: Reducing Construction Delays and Claims

Webinar:  Reducing Construction Delays and Claims Through the Use of Synergistic Teaming Practices

When:  Tuesday, April 5, 2011 (12:00 - 1:30 p.m. - Pacific time)

  • Dick Andrews
  • Ron Leaders
Description:  Project team coordination, problem-solving skills and behaviors and effective communication are expected standards within the normal parameters of construction management.  Industry experience demonstrates that many technically-trained staff do not have the inherent skill set or training to successfully and effectively implement these performance improvement activities for their project teams without additional support, such as Synergistic Teaming.

Information and Registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Tuesday, March 8, 2011

In-State Bidding Preference Bill Passes Washington State Senate

The Washington State Senate approved legislation on March 3, 2011 that would eventually provide for a bidding preference for resident Washington State contractors on public works projects for all public agencies.  The House has not voted on the bill yet.

Requirements of the Bill:  Second Substitute Senate Bill 5662 would require the following:
  • Survey of the States:  A survey of other states by the State Department of General Administration (GA) on their bidding preferences, to be completed by January 1, 2012 focusing on those states whose contractors often bid Washington public works projects.  The survey of the remaining states must be completed by January 1, 2013.
  • Reciprocity Requirement:  Resident Washington State contractors bidding on a public works project in the State of Washington would receive a bidding preference against out-of-state contractors also bidding the project in the amount of the bidding preference allowed by state the contractor is from.
  • Notify Public Agencies:  GA would be required to notify all public agencies in the state who procure public works of the results of the survey and the requirements of bidding preferences in Washington.
  • Rules and Legislation Coming:  GA must adopt rules to implement the bidding preference reciprocity provisions.  GA must also draft legislation by December 1, 2011.
Issues with Bidding Preferences:  While it is understandable why many are pushing for a local bidding preference for Washington contractors, this is a complex issue and fraught with a number of problematic issues:
  • Complexity of Defining Resident Contractors:  Defining, and identifying what contractors are resident Washington State contractors will impose a costly administrative burden on GA and/or all public agencies performing public works.  The language included in the original version of this bill SB 5662 had a complicated and questionable formula for determining what contractors would qualify as a resident contractor.
  • What Contractors Will Be at a Disadvantage?  Depending on how the requirements are drafted, it may put many contractors with a significant and historical presence in Washington at a disadvantage.
  • More Costly Public Works Projects:  A bidding preference statute will also cost state and local governments additional money in awarding public works projects in the amount of the bidding preference percentage authorized by other states.  At a time when government agencies are increasingly strapped financially, providing the bidding preference will mean that the public's money will not go as far for capital improvements and new construction.
  • Increased Bid Protests:  Bidding preferences may result in an increase in bid protests, resulting in project delays and additional costs.
SSB 5662 would appear to only delay the implementation of the requirements included in the original SB 5662, which contain many problematic provisions.  

Previous Blog Entry:  See my previous blog entry on SB 5662.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Monday, March 7, 2011

New SBA Program Aims to Increase Federal Contracting Opportunities for Women-Owned Small Businesses

New rules from the Small Business Administration (SBA) that went into effect on February 4, 2011 are designed to provide new opportunities for Women-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs).

The new regulations give Federal contracting officers the authority to set aside some contracts specifically for WOSBs or EDWOSBs, subject to a number of restrictions:

WOSB Set Aside EDWOSB Set Aside
Industries NAICS code assigned to solicitation, IFB or quote is in an industry in which WOSBs are substantially underrepresented (38 4-digit NAICS designated) NAICS code assigned to solicitation, IFB or quote is in an industry in which WOSBs are underrepresented (45 4-digit NAICS designated)
Rule of two Contracting officer has reasonable expectation that 2 or more WOSBs will submit an offer
* Note: All EDWOSBs are WOSBs
Contracting officer has reasonable expectation that 2 or more EDWOSBs will submit an offer
* Note: Not all WOSBs are EDWOSBs
Award price • Anticipated award price including options does not exceed the statutory thresholds of $5M for manufacturing or $3M for other contracts
• Contract can be awarded at fair market price


More Information:  The Small Business Administration has a section of their site dedicated to the WOSB program at, which includes several excellent resources, including:
  • An introduction to the program (PDF) in the form of presentation slides that contains a good high-level overview, including eligibility requirements for WOSBs and EDWOSBs, getting certified as a WOSB or EDWOSB, and steps to participate and take advantage of the program
  • A 3-page fact sheet (PDF) that gives an overview of the program, eligibility requirements, the certification process, and criteria for contracting officers to set aside a requirement
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Sunday, March 6, 2011

Beware of Change Orders Outside Project Scope

The Washington State Auditor's Office issued findings against the City of Bremerton (WA) for the following issues during a $2.35 million construction project at Memorial Plaza:
  • Change Orders Outside of Project Scope: The City approved 19 change orders (totaling $584,970) that the Auditor found to be outside the scope of the original project, and so should have been bid separately. The bulk of the costs of the change orders were related to adding a restroom, which City employees did not realize was outside the project's original scope. Employees "also believed they could achieve cost savings by using the same vendor who was already working on the Memorial Plaza project."
  • Sole-Source Purchase: The City's Project Manager incorrectly declared a $135,000 barrier wall a sole-source purchase without City Council approval, which the City code requires for contracts over $25,000.
Practical Tips:
  • Understand Scope: Make sure that staff who are managing a project fully understand its scope.
  • Review Change Orders: Have procedures in place to carefully review all change orders, including checks and balances to be sure they fall within the scope of the original project.
  • Policy Training: Review employee training to ensure staff are fully informed about the laws and policies that govern their decision-making.
Audit Finding: Click here to read the three page audit finding (the second finding in the linked document, beginning on the third page)
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Job Opening: Performance Contract Manager (Olympia, WA)

The Department of Social and Health Services is recruiting to fill a Performance Contract Manager position.

Salary: $60,768 - $75,888 annually

Job Location: Olympia, Washington

Position Description Summary: This position is responsible for formulating, administering, interpreting and applying, across all DSHS Administrations, performance-based contracting requirements within the context of statewide procurement and contracting laws, rules, and policies. In addition, this position has lead responsibility for providing consulting and technical assistance and serves as the Key Contract Coordinator to the DSHS Executive Administration.

More Information: Click here

Application Deadline: Wednesday, March 9, 2011 at 5:00 p.m.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Wednesday, March 2, 2011

Contracting Scandal Fallout: Seattle Fires Schools Superintendent

The Seattle School Board voted unanimously on Wednesday night, March 2, 2011, to fire the superintendent,  Maria Goodloe-Johnson.

Lack of Management Oversight:  The school board's action of dismissing Goodloe-Johnson, came as the board attempted to restore the public's confidence in a district shaken badly by allegations of contracting fraud and mismanagement of public money.  Goodloe-Johnson was fired for lack of management oversight relating to a scandal involving award of millions of dollars of questionable contracts awarded by a mid-level manager as part of the school district's small business development program.  The program, which has since been phased out, was designed to help ensure small and minority businesses were competitive on the district's construction projects.  The school board noted there were enough warning signs of inappropriate activity by district employees that Goodloe-Johnson should have paid attention to and taken corrective action on.

Fraudulent Activity:  At the center of the scandal is Silas Potter, who ran the small business program, until he resigned in June 2010 amid fraudulent activity of depositing a check made out to the school district into the bank account of a separate company he set up bearing the same name as the school district's program.

Potter Denies Wrongdoing:  When the Seattle Times caught up with Potter in Florida on Wednesday, Potter stated that he had done nothing wrong.  "I've been thrown under the bus," he stated, alleging that he was simply following orders of his supervisor, Fred Stephens, now an official with the federal government.  But he went on the state that he was prepared for whatever might happen, even "if I have to serve time" in jail.

CFO Also Fired:  The Seattle School Board also voted on Wednesday to fire the district's chief financial and operations officer, Don Kennedy.

Audit Report:  The scandal became public when the Washington State Auditor's Office published its audit findings recently.

More Information:  Click here to read my earlier blog posting on this scandal, which includes links to the state audit report, a report of an independent attorney hired by the school board, and articles from the Seattle Times.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

City Failed to Comply With Competitive Bidding Requirements

The Washington State Auditor's Office has issued a finding that the City of Long Beach, Washington did not competitively bid or use its Small Works Roster to obtain three quotes for a $41,935 public works project to update its beach pavilion.

Out of Compliance:  Furthermore, on three public works projects the auditor examined, the city:
  • Did not have a signed contract with the contractor prior to work beginning
  • Failed to obtain required prevailing wage documentation
  • Failed to obtain a bid bond and performance bond
  • Did not withhold retainage from each progress payment as required
  • Did not submit the Notice of Completion form to the state
No Change Order Processes:  The audit also noted that the city did not have a documented change order review process, that there was no evidence that the city formally approved any change orders, nor was there evidence that the city had performed an independent estimate or cost engineer review prior to the changes.

City's Response:  The city responded by concurring with the audit findings and noting they would comply with the requirements in the future.

Click here to read the audit finding.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Tuesday, March 1, 2011

States Target Use of Project Labor Agreements

Iowa Governor Terry E. Branstad has issued Executive Order 69 rescinding the executive order of the previous governor mandating the use of Project Labor Agreements (PLA).  Governor Branstad's order prohibits the use of PLAs on state and local agency construction projects.

The Idaho Legislature has sent Senate Bill 1006 to Governor C.L. "Butch" Otter for his signature.  The bill would, among other things, ban the use of PLAs on public works projects in the state.

Project Labor Agreements are a highly controversial tool that pit organized labor interests against non-union or merit shop contractors. Merit shop contractors argue that PLAs restrict competition to union contractors only, while organized labor argues that PLAs are an effective tool for ensuring the safety and continuity of projects by requiring the contractor to utilize union labor on public works projects.

President Obama has issued an executive order encouraging use of PLAs on federal construction projects.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Seminar: Infant to Adolescent - States of Design-Build Awareness

Infant to Adolescent - Stages of Design-Build Awareness

When:  Thursday, March 31, 2011 (7:15 a.m. to 11:45 a.m.)

Where:  Seattle (Dome Room, Arctic Club Hotel, 700 Third Avenue)

Speaker:  Barbara Jackson, PhD, DBIA is the Director, California Center for Construction at Cal Poly State University.

  • $210 - DBIA members
  • $250 - Non-DBIA members
  • $150 - Owners
Information and Registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC