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 

No comments: