Sunday, May 22, 2011

The Risks of Piggybacking

The practice of "piggybacking" on another agency's bid solicitation can save money by eliminating a redundant requests for bids, but also has its share of pitfalls.

The Washington State Auditor's Office recently issued a finding against the Whatcom County Fire Protection District No. 8 for failing to properly scrutinize a piggybacking purchase and for improperly engaging in a sole-source purchase.

Piggybacking: The District bought over $170,000 of firefighter breathing apparatus and related equipment using a piggybacking agreement, but didn't adequately ensure that the lead agency whose solicitation they used had followed bid laws. The Auditor noted that when using piggybacking, the following conditions must be met by the entity using another government's solicitation:
  • Award meets its own bid requirements.
  • Lead government advertised in accordance with its own statutory requirements.
  • Lead government posted the bid or solicitation notice on the website established and maintained by a government, purchasing cooperative or similar service provider.
  • Lead government’s request for bids allowed for the contract to be used by more than one local government.
Sole-Source Purchase: The District also spent over $12,000 on other equipment that was only available from one vendor. While competitive bidding can be waived if there is genuinely only one vendor for a purchase, the Auditor found that the District "did not take the required steps to declare this a sole-source purchase," including formally passing a resolution.

Practical Tips: Any time the full competitive bidding process is abbreviated or bypassed, extra care must be taken. Make sure you and your agency's procurement staff understand the limitations the law places on alternative procurement methods, and the steps that must be taken if such a method is used. This often involves factual findings about the situation, a formal decision to use an alternate procurement method (possibly including a resolution passed by the agency's governing body), advertising properly, and documenting every step of the process. Remember the goal of being a good steward of public money and getting the best value for taxpayer projects.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

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