Monday, October 31, 2011

Survey on Cost Estimates for Public Works Projects

One of the questions that often comes up when I provide training on public works contracting issues is how construction cost estimates are developed and made known to contractors.  

I have developed a survey with just five questions to collect responses from various public agencies on what their practices are.
  • Fast and Easy:  It should take you just a few minutes to complete the survey. 
  • Closing Date:  The survey will close at 5:00 p.m. on Friday, November 18, 2011.

  • Survey Results:  I will aggregate the results of the survey and share them on my blog.

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

Sunday, October 30, 2011

Does Decentralization of Procurement Work in Tight Budget Times?

According to one recent estimate, public agencies cutting 35,000 jobs a month as the Great Recession takes its continuing toll.  

Job Cuts in Procurement and Contracting:  As agencies eliminate jobs, the area of procurement and contracting is not exempt.  And yet the work of developing bids and solicitations, negotiating contracts, complying with grant requirements, and administering contracts continues - just with fewer centralized staff.

Impacts of Decentralization:  The economy has forced some agencies to decentralize parts of their procurement and contracting functions by delegating authority to departments who have the direct need for the services.  There are a number of risks associated with decentralization including the following:
  • Increased Bid Protests:  Increased bid protests as inexperienced staff manage the process.
  • Project Delays:  Delays in projects due to lack of familiarity with how to procure goods and services.
  • Audit Findings:  Audit findings by state and federal auditors for failure of agencies to follow applicable procurement regulations.
  • Loss of Accountability:  Unclear scopes of work written by department staff without the benefit of centralized review.  This may result in contractual problems of holding businesses accountable for the work contracted for.
  • Higher Costs:  Higher costs for agencies who no longer have the strategic procurement and contracting experts to help get the best deal for the public agency.
  • Ethical Issues:  Questionable ethical behavior by public sector employees not sensitized to, or aware of, the importance of maintaining a fair and transparent bidding and selection process.
What Work is Decentralized?  Some agencies have decentralized lower dollar value procurements back to departments.  Others have increased use of government issued credit cards as a means to deal with reduced staffing.

Managing the Decentralization:  As the economically driven decentralization continues, here are a couple of actions that agencies can take to help reduce negative consequences:
  • Training:  Provide in-depth training to staff who have been delegated with responsibility for procurement and contracting.  The training should also include training on ethics in public contracting.
  • Procedures:  Establish clear policies and procedures to deal with the new environment.
  • Checklists:  Develop simplified checklists that can help those doing procurement and contracting with knowing how to follow the right steps.
  • Check and Balances:  Ensure there are sufficient checks and balances in place to reduce risks of one person taking inappropriate procurement and contracting actions.
  • Ongoing Pre-Audits:   Establish a process for regular pre-audits by either agency staff or outside experts to ensure the process is working properly, and to help make changes where necessary.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Thursday, October 27, 2011

House Votes to Repeal 3% Withholding Tax

The House of Representatives voted overwhelmingly on Thursday, October 27, 2011 - by a vote of 405-16 - to repeal a 2005 law that would require federal, state, and local agencies with expenditures of $100 million or more to withhold 3% of every payment over $10,000 to all contractors, consultants, and vendors, and send the money to the IRS.  The 3% withholding was designed to help ensure that businesses pay income taxes to the IRS.

The rare bipartisan support of the legislation reflects concerns expressed by more than 140 business and government associations.  President Obama had proposed a one year extension (from January 1, 2013 to January 1, 2014) on the implementation of the 3% withholding tax in his American Jobs Act.  But the House went one step further, voting to repeal the law.  The House measure is supported by the President, and it is anticipated that the Senate will take up the very soon, where it is expected to pass.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Wednesday, October 26, 2011

When Should Bidding Documents be Made Available to Bidders?

Making bidding documents available to bidders early - or late - both have negative consequences to the bidding process.

Early Availability of Bidding Documents:  A public agency that provides bidding documents to some bidders prior to the advertisement in the newspaper, or prior to notification to contractors on a small works roster, gives those bidders a competitive advantage over the other bidders. The bidders who receive the bidding documents early have additional time in which to review the documents and prepare their bid.  
  • Protests:  Providing bidding documents to some bidders early increases the risk that a public agency will receive a bid protest from other bidders who were not afforded the additional time.
  • Transparency:  In public contracting, it is important that the process be fair and transparent, and that it builds the confidence of the contracting community and the public in the integrity of the process. Providing bidding documents early to some bidders creates a perception that the public agency is favoring some bidders over others, and that the process is not an open one
Late Availability of Bidding Documents:  When a public agency announces through an advertisement or a roster process that the bidding period has begun, the bidding documents should be available right away.  Failure to have documents available reduces the effective bidding period.
  • Non-Compliance with Laws:  Reducing the time allowed for bidders to prepare their bids may result in a shorter time period for bidding than applicable laws may require.
  • Fewer Bidders:  Not having the bidding documents availability immediately gives less time for bidders to actually prepare their bids.  As a result, some bidders may choose not to bid given the shortened time period.
  • Higher Bid Prices:  Finally, reducing the bidding period by not having the bidding documents available when the project is publicized may result in bids that are not competitive.  If bidders do not have sufficient time to review the documents, understand the project, and assess the risks, they may increase their bid price to deal with these issues.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Tuesday, October 25, 2011

Preventing Early Opening of Bids

When bids are submitted to a public agency there is a risk that a bid may simply go through the agency's normal process for opening and routing mail.  This may result in a sealed bid being inadvertently opened prior to the deadline and time established for opening and reading the bids, compromising the integrity and confidentiality of the bidding process.

Practical Tips:  The following are some steps that may help ensure that bids are opened at the appropriate time:
  • Bidding Instructions:  Ensure that the agency's bidding instructions are clear about the information that must be identified on the face of the bid envelope.
  • Staff Training:  Provide training to reception and mail room staff responsible for receiving deliveries and mail to the agency.  Make sure they understand they should not open mail that is indicated as including a bid inside the envelope.  This applies for whether a bid is received through the U.S. Postal Service, FedEx, UPS, another delivery service, or in person.
  • Notice to Reception Staff:  Work with reception and mail room staff and provide them with an updated list and schedule of the deadlines for when bids for certain procurements are due.  Having this list can help alert them to slow down and not open these but to deliver them to the appropriate procurement staff.
  • Managing a Bid Opened Early:  If a bid is accidentally opened early, do not remove the bid from the envelope, but re-seal the envelope immediately.  If the bid has already been removed from the envelope, put it back in the envelope and re-seal the envelope.  If the envelope is missing, put the bid in another envelope and seal it.  Regardless of the circumstances, document on the face of the envelope that the bid was inadvertently opened, along with the date and time you re-sealed it.  Initial or sign the statement.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Job Opening: King County (WA) Procurement Manager

King County (Washington)
  • Position: Procurement Manager
  • Location: Seattle, Washington
  • Closing Date:  Open until filled
  • Salary: $94,074.86 to $119,245.57 annually
  • Job Summary: The position manages the Procurement and Contract Services Section which provides support to County agencies so that they can meet their ongoing purchasing and contract needs.  The section is comprised of 45 staff and supervisors divided into the following work units or programs:  goods and services; engineering and construction services; technical and consulting services; project controls; environmental purchasing program; and a purchasing card program.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Monday, October 24, 2011

Washington State's Minimum Wage to Increase in January 2012

The State of Washington's minimum wage will increase effective January 1, 2012 from $8.67 to $9.04 per hour, keeping it as the highest minimum wage in the nation.  

The wage rate is adjusted annually based on changes in the Consumer Price Index, according the the Department of Labor and Industries.

For most classifications and counties, the prevailing wage rates that must be paid to workers employed on public works construction projects, are higher than the minimum wage.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Issues, Trends and the Value of Contracting Organizations

The South Sound Chapter of the NCMA (National Contract Management Association) will host an Executive Round Table Breakfast discussion on "Issues, Trends and the Value of Contracting Organizations."

When:  November 8, 2011 (7:30 a.m. to 9:30 a.m.)

Where:  Tumwater, Washington (River's Edge, 4611 Tumwater Valley Drive)

  • Christine Warnock, Chief Procurement Officer, Washington State Department of Enterprise Services
  • Ruth Van Sickle, Executive Vice-President, Mission Support Services, Cubic Corporation
  • Ralph Lentz, Deputy Director, Management Services Center, General Services Administration
Information and Registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Sunday, October 23, 2011

May Agencies Contract with Other Agencies for Architectural and Engineering Services?

The Washington State Attorney General's office recently published a legal opinion on whether public agencies in the state can contract with other agencies to provide architectural and engineering services through the use of an interlocal agreement, but without complying with the selection provisions of RCW 39.80.020.

The Question:  Here's the specific question that was asked by State Senator Michael Baumgartner:
May a state or local agency or special district contract directly with another agency for architectural or engineering services, all as defined in RCW 39.80.020, without first complying with the procurement procedures specified in RCW 39.80?
The Answer:  The Attorney General's opinion states that public agencies must comply with RCW 39.80.020 when acquiring architectural and engineering services, and that "the Interlocal Cooperation Act, RCW 39.34, does not excuse compliance with those requirements, but does allow public agencies to join together in acquiring such services."

The Legal Opinion:  Rather than attempt to restate the Attorney General's reasoning, I suggest you read the opinion yourself if this subject applies to you.  The six page legal opinion refers back to a 1990 opinion on the subject that was more limited in scope.  The new opinion recognizes that there may be some statutes that "independently authorize an agency or special district to contract directly with another agency or special district for architectural or engineering services." 

Implications:  The legal opinion may have negative consequences for some public agencies who rely upon other agencies for providing architectural and engineering services through the use of an interlocal agreement.  Clearly, there are competing interests involved with this issue.  
  • Public Agency Interests:  Public agencies may find that the most efficient manner of acquiring some of these services is from another agency.  However, given the opinion from the Attorney General's office, this doesn't appear to be an option for agencies that do not have specific legislative authority. 
  • Consultant Interests:  Especially in this difficult economy, architects and engineers may view provision of these services by public agencies for other agencies as a limitation of their potential workload, and they will welcome the Attorney General's opinion.  
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Design-Build Transportation Projects in Washington

Design-Build Transportation Projects in Washington

When:  November 9, 2011 (7:15 a.m. to 9:00 a.m.)

Where:  Seattle, Washington (Dome Room at the Doubletree Arctic Hotel, 700 Third Avenue)

  • Tom Rutherford, City of Tacoma (Murray Morgan Bridge Rehabilitation)
  • Lisa Hodgson, WSDOT (I-405 Corridor)
  • Brian Neilson, WSDOT (Alaskan Way Tunnel Project)
Sponsored by:  Northwest Region of DBIA (Design-Build Institute of America)

  • $65 - DBIA members
  • $90 - Non DBIA members
Information and Registration:  Click here.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Wednesday, October 19, 2011

New Mexico Revises Bid Preference Law

New Mexico has revised its bid preference law.  The action follows a national trend of states and local agencies establishing or modifying bid preference requirements.

NM Gov. Susana Martinez
Changes in New Mexico's Law:  Under SB1, a bill approved by the legislature and signed by Governor Susana Martinez on October 5, 2011, the state:
  • Eliminated a provision that made the bid preference only applicable to bids less than $5 million
  • Established a process and new definitions for certifying what businesses qualify as in-state or resident businesses
5% Bid Preference:  The new legislation, which is effective immediately, provides that resident businesses receive a 5% bid preference advantage over out-of-state businesses.

Washington State's Bid Preference Law: The State of Washington adopted bid preference legislation (2SSB 5662) this year that will go into effect once the Department of Enterprise Services (formerly Department of General Administration) establishes rules for its implementation.  The state has already completed a survey of the bid preference practices of all states, a task required by the new law, before implementation of regulations.  For more information about Washington's new law, visit my May 24, 2011 blog entry outlining the provisions of the legislation.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Tuesday, October 18, 2011

Congressional Committee Votes to Repeal 3% Withholding Tax

The House Ways and Means Committee voted on October 13, 2011 to repeal the 3% withholding tax on payments made to contractors, consultants, and vendors by federal, state, and local agencies with annual expenditures of $100 million or more.  

The measure, H.R. 674, will go to the full House in the next couple of weeks for a vote.

Unless repealed by Congress, the law will go into effect on January 1, 2013.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Monday, October 17, 2011

Two Day Training on GC/CM

The alternative public works contracting delivery method known as GC/CM (General Contractor/Construction Manager) is continuing to find popularity with public agencies in the State of Washington.

GC/CM Nationally:  Across the country, GC/CM is known by different names such as Construction Manager (CM) at Risk, or CM/GC.  Regulations and practices differ by state.

Training on Washington's GC/CM Law:  In Washington state, GC/CM is authorized and regulated by RCW 39.10.  Public agencies and contractors interested in finding out more about GC/CM may be interested in a two day training event to be offered in January 2012.  I will be part of a panel discussion on the second day of the training.

When:  January 12-13, 2012 (8:00 a.m. to 5:00 p.m.)

Where:  Seattle, Washington (AGC Building, 1200 Westlake Ave. North)

Sponsored by:
Cost:  $350

Information and Registration:  Click here.

More GC/CM Information:  Visit the GC/CM subject index of my blog.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

Sunday, October 16, 2011

The Advantages of On-Call Contracts for Architectural and Engineering Services

What is an On-Call A/E Contract?  Public agencies often have ongoing needs for architectural and engineering services.  Rather than go through a separate selection process each time the need for such services arises (whether through a project-specific advertisement and selection process, or selection from among firms on an established roster), some agencies will advertise for on-call services.  

Features of an On-Call A/E Contract:  Features on an On-Call A/E Contract include the following:
  1. Public advertisement soliciting statements of qualifications
  2. Issuance of a Request for Qualifications (RFQ)
  3. Established evaluation criteria publicized in the RFQ
  4. Scope of work defined for a specific discipline or focus within an A/E discipline
  5. Selection of the most qualified firm
  6. Negotiation of fully loaded hourly rates and markups
  7. Execution of an On-Call contract
  8. Negotiation of scope and amount for specific assignments
  9. Execution of work orders for specific assignments
  10. Maximum dollar threshold by policy for each work order
  11. Maximum dollar amount by policy for the life of the On-Call A/E Contract
    On-Call A/E Contracts vs. A/E Roster:  Some public agencies will establish an A/E Roster consisting of the qualifications of firms who have expressed an interest in doing business with the agency.  Depending on specific agency policies, rather than advertising for each need for A/E services, the agency will conduct an informal evaluation process (not advertised) and select a firm from the Roster.  On the other hand, an On-Call A/E Contract is an advertised solicitation for anticipated work, while firms on the A/E Roster are not evaluated until a specific project comes up.  

    Advantages of an On-Call A/E Contract:  One of the advantages of an On-Call A/E Contract is that it is more streamlined than selection from an A/E Roster since formal solicitation, selection, negotiation of basic rates, and contracting have already occurred.  It is also more streamlined than a project-specific advertisement and solicitation in that solicitation and selection for multiple assignments occurs under just one solicitation process.

    How Long Can an On-Call A/E Contract Last?  If a public agency advertises for an On-Call Contract for Architectural and Engineering (A/E) services, how many years can the contract last?  Public agencies who use On-Call A/E Contracts often do so in order to save administrative time and expense involved in frequent advertising and selection processes.  A typical duration is one year with the option to extend it for up to two additional one year periods.  In evaluating the duration of an On-Call A/E Contract, agencies should not establish such a long period of time such that no other firms have the option to compete for public contracts.  New firms are constantly being formed and firms reorganize with different and experienced partners from other firms. 

    Advice from the State Auditor's Office:  Recently, there was some confusion when the Washington State Auditor's Office went on record with one public agency and stated that an On-Call A/E Contract should be limited to one year only.  Since then, the Auditor's Office has indicated that multi-year On-Call A/E Contracts are acceptable, but have outlined the following issues that should be addressed if an agency chooses to use an On-Call A/E Contract:
    • Price Updates:  There should be an annual update of price information from the consultant.
    • Qualifications Updates:  The consultant should update their qualifications on an annual basis.  The update should include a statement that they are not debarred, and that they are up to date in their quarterly payments of workers compensation premiums to the Department of Labor and Industries.
    • Prevailing Wages:  To the extent that any of the work under the On-Call A/E Contract requires payment of prevailing wages, the consultant must file a Statement of Intent to Pay Prevailing Wages for the On-Call Contract, and an Affidavit of Wages Paid for each applicable task or work order under the On-Call Contract.
    • Document Selection Process:  If the public agency has selected more than one consultant for an On-Call Contract for the same type of work, the agency should document the  process by which the selection for a particular task or work order was made.
    Establish Agency Policies:  If your agency selects A/Es through different processes (advertise specific project, select from a roster, use an on-call contract), it is important to have clear agency policies that identify when a roster or on-call contract may be used.  These policies should address the dollar thresholds for the work along with other relevant factors.

    What Laws and Regulations Apply?  Public agencies need to carefully understand what federal, state, local, and agencies laws and policies apply in any circumstance.  In Washington State, selection of A/E consultants is governed by chapter 39.80 RCW, and covers the disciples of architecture, engineering, landscape architecture, and land surveying.  Selection of A/Es and related disciplines on federally funded projects is governed by the federal Brooks Act. 

    Your Opinion and Experiences:  I'm interested in learning what you agency's policies are regarding use of On-Call A/E Contracts and A/E Rosters.  Please leave a comment on the blog, contact me, or send me a copy of your policies.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Wednesday, October 12, 2011

    Public Works Contracting: How to Get the Best Value from a Weak Economy

    Public Works Contracting:  How to Get the Best Value from a Weak Economy

    When:  Wednesday, November 2, 2011 (10:30 a.m. to 2:30 p.m.)

    Sponsored by: Foster Pepper PLLC (law firm)

    Where:  Seattle, Washington (1111 Third Avenue)

    Speakers and Topics:
    • Low Price = Good Value? Establishing Bidder Responsibility and Performance Capacity (Steve DiJulio - Foster Pepper PLLC)
    • When Low Price is Not Enough - Utilizing Alternative Procurement Methods (Greg Guedel - Foster Pepper PLLC)
    • Project Management - Turning a Good Contract into a Good Project (Mike Purdy - Michael E. Purdy Associates, LLC)
    • The View from the Other Side - Contractor Perspectives on Facilitating Project Success (Tom Peterson - Hoffman Construction Company)
    Information and Registration:  Click here.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Tuesday, October 11, 2011

    The Risks of Decentralized Procurement

    Many public agencies, especially smaller ones, do not have a centralized procurement and contracting function.  There are risks involved in such an organizational structure.

    Educating Managers:  In a decentralized procurement model, it is up to each department and the directors and managers of those departments to understand what is permissible under applicable federal (if federal funding is involved), state, or local laws and regulations.

    Complexities of Public Procurement:  Because public procurement is often complex, and operational departments have their own responsibilities and areas of expertise, without a centralized procurement function, often procurement activities occur that are in violation of applicable regulations.

    Audit Finding:  The City of Arlington, Washington recently received an audit finding from the State Auditor's Office after the Fire Department contacted three vendors to provide quotes to provide a new ambulance for the city.  The city's 1994 vehicle had broken down and could not be repaired.  But the $128,142 purchase far exceeded the city's $7,500 threshold, above which formal advertised competitive bids should have been received.  Instead, the city only received one quote, informally solicited.  The Fire Department took the purchase to the City Council who approved the purchase, not realizing that the procurement needed to be either through advertised bids or approved by a specific emergency resolution.

    Practical Tips:
    1. Point Person:  Public agencies without a centralized procurement function should designate at least one person to become the resident expert on procurement and contracting.  
    2. Approval Process:  There should be a deliberate internal approval process for purchases and contracts with checks and balances.
    3. Policies and Procedures:  Agencies should develop clear procurement and contracting policies and procedures, making use of easy to follow checklist to help ensure compliance with regulations.   
    4. Training:  Agencies should regularly provide training to personnel on procurement and contracting issues to raise the level of awareness.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Monday, October 10, 2011

    Why Ethics in Public Contracting Matters

    Last week, I gave a two hour talk (with lots of good questions and comments) on "Avoiding the Front Page of the Newspaper:  Why Ethics in Public Contracting Matters."  

    The occasion was a meeting of the Pacific Northwest Public Purchasing Association (PNPPA), holding their fall workshop in Port Townsend, Washington.

    Here's an outline of the topics I covered:
    • Public Service is a Public Trust
    • 5 Keys to Making Ethical Decisions
    • What's So Important About Appearances?
    • Why Do We Have Public Contracting?
    • 5 Risks of Ethical Lapses
    • Is It a Conflict of Interest?
    • What Ethics Laws and Standards Apply?
    • What Gifts Can I Accept?
    • The Ethics of Contract Administration
    • The Ethics of Internal Politics
    • What Trends in Public Contracting Affect Ethics
    • Resources
    If you're interested in having me speak to your agency, please contact me.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Cooperative Purchasing is Focus of Annual Training Conference and Trade Show

    The Washington State Department of Enterprise Services (previously General Administration) is hosting its annual Training Conference and Trade Show.

    When:  October 26, 2011 (12:00 p.m. to 4:00 p.m.) and October 27, 2011 (8:00 a.m. to 3:00 p.m.)

    Where:  Tacoma, Washington (Greater Tacoma Trade & Convention Center)

    Training Topics Include:
    • Two Tier Contracts
    • Managed Print Services
    • Understanding Small Works
    • WEBS - NIGP Update
    • Printer Services - An Overview
    • Preparing Your Own Bids and Quotes
    • eProcurement Update
    • Cooperative Contracting
    • Magic with your Credit Card
    • Cooperative Opportunities
    • State Purchasing Certification
    • IT Professional Services (ITPS)
    • Building for the Future by Building a Well-Trained Workforce
    • Upcoming Contracts
    Information and Registration:  For more information and to register for attending, visit the home page for the Annual Training Conference & Trade Show.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Sunday, October 9, 2011

    Checking Federal Debarment of Contractors

    One of the "strings" that comes with federal funding to state and local agencies is the requirement to check that contractors, consultants, and vendors are not debarred by, or suspended from doing business with, the federal government.

    It's really a very simple requirement, but it is one of the most commonly overlooked requirements, resulting in frequent audit findings.

    The Requirement:  Here's what the Washington State Auditor's Office wrote about the requirement when issuing a recent finding to a conservation district:
    "Recipients of federal grants are prohibited from contracting with or making subawards to parties that are suspended or debarred from doing business with the federal government.  For vendor contracts of $25,000 or more and all subawards, the District must ensure the vendor or subrecipient is not suspended or debarred.  This can be accomplished by obtaining a written certification from the vendor or subrecipient stating that its organization has not been suspended or debarred.  Alternatively, the District may check for suspended or debarred parties by reviewing the federal Excluded Parties List issued by the U.S. General Services Administration.  This requirement must be met prior to making the first payment to the vendors and subrecipeints."
    Recent Audit Findings:  The following public agencies recently received audit findings from the Washington State Auditor's Office for failing to monitor the suspension and debarment status of contractors on federally funded projects:
    Checking for Debarment:  The federal government's Excluded Parties List System (EPLS) may be accessed online at to check the suspension and debarment status of any business.  Be sure to print a copy of the results of this search and keep it in your contract file as documentation of compliance.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Wednesday, October 5, 2011

    Weekly Certified Payrolls Required of Contractors and Subcontractors on Federally Funded Construction Projects

    For Public Agencies:  If your agency receives federal funding for a public works construction project, one of the requirements is that you collect, on a weekly basis, certified payroll reports from the contractor and all subcontractors.  

    Review and Monitor Payrolls:  Public agencies must also review and monitor the payrolls, and conduct employee interviews on the construction site to ensure that the workers, by job classification, are being paid at least the prevailing wage rate established by the U.S. Department of Labor for the county in which the project is located.  When there is a difference between the federal Davis-Bacon prevailing wages and the applicable state prevailing wages, the contractor and subcontractors are required to pay the higher of the two wages.

    For Contractors and Subcontractors:  Contractors and subcontractors working on a public works construction project, should know the funding source for the project and the accompanying prevailing wage and payroll reporting requirements.  Contractors and subcontractors must submit weekly certified payroll reports to the public agency, and must actually pay the workers each week.

    Audit Findings:  Three cities in Washington state recently received audit findings from the Washington State Auditor's Office for failing to collect weekly certified payroll reports from the contractor and subcontractors on federally funded public works construction projects:
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Tuesday, October 4, 2011

    Movement to Delay or Repeal 3% Withholding Tax

    Pressure continues to mount nationally for a delay or repeal to the 3% withholding tax that would require all federal, state, and local governments and agencies with annual expenditures in excess of $100 million to withhold 3% of each payment over $10,000 to vendors, contractors, and consultants, and send the money to the IRS for income tax purposes.

    Delay Proposed in President's Jobs Bill:  The latest development comes from a provision in President Obama's proposed American Jobs Act that would delay implementation of the 3% withholding tax until January 1, 2014.  Recently, the IRS administratively delayed implementation of the provision until January 1, 2013 from January 1, 2012.
    Purpose of the Law:  The 3% withholding tax was passed by Congress as part of the Tax Prevention and Reconciliation Act of 2005, and its implementation has been delayed based on a variety of concerns.  The law is intended to improve compliance of income tax payments by businesses and add money to the federal government's coffers. 
    Negative Consequences of the Bill:  Businesses argue that the 3% withholding tax will hurt cash flow and creation of new jobs and cause an increase in prices they charge to the government.  For government agencies, it will be expensive to make changes to financial systems to implement the law.  Some public agencies have already begun the process of making the necessary programming changes to implement the law. 
    AGC Speaks Out Against the Law:  The Chief Executive Officer of the Associated General Contractors (AGC), Stephen E. Sandherr, testified before the IRS on September 12, 2011 about concerns related to the 3% withholding law that will, unless Congress repeals or delays it, go into effect on January 1, 2013.  Click here to read Sandherr's eight pages of testimony.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Monday, October 3, 2011

    King County (Washington) Adopts Small Business Preference Program

    Recognizing the importance of job creation in the economy by small businesses, the Metropolitan King County Council  (WA) adopted an ordinance on September 26, 2011 to encourage and promote the use of small businesses in the county's contracting. 

    Competition Amongst Small Businesses:  The Small Business Accelerator program will limit competition on the purchase of certain goods and services to small businesses certified by the county, thus making it easier for small businesses to be competitive in obtaining work from the county.  

    Applicability of New Program:  The new program will apply to purchases of $25,000 or more for goods purchased by the county's Wastewater Treatment and Transit divisions, and for the procurement of technical and nonprofessional services for all county departments.

    Video:  To view the video of the Council's public hearing on Ordinance 2011-0380, click here.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC

    Sunday, October 2, 2011

    Free Webinars on MRSC's Rosters for Construction and Consulting

    Many public agencies solicit bids and proposals from contractors and consultants on rosters, rather than advertising each project separately.  When and whether to use rosters is generally a matter of either state or local laws.

    MRSC Rosters:  The Municipal Research and Services Center (MRSC) announced that it will offer three free webinars describing how its small public works and consultant rosters operate.

    When:  The webinars will be held from 10:00 a.m. to 11:00 a.m. on the following dates:
    • October 4, 2011 (Tuesday)
    • October 20, 2011 (Thursday)
    • October 26, 2011 (Wednesday)
    Information and Registration:  For more information and to register for attending one of the free webinars, visit MRSC's website.

    Other Cooperative Rosters:  In the State of Washington, also maintains a cooperative roster with participation by a variety of public agencies.  There are also some rosters that are cooperative efforts between a couple of public agencies located near one another.
    Mike Purdy's Public Contracting Blog 
    © 2011 by Michael E. Purdy Associates, LLC