Monday, January 16, 2012

Public Works Legislation Introduced in Washington State

The Washington State Legislature, which convened on January 9, 2012, is considering the following legislation related to public works:

Evaluation Criteria for Design-Build and GC/CM:  HB 2327 would add to the list of required evaluation criteria to be considered in selecting a contractor for a Design-Build or GC/CM project.  The added criterion relates to the firm's outreach plan to small, economically and socially disadvantaged, and Washington state certified minority and women business enterprises, and the firm's past performance in the utilization of small, economically and disadvantaged businesses.

Use of Design-Build:  HB 2327 would also clarify the use of Design-Build projects.  It would permit Design-Build to be used for the erection of portable facilities as defined in WAC 392-343-018, and would restrict the use of Design-Build modular buildings to "not more than five prefabricated modular buildings per installation site."

Changes to Job Order Contracting:  HB 2328 would do the following:
  1. Authorized Agencies:  Permit additional agencies to use Job Order Contracting (regional universities, The Evergreen State College, and Sound Transit as a regional transit authority).  In a separate bill relating to Job Order Contracting, HB 2369 would add all regional transit authorities to the list of agencies authorized to use Job Order Contracting.
  2. Yearly Dollar Threshold:  Raise from $4 million per year to $6 million per year the total dollar amount of work orders an agency could execute under Job Order Contracting.
  3. Contract Term:  Clarify that work orders executed within the contract term can be completed after the end of the contract term.
  4. Subcontracted Percentage:  Change the amount of work to be subcontracted from 90% of the actual work in a Job Order Contract to 60% of the Job Order Contract total.
  5. Work Order Threshold:  Increase the maximum amount of each work order from $300,000 to $350,000.
  6. Reporting Year:  Standardize reporting to be based on a July 1st to June 30th year, rather than a contract year basis in order to make aggregation of statewide reports easier.
Streamlining Small Public Works Projects:  HB 1970, which was introduced in the 2011 legislative session but did not receive a hearing then, would:
  1. Waive Bonding and Retainage:  Permit public agencies to waive bonding and retainage on public works projects of $5,000 or less.  Agencies would pick up liability for any claims filed on these projects. The Small Works Roster process would not need to be followed to qualify for these waivers.  
  2. Increase Threshold on Prevailing Wage Forms:  Increase from $2,500 to $5,000 the amount at which an agency could accept Statements of Intent to Pay Prevailing Wages without certification by the Department of Labor and Industries.
No Retainage on Federally Funded Transit Projects:  SB 6063 would fix legislation adopted in 2011 that responded to U.S. Department of Transportation regulations.  The response of WSDOT to the federal prompt pay regulations was to propose amendments to RCW 60.28.011 mandating that on federally funded highway, road, or street projects, no retainage could be withheld, but that the parties protected by retainage would instead rely on the protection of the payment bond.  SB 6063 corrects an oversight of the 2011 legislation by adding federally funded transit facilities to the list of projects for which no retainage would be withheld.  See my July 21, 2011 and July 25, 2011 blog entires on the 2011 legislation for additional background information.

Small Works Roster and Small Businesses: SHB 1173, which was introduced in the 2011 legislative session, in addition to some minor stylistic changes, relates to the use of small businesses on Small Works Roster projects.  It is a confusing and poorly written piece of legislation, and appears to have a negative impact on small businesses.
  1. Threshold Increase for Small Businesses:  Under the current law, for a limited public works project (less than $35,000), a public agency may solicit bids from small businesses with gross revenues less than $1 million.  Under SHB 1173, this threshold increases to $7 million by tying in the definition of small business to that found in RCW 39.29.006
  2. Unnecessary Micro and Mini Business Definitions:  The bill also includes new definitions for microbusinesses and minibusinesses, but the only way these definitions are used is giving agencies the authority to adopt "additional procedures to encourage" their use on limited public works projects, something that a law is not necessary for. 
  3. In-State Business Definition Conflicts with Existing Law:  The bill also includes a definition, from RCW 39.29.006, of "in-state business" meaning one that "has its principal office located in Washington," a potential conflict with the 2011 adopted bidder preference legislation in RCW 39.04.380 that defines "nonresident contractor" as one without a "physical office located in Washington." 
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

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