Tuesday, December 17, 2013

Job Opening: Contract Compliance Specialist

While I'm taking a break from this blog during the holidays, the job announcement below came out and I wanted to make sure people were aware of it, given the deadline for applying.  

Reminder drawing for free book:  This is also a reminder about the drawing for a free copy of the book, The Hidden White House, that I blogged about on December 9, 2013.  To be eligible for the drawing (3 copies), you need to sign up for an email subscription to my Presidential History Blog by January 1, 2014:  http://PurdysPresidentialHistory.blogspot.com.

Job Opening:  Pierce County, Washington
  • Position:  Contract Compliance Specialist
  • Location:  Tacoma, Washington
  • Closing Date:  December 27, 2013 at 4:30 p.m.
  • Salary:  $26.16 to $33.09 per hour
  • Job Summary: This position is responsible for monitoring and regulatory compliance for labor standards (prevailing wages) and nondiscrimination policies, reviewing project reports, conducting field reviews, resolving problems and recommending corrective actions and providing technical support for all contractors, subcontractors, vendors, and suppliers who have construction contractual agreements with the County.  Monitor and ensure prevailing wages are being paid, and projects are in compliance with state and federal labor standards.  Review certified payrolls for accuracy of wages. 
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Sunday, December 15, 2013

Merry Christmas to All!

In the next three weeks, many of us will take extra time off from work to spend with family and friends as we celebrate this special season.  It's a good practice for us to step back from the immediacy of the routines that engage our lives, and to savor each moment, each interaction, and the beauty of the creation around us.  

2013 White House Christmas Card
Listen to your life:  Life is short and fragile, and Christmas draws us to live our lives in the moment.  May we remember, not just during these special days ahead, but in the year ahead, to hug our loved ones with a stronger embrace, to verbalize our love and appreciation for family and friends, to slow down and smell the flowers, to breath deeply of the fresh air, to look for the things in our lives for which we are thankful (even the little things), and to see our daily challenges from a longer term and eternal perspective.  

3 week break from the blog:  I will be taking a break from writing this blog for the next three weeks, and will be back in early January.  To the many readers of this blog, thank you for your words of encouragement about how the blog has helped you do a better job in public procurement and contracting throughout the year.  I'm glad to try to provide helpful information that will stimulate conversation and result in improved practices.

Reminder on free book drawing on January 1:  In my blog of December 9, 2013, I wrote a review of a new book that tells the story of the major reconstruction of the White House in the 1950s during Harry Truman's presidency.  The Hidden White House is a fascinating and fun book to read (and good Christmas present for someone you know who is interested in history and/or construction).  I'll be drawing names from a hat on January 1, 2014 to give away three free copies of the book.  All you have to do is sign up for an email subscription to my Presidential History Blog at http://PurdysPresidentialHistory.blogspot.com, and you'll be entered into the drawing.

Merry Christmas:  Wishing you and your family a very Merry Christmas as you celebrate together.  See you next year!
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Thursday, December 12, 2013

Job Opening: Purchasing Manager (Pierce County, WA)

Pierce County, Washington
  • Position:  Purchasing Manager
  • Location:  Tacoma, Washington
  • Closing Date:  Open until filled.
  • Salary:  $78,806 to $106,433 Annually
  • Job Summary:  This position is responsible for the supervision of the Purchasing, General Services, and Fleet divisions.  The work involves a variety of processes and methods, which require an application of specialized knowledge in making procurement recommendations and decisions.  A significant portion of procurement contracts awarded require considerable administration due to extended performance periods, vendor/engineering modifications, progress payments, etc.  This position serves all levels of County management, vendors, manufacturers, and contractor's representatives and is responsible to exchange information, as well as to resolve procurement problems and issues by influencing, persuading and motivating.
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Job Opening: Purchasing Manager (Richland, WA)

City of Richland, Washington
  • Position:  Purchasing Manager
  • Location:  Richland, Washington
  • Closing Date:  Continuous. Open until filled.
  • Salary:  $5,912 to $8,869 per month
  • Job Summary: This position is responsible for planning, organizing, and implementing city-wide purchasing, warehouse, and fleet operations.  Serves as the principal purchasing and contracts officer and is responsible for developing, writing, reviewing and advising on issues related to the City's contracts.  Utilizes efficient and effective processes considered to be best practices in warehouse and fleet operations.
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Wednesday, December 11, 2013

Job Transitions

Anna Vogel
At the end of September 2013, Anna Vogel left her position with the City of Vancouver as Senior Procurement Specialist, and was appointed as the new Procurement Coordinator at C-TRAN, the Clark County transportation agency.

Mayvis Schwab
Mayvis Schwab is retiring on December 31, 2013 as the City of Bellevue's Buyer for Public Works where she has been for ten years.  Prior to that she was in public procurement with the City of Lynnwood for 20 years.  Mayvis spearheaded Bellevue's use of Job Order Contracting (JOC) and convened the statewide Job Order Contracting Users Group to promote the use of JOC in the state.  

Marty Manegold has retired as the City of Lynnwood's Manager of Purchasing and Contracts.

Trisha Roth
Trisha Roth was hired by Sound Transit in August 2013 as Design and Construction Contracts Specialist.  She previously worked for the Orange County Transportation Authority in southern California where she was a Business Unit Analyst / Contract Administrator.

Tina Davis was promoted into a supervisory position at Sound Transit in the Design and Construction section of the Procurement and Contracts department.

Ginny Justiniano
Ginny Justiniano, at Sound Transit, was promoted to Senior Contracts Specialist for goods and services focusing on IT from her position as Design and Construction Contracts Specialist.  Ginny is also Vice-President of the Washington state chapter of NIGP.

Joan Cady's last day as the Purchasing Superintendent for the City of Bellingham will be December 31, 2013.

Ken Matthews
Cheryl Ooka was hired by the City of Shoreline as the Central Services Manager, overseeing procurement and other functions.

Ken Matthews has resigned as the Pierce County Purchasing Agent effective December 20, 2013.

Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Tuesday, December 10, 2013

The Only 2 Things That Should Be Submitted with a Public Construction Bid

For most public works construction projects, there are only two documents that should be required to be submitted at bid opening time.  Depending on the project and specific requirements, there may be a couple of other items that should be submitted as part of a bid.

The 2 definite submissions:  In the interest of limiting the amount of work required of bidders during the last minute of preparing their bids, and to reduce the number of potentially non-responsive bids, the best practice is to limit submissions with the bid to the following two items:

  • Bid Form:  Make sure you provide a clear bid form for use by bidders and do not rely on them to provide prices in their own format, as that can result in bidders not bidding on all of the work.  Bid documents should require that only the authorized bid form be used.
  • Bid Guaranty:  A bid guaranty provides financial assurances of the bidder that they are committed to their bid price, that their bid is not frivolous, and that the bidder, if awarded the contract, will actually sign the contract.  Bid guaranties, often for 5% of the maximum amount that could be awarded, may take the form of a bid bond, cashier's check, or certified check.  Less frequently used bid guaranties are cash and personal money orders (which come with increased risks as to the financial viability and qualifications of the bidder). Some projects may not require a bid guaranty.  For example, in Washington state a bid guaranty is not required by state law for projects bid through the Small Works Roster process of RCW 39.04.155.  Even though it is not required by state law, it may nevertheless be required in the bid documents. 
The 2 possible submissions:  Depending on the project and funding sources, the following items may be required to be submitted with the bid:
  • List of subcontractors:  If state law requires such a list be submitted with the bid, this should be required.  In Washington state, RCW 39.30.060 requires that the bidder submit with the bid (or within one hour of the bid submittal deadline) a list of the subcontractors who will perform the HVAC, plumbing, and electrical work, or to list itself as performing the work of these trades.  This requirement only applies for public works projects that are estimated to cost $1 million or more.
  • Federal forms:  If a project has federal or other funding sources that requires that certain documents be submitted with the bid, these should be required in the bid documents. 
Single signature with the bid:  If the project is not funded in whole or in part with federal funds, the bid form should be structured to include any and all certifications on the bid form so that one signature covers all certifications.  For example, some agencies will require a Non-Collusion Affidavit with the bid.  Instead of requiring bidders to complete and sign this as a separate document, include the language of the affidavit as part of the bid form.  There may be other certifications that can also be included on the bid form, all in the interest of simplifying the bid process and reducing the number of non-responsive bids.

With the bid or after bids are due?  Here's a quick checklist of how to approach what items should be submitted with the bid versus those requested after bid opening of the low bidder:
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Monday, December 9, 2013

A Public Construction Project to Remember - The Reconstruction of the White House During Truman's Presidency

The complete reconstruction of the White House during Harry Truman's presidency was perhaps the most historically significant public construction project of the 20th century.

Project challenges described in new book:  I've just finished reading a newly published book that tells the story of this project, and its challenges including the following:
  • Project design indecision
  • Political feuding about funding
  • Bidder pre-qualification
  • The low bid that was shockingly low
  • Delays in producing drawings for the contractor
  • Change orders
  • Over-budget - requiring additional funding requests to Congress
  • Schedule delays and late completion
  • A key subcontractor with a low bid who was missing-in-action and didn't staff the project adequately
  • Labor strike
  • Waiving competitive bidding for the interior decorator
  • And more... 
In The Hidden White House -  Harry Truman and the Reconstruction of America's Most Famous Residence, Robert Klara has written the definitive, not to be surpassed, work on this sometimes overlooked major saving and reconstruction of the White House. 

A riveting story told well:  Robert Klara is a superb story-teller and historian who brings to life the untold stories surrounding this mid-twentieth century reconstruction of the White House.  Klara's narrative is filled with incredible detail, all supported by meticulous research and facts.  What is incredible is that the details do not get in the way, but instead enhance this rich and riveting story.  Klara's book is a delight to read and I found it hard to put it down.  As one presidential historian noted in her book review, "Klara has taken what is basically a construction plan and has made it read like an adventure story."

I'm giving away 3 free copies of the book:  I thoroughly enjoyed reading every page of this engaging book, and think you will too.  On New Years Day (January 1, 2014), I will draw three names from a list and give away (and send) three free copies of The Hidden White House to a lucky trio.  In addition to writing this Public Contracting Blog, I enjoy presidential history and write a Presidential History Blog (and am researching and writing on a book about presidential history).  To be eligible for the book giveaway drawing, all you need to do is sign up for a free email subscription to my Presidential History Blog at http://PurdysPresidentialHistory.blogspot.com.

Burned in 1814:  During the War of 1812, British forces swept into Washington, DC on August 24, 1814 and torched The President's House shortly after President James Madison left town in haste.  The house was re-built but many of the charred timbers that supported the interior of the building were kept in place in the repaired White House, leaving for a future president to address the less than sturdy structure.

Digging the sub-basement in the
demolished White House in 1950
In danger of collapse in 1948:  What is less well known than the 1814 attack on the White House are the unintentional assaults (renovations) of the mansion that occurred with every president.  "Each new 'improvement' meant more holes to be drilled in the wood, more walls to be moved or knocked down, and more weight heaped upon the house," Klara writes.  The abuses heaped upon The President's House over the decades culminated in the almost complete collapse of the building during Harry Truman's presidency.  

Gut and Rebuild:  From November 21, 1948 when the Truman family fled for a safer habitat, to March 27, 1952 when they returned, the interior of the historic home was completely gutted and rebuilt with a steel structure, leaving only the original outside walls remaining from the day in 1792 when  the cornerstone for the building had been laid.  As John Hersey, a writer for The New Yorker, noted about the new White House, "It was as if someone had decided to set up a modern office inside a deserted castle."

Politics:  Klara tells the story of sagging ceilings, stretching and tinkling chandeliers over social events in the White House, and inspections that revealed a sinking and collapsing mansion.  White House officials chose the moment of a state dinner in 1947 to inform the President that the chandelier chain in the East Room was "stretching."  Truman sarcastically noted later that "It was a nice time to tell me."  Concerns grew about the safety of the President and his family and they were eventually moved out to the Blair House across the street.  But Congress still needed to appropriate money for the expensive reconstruction, leaving some financially conservative members of Congress to consider tearing down the entire mansion and building something cheaper.  Ultimately, the outside walls were saved, but the interior was totally re-built.  Congress appointed a commission to oversee the work, but Truman himself played a decisive role in directing the work.

Process:  Klara takes the reader from the discovery of the failing structure through the decision making process about what to about it, to the actual gutting of the interior and saving of historical items (many of which would be cut up and sold as souvenirs), through the delayed and over budget construction process that included the building of an underground bomb-proof shelter. Along the way is the story of the attempted assassination of President Truman who was temporarily residing in the security-challenged Blair House across the street from the White House.

People:  Klara does a masterful job of painting portraits of the key people involved in the decision and actual implementation of the rebuilding of the White House, from members of Congress, to members of the commission in charge of the renovation, to White House staff to the contractors.  These men, and the Truman family, come alive under Klara's steady hand and insightful heart.  

Selecting a contractor:  To give you a sense of how The Hidden White House is amazingly relevant to public construction contracting issues today, and to give you a taste of Klara's writing style, here's an excerpt (headings are mine) from the book on the contractor selection process for the White House renovation project: 
Scope of Work:  On September 26, 1949, the commission [appointed by Congress to manage the project] released its terms for the White House renovation contract.  The document enumerated a job of dizzying proportions: interior demolition; removal and storage of historic decorative elements; shoring, bracing, and underpinning; excavation, ironwork and concrete; plumbing, electrical, and on it went.  The contractor was to stock all raw materials, furnish all equipment, and supply the skilled labor - and do it all within the confines of an 85-by-165-foot shell of fragile historic sandstone.  Here was a long, complicated, nerve-racking job.  Few construction companies in the nation were fit to even try for it.
Pre-Qualified Bidders Only:  [Public] Buildings commissioner [W.E.] Reynolds made clear that inexperienced or undercapitalized contractors need not apply: "The national and historical importance of this project demands that all materials and workmanship be of the highest grade and that the work be executed by individuals, firms or corporations...[with the] most skillful talents in the field of their work."  As a filter, Reynolds required all interested firms to complete a questionnaire.  Only the contractors that met his definition of having "special qualifications and experience" would be invited to submit a bid, and even they would have to do it in person.  At 1:00 P.M. on October 28, 1949, Reynolds opened the doors of the General Services Administration Building's auditorium, where he waited.
Cost-Plus-Fixed-Fee Contract:  Because of the risks and uncertainties of the White House renovation, the commission invited bids on a cost-plus-fixed-fee basis.  This structure provided that the government would reimburse the contractor for all materials and labor necessary to get the job done (the cost), while establishing a set profit (the fixed fee.)  The arrangement afforded a measure of protection to the contractor on a dicey job by guaranteeing his margin.  Even so, on a job this complex and dangerous, bidding was high-stakes poker.
A VERY Low Bid:  In the end, only fifteen contractors had the nerve to play.  The George A. Fuller Company, builders of New York's Flatiron Building, dropped off a bid for $242,500.  From Chicago, Bates & Rogers came in at $950,000.  Most of the contractors had tossed their hats in around the quarter-million-dollar range, and it looked like of of them would snag the job.  At least, it did until PBA administrator Fay Slater rose at day's end and read the lowest bid aloud to the room.  A "murmur of surprise," as the New York Times termed it, rose from the audience.
Contractor Comfortable With Low Bid:  The winner was John McShain, Inc., of Philadelphia, which agreed to take the job for $100,000.  It was madness.  No firm could make a profit on a fee that low.  But once the reporters finally located John McShain, he was entirely composed.  "I figured nobody would go as low as than," remarked the builder, "so I bid it."
Contract Awarded:  Eight days later, a letter from the Public Buildings Administration arrived at McShain's office at Seventeenth and Spring Garden streets.  "Your proposal dated October 28, 1949, for the renovation and modernization of the Executive Mansion, Washington, D.C., is hereby accepted," it said.  The White House renovation now belonged to him.
About Robert Klara:  Robert Klara is also the author of the critically acclaimed book FDR's Funeral Train, another favorite book of mine.  Klara, who lives in New York City, has been a staff editor for several magazines and his freelance work has appeared in The New York Times, American Heritage, and The Christian Science Monitor, among other publications.

Get your free copy of the book:  Don't forget about the drawing for three free copies of The Hidden White House that I will hold on January 1, 2014.  To be eligible, all you need to do is sign up for a free email subscription to my Presidential History Blog at http://PurdysPresidentialHistory.blogspot.com

Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Sunday, December 8, 2013

Job Opening: Buyer - Public Works

City of Bellevue, Washington
  • Position:  Buyer - Public Works
  • Location:  Bellevue, Washington
  • Closing Date:  December 19, 2013 at 5:00 p.m. Pacific Time
  • Salary:  $4,408 to $6,082 per month
  • Job Summary: This position is responsible for the administration of all public works construction projects including both pre and post-award procurement functions that include specification review, bid planning, advertisement, public bid opening, bid evaluation and determination of the bid responsiveness and bidder responsibility, award, retainage, change order processing and project closeouts.  The position also oversees the City's Job Order Contracting program.
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Wednesday, December 4, 2013

To Reject or Not to Reject All Bids

Most public agencies reserve the right to reject any and all bids in their bid documents.  It's a good practice to have this language.  What are some of the reasons all bids may be rejected, and when is rejection of all bids problematic?

When it's okay to reject all bids:  The following are some of the reasons when it may be appropriate for a public agency to reject all bids and re-advertise the project:

  • Cost: If the bid price of the lowest bidder exceeds the budget available, a public agency is bound to reject all bids.  The project can then be re-advertised, with modifications to the drawings and specifications to reduce scope.  As part of the process of re-advertising, public agencies should have discussions with the bidders to find out what risks or uncertainties they may have seen in the project that caused the bid prices to be so high. Requesting additive bid amounts for certain bodies of work that are desirable but not absolutely necessary for the project can function as a bid protection tool so that all bids do not have to be rejected if the agency only has sufficient funds for the base bid (and maybe some of the additive bid items).
  • Problems with the bid documents:  Sometimes the bidding process or bid documents are flawed and it is clear that bidders made widely differing assumptions about the work.  Or perhaps, there were very few bidders, a potential sign that there may be problems with the design or the requirements of the bid documents.
  • Protest or lawsuit:  Sometimes a bid protest or lawsuit may ensnare a project and the most effective means of maintaining a critical schedule is to reject all bids and re-advertise.  In other words, it may be quicker to reject all bids and re-advertise to get the project back on track than to go through the protest and lawsuit process.  Developing clear bid documents (drawings, specifications, bid form, etc.) is one of the best tools for helping to avoid protests and lawsuits during the bidding process.
Problematic reasons for rejection of all bids:  The following are reasons why all bids should not be rejected:
  • Possible protest or lawsuit:  Just because there are rumors or fears of a protest or lawsuit being filed, it is not generally a good reason to reject all bids and re-advertise.  First, a protest may, in fact, not materialize.  Second, even if a protest is filed, it should generally be dealt with on its merits rather than automatically rejecting all bids.  Consult with your agency's attorney in evaluating the issues associated with a bid protest or lawsuit.  If, however, a protest is filed that will delay the project beyond what the schedule can handle (see above), rejection of all bids may be appropriate.
  • Bids as cost estimating tool:  Some public agencies have used the bidding process as a tool to estimate the cost of a project and to seek funding, and then automatically reject all bids once bids have been received.  Bidders spend a lot of time and money in estimating and bidding a project, and it is inappropriate for public agencies to take advantage of contractors in this manner.  Federally funded projects require that public agencies develop an independent cost estimate before bidding.  In Washington state, public agencies are required to develop an estimate of each public works project before bidding in accordance with the requirements of RCW 39.04.020.
Consequences of rejecting all bids:  There are at least four consequences to rejecting all bids and re-advertising a project:
  • Cost to bidders:  There is a real cost to bidders in estimating and bidding a project, and a re-advertised project may reflect higher prices to compensate bidders for their previous bids.
  • Prices exposed:  Because the bid prices of all bidders are known to all bidders, it may cause some bidders not to bid a re-advertised project.  Another response of bidders may be to re-bid the project, but cut their bid price to beat the previous low bid, even if such a price is either at their cost or with a very small profit margin.  Projects generally work well when the contractor is making a fair profit, but can become challenging projects when the contractor is losing money.
  • Schedule delay:  Rejecting all bids and re-advertising may negatively impact a project's critical schedule dates.
  • Higher costs:  Depending on market conditions, a bid that is re-advertised later may result in higher prices due to increased costs for labor and material.
When to reject all bids:  Rejection of all bids should not be done lightly as there are consequences to doing so.  Nevertheless, there are situations when it may be the most appropriate course of action.

Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Tuesday, December 3, 2013

Why You Shouldn't Ask About a Bidder's Qualifications...with the Bid

Most public agencies awarding a public works construction project are required to award to the bidder with the lowest responsive bid.  This is the traditional model of low bid also known as "Design-Bid-Build." 

Is the bidder responsible?  But the low bidder may not necessarily be a responsible bidder.  See my previous blog on the subject.  To assess whether a bidder is a responsible bidder, the bidder should meet specific, relevant, and objective criteria established in the bid documents.

4 reasons to not ask for qualifications with the bid:  There are four main reasons why public agencies should not request documentation of a bidder's qualifications, or how they meet responsibility criteria, with the bid.  Instead, this information should be requested from the low bidder after bids have been opened.

  • Non-responsive bids:  By asking for bidder qualifications with the bid, there is a risk that a bidder (perhaps the low bidder) may fail to provide some or all of the information required.  If the information must be submitted as part of the bidding process, the lack of submitting this information would render the bid non-responsive.  Non-responsive bids may result in protests, delays, and higher project costs.
  • Burden to bidders:  Asking for bidder qualification documentation with the bid requires all bidders to submit this documentation, which often takes time for bidders to pull together.  The best practice is to request this information only from the low bidder (or if there are schedule concerns from maybe one or two other bidders), which means it would be submitted after the bid submittal deadline.
  • Focusing on bid price:  If you ask for bidder qualification information to be submitted with the bid, this takes away valuable time from bidders to focus on preparing the most competitive bid price.  The process of developing a bid is often a last minute process.  Bidders wait until minutes before the deadline to obtain subcontractor and supplier bids who are delaying the submission of their prices in order to avoid having bidders "shop" their bid prices for a better deal with another subcontractor. 
  • Limited number of bidders:  As bidders evaluate what projects to bid on, they will often make the decision to bid on projects that have fewer bidding requirements.  Bidders have limited time and staffing to prepare bids and requiring too much information to be submitted with the bid may reduce the number of bidders who submit bids (which may result in higher prices).
State laws vary:  Individual states have different laws and requirements about bidder responsibility.  In Washington state, public agencies may develop and use Supplemental Bidder Responsibility Criteria in assessing whether the low bidder is responsible.  RCW 39.04.350 describes the process and the Suggested Guidelines for Bidder Responsibility of the Capital Projects Advisory Review Board (CPARB) provides helpful suggestions and tools regarding bidder responsibility.

Summary:  It is important to obtain qualified contractors on public works construction projects, and this can  be accomplished through evaluating the responsibility or qualifications of the low bidder.  By keeping the bidding process as uncomplicated as possible, public agencies reduce the risk of non-responsive bids, avoid burdening all bidders with requirements, allow bidders to focus on developing competitive prices, and limit the risk of reduced numbers of bidders who opt to bid on less complicated projects.

Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Monday, December 2, 2013

What Constitutes a Public Construction "Project"?

In bidding public construction projects, it is important for government agencies to be strategic in structuring what work is and is not included in a project.

What is a "project"?  Generally, a project can be defined in many different ways, and the appropriate decision will resolve around very specific circumstances of the work. Here are a couple of factors to consider in how to structure a project:
  • Characteristics of a project:  A project generally involves the same type of work, performed at the same time, and at the same location (or the same type of work at multiple locations). 
  • Cost of a project:   Some public agencies, such as second class cities in the State of Washington, have a definition of what costs are included in a public works project.  RCW 35.23.352 states that "the cost of a separate public works project shall be the costs of the materials, equipment, supplies, and labor on that construction project."
  • Combined project:  Combining work that may otherwise be bid separately may result in additional subcontractor markup costs.
  • Separate projects:  Bidding the work as separate projects may result in additional mobilization costs, increased coordination efforts by the agency between multiple contractors, safety issues on site, and accountability of performance issues associated with multiple contractors. 
  • Know the market:  In making the decision whether to combine work or bid work separately, it is important to understand the contractor market in your area.  What contractors perform what type of work?  What is their availability?  Would they be more likely to bid a combined or separate projects?  Talk with some of the contractors and solicit their opinion to help inform your decision.
When splitting a project is not appropriate:  It is not appropriate to break apart a "project" and bid component parts separately if the purpose is to create a small enough project that is valued at less than certain bidding thresholds.  Examples would include the following:
  • Small Works Roster:  In Washington state, RCW 39.04.155 states that "the breaking of any project into units or accomplishing any projects by phases is prohibited if it is done for the purpose of avoiding the maximum dollar amount of a contract that may be let using the small works roster process or limited public works process."   A Small Works Roster may be used to bid projects less than $300,000, and the Limited Public Works process (which is part of the Small Works Roster) may be used to bid projects less than $35,000.
  • Work performed with agency forces:  Some public agencies, such as second class/code cities in Washington have dollar limits, below which they use agency employees to perform public works.  RCW 35.23.352 states the following:  "The restrictions in this subsection do not permit the division of the project into units of work or classes of work to avoid the restriction on work that may be performed by day labor on a work that may be performed by day labor on a single project."

Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Free Webinar on Dispute Resolution Boards

Webinar:  Dispute Resolution Boards and Early Neutral Resolution.  

Description:  The use of a Dispute Resolution Board (DRB) in construction projects has become a proven method to promptly and cost-effectively resolve issues and potential claims, in order to help keep projects on schedule and budget. 

When:  Tuesday, December 10, 2013 (12:00 p.m. to 1:30 p.m. - Pacific Time) 

  • 25 free registrations to public agencies who are members of APWA.  Use the Code "APWA-WA" in response to the question "How Did you Hear of this Program" on the registration form.
  • Otherwise, registration cost is $49
Kerry Lawrence, Deborah Mastin, Doug Holen
Sponsored by:  
Information and Registration:  Click here.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Sunday, November 24, 2013

Best Wishes for a Wonderful Thanksgiving!

Many of us will be taking time off from work this week as we gather with family and friends for a time to remember the many gifts and blessings we have to be thankful for.  Thanksgiving is a good time to pause and reflect.  I will continue with blog postings next week. 

President Cleveland's 1886 Proclamation:  Here's the Thanksgiving Day Proclamation from 1886 from President Grover Cleveland:
Grover Cleveland
Tradition of Thanksgiving:  It has long been the custom of the people of the United States, on a day in each year especially set apart  for that purpose by their Chief Executive, to acknowledge the goodness and mercy of God and to invoke His continued care and protection. In observance of such custom I, Grover Cleveland, President of the United States, do hereby designate and set apart Thursday, the 25th of November, instant, to be observed and kept as a day of thanksgiving and prayer.

Pause, Worship, Give Thanks:  On that day let all our people forego their accustomed employments and assemble in their usual places of worship to give thanks to the Ruler of the Universe for our continued enjoyment of the blessings of a free government, for a renewal of business prosperity throughout our land, for the return which has rewarded the labor of those who till the soil, and for our progress as a people in all that makes a nation great.  

Grateful Hearts and Helping Those Who Suffer:  And while we contemplate the infinite power of God in earthquake, flood, and storm let the grateful hearts of those who have been shielded from harm through His mercy be turned in sympathy and kindness toward those who have suffered through His visitations.

Remembering the Poor and Needy:  Let us also in the midst of our thanksgiving remember the poor and needy with cheerful gifts and alms so that our service may by deeds of charity be made acceptable in the sight of the Lord.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Wednesday, November 20, 2013

How to Invite (or Avoid) an Audit Finding

It's really very simple.  If you receive any federal funding for any project (construction, consulting, services, goods and supplies), it comes with strings. 

Debarment and suspension:  One of the most common audit findings issued by the Washington State Auditor's Office is against public agencies who fail to check and document that companies they have contracted with are not on the federal government's debarment and suspension list.  

Recent audit findings:  Here's a list of just some of the recent audit findings issued for failure to ensure compliance with the federal debarment and suspension requirements:
What's the requirement?  According to the State Auditor's Office, "Federal grant regulations prohibit recipients from contracting with or making subawards to parties suspended or debarred from doing business with the federal government.  For vendor contracts of $25,000 or more and all subawards, the [agency] must ensure the vendor or subrecipient is not suspended or debarred." 

Practical tips:
  • Check grant terms and comply:  If you receive federal funding, designate an individual responsible for compliance with the grant term, one of which, of course, is to check the federal debarment and suspension status of firms.
  • Document compliance:  Document by printing out from the federal website (www.SAM.gov) that the firms are not debarred or suspended by the federal government.  Click here for a previous blog posting about how to document compliance.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Tuesday, November 19, 2013

Do Your Contracts Address Subcontractor Responsibility Criteria and Verification?

Whether you are a public agency, contractor, or subcontractor doing public works construction in the State of Washington, you should review your contracts to ensure they address the subcontractor responsibility requirements of RCW 39.06.020.  Here's what that law states:
A public works contractor must verify responsibility criteria for each first tier subcontractor, and a subcontractor of any tier that hires other subcontractors must verify responsibility criteria for each of its subcontractors. Verification shall include that each subcontractor, at the time of subcontract execution, meets the responsibility criteria listed in RCW 39.04.350(1) and possesses an electrical contractor license, if required by chapter 19.28 RCW, or an elevator contractor license, if required by chapter 70.87 RCW. This verification requirement, as well as the responsibility criteria, must be included in every public works contract and subcontract of every tier. (emphasis added)
Action steps:  
  • Public agencies:  Do your contracts address subcontractor responsibility criteria and the verification process?
  • Contractors and subcontractors:  Do your contracts address subcontractor responsibility criteria and the verification process?
  • CPARB language:  The Capital Projects Advisory Review Board (CPARB) has adopted Suggested Guidelines for Bidder Responsibility that includes suggested language on this issue for public works contracts for agencies and contractors.  Click here for CPARB's website where you can view the Guidelines.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Monday, November 18, 2013

New Internet Domain Name Extension for Construction Industry

Effective March 17, 2014, contractors, designers, and others in the construction industry will be able to use the newly created website domain extension of dot "build" that will join the list of commonly used extensions such as com, net, and org.  GoDaddy.com, a registrar of domain names has opened up a pre-registration process for obtaining the dot "build" extensions.

Competition for new domain names:  There is likely to be intense competition for this new digital real estate as companies in the construction industry brand their business with a domain name that corresponds more to the name of the business.  Increasingly, it is becoming more and more challenging to buy dot com domain names that fit the business and are easy to remember.  The opening of dot "build" and other specialty domain names will expand the landscape of available and relevant domain names.

More information:  For more information about dot "build" as an extension, click on one of the links below:

Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Sunday, November 17, 2013

Job Openings: 2 Buyer Positions

King County, Washington
  • Position:  Buyer (2 positions)
  • Location:  Seattle, Washington
  • Closing Date:  November 28, 2013 at 4:30 p.m. Pacific Time
  • Salary:  $28.80 to $36.50 hourly
  • Job Summary: These buyer positions will be on the Goods and Services team and will be responsible for sourcing contracts for the use of our agencies with solicitations and cooperative procurements while ensuring great pricing and terms.  One of the buyer positions may be assigned to the P-Card team and may be responsible for supporting our P-Card customers, increasing contract usage, conducting spend analysis, and assisting with training and auditing.  Both positions will interact closely with agency staff throughout King County, and work with vendors and contractors to ensure that the county business is conducted openly, inclusively, and provides the best value.
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 

Wednesday, November 13, 2013

Why Bidders Are Never Non-Responsive

Why are bidders never non-responsive?  It's somewhat of a trick question, but it illustrates an important point. 

Responsiveness vs. Responsibility:  Responsiveness in public bidding always relates to a bid, while responsibility relates to a bidder.  To be responsive, a bid must be in compliance with the requirements of the bid documents.  To be responsible, a bidder must be capable and qualified to perform the work.  In other words, a bidder is never responsive or non-responsive.  It's their bid that is either responsive or non-responsive. 

Responsiveness questions:  Here are some of the common questions that should be asked about whether a bid is responsive and in compliance with all of the requirements of the bid documents, or whether a bid is non-responsive:
  • Bid submission location:  Was the bid submitted at the correct location identified in the bid documents?
  • Timeliness of bid submission:  Was the bid submitted prior to the deadline established in the bid documents?
  • Signed bid form:  Was the bid form signed?
  • Bid guaranty:  Was a bid guaranty or bid deposit (bid bond, cashier's check, certified check, cash) in the appropriate amount submitted with the bid?
  • Bid prices:  Does the bid include a bid price for all items identified on the bid form?
  • Bid form blanks:  Were all blanks on the bid form filled out completely?
  • Addenda:  Were all addenda acknowledged on the bid form?
  • Bid exclusions:  Did the bid include any exclusions or conditions different from the requirements of the bid documents?
Material vs. Immaterial Irregularities:  Should all bids with irregularities automatically be rejected as non-responsive?  Not necessarily.  There's a difference in the type of bid irregularities.  Some are material and others are immaterial.  In other words, a material irregularity in a bid is one that is significant and gives a competitive advantage or benefit to one bidder not enjoyed by other bidders.  Material irregularities in a bid should result in the bid being rejected as non-responsive and not considered further.  On the other hand, an immaterial irregularity in a bid does not give one bidder a competitive advantage or benefit not enjoyed by other bidders.  A bid with an immaterial irregularity may be accepted as responsive, or at the discretion of the public agency, may be rejected as non-responsive.

Is the bidder responsible?  While responsiveness relates to whether the bid complied with the requirements of the bid documents, responsibility assesses whether the bidder is capable and qualified to perform the work.  

Different laws on responsibility:  Laws differ regarding the amount of discretion a public agency may have in determining that the bidder with a low responsive bid is or is not a responsible bidder.  There is a spectrum of authority for public agencies in establishing bidder responsibility:
  • Significant discretion:  Some public agencies have broad discretion and judgment in making the determination of responsibility
  • Limited discretion:  Some public agencies permit a bidder responsibility analysis within certain bounds.  For example, in the State of Washington, all bidders on public construction projects must meet a half-dozen mandatory bidder responsibility criteria before being awarded a project.  In addition, agencies in Washington are permitted to establish additional relevant bidder responsibility criteria on a project-by-project basis to be used in making a responsibility analysis.  RCW 39.04.350 governs bidder responsibility in the State of Washington. 

  • Almost no discretion:  Some public agencies must almost always award to the bidder with the low responsive bid, regardless of capability or past performance concerns. 
Check your language:  I often see language in bid documents that notes the intent of a public agency to award the project to the "lowest responsive and responsible bidder."  This type of language blurs the important distinction between responsiveness and responsibility.  Instead, bid document language should reflect that the agency will award to the "responsible bidder with the lowest responsive bid," or something similar. 

Case by case:  Evaluating whether a bid is responsive and whether a bidder is responsible are determined on a case by case basis, dependent on the specific facts and the language of the bid documents.  It's important to involve the public agency's attorney in making these determinations, and in assessing how defensible a particular position is to a protest or lawsuit.  

The question:  "Why are bidders never non-responsive?"  Bidders are never non-responsive, even though their bid may be non-responsive.  A bidder, however, may be determined to not be a responsible bidder, making them ineligible to be awarded a project. 
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Tuesday, November 12, 2013

The Problem With Non-Competitive Unit Prices on Bid Forms

Some public agencies request unit prices on bid forms in order to establish these prices up front for potential change order work that may be necessary during construction. 

Unit prices not part of award evaluation:  Often these unit prices are not factored into the evaluation of determining the low bid amount, and are not included as part of the bid award amount.  Public agencies who follow this practice may end up spending more money on change order work.  In other words, if the unit prices are not part of the bid evaluation process and are not awarded, bidders have very little motivation to provide competitive unit prices, since they know that the unit prices they bid will not impact whether they are the low bidder. 

Options for obtaining competitive unit prices:  There are at least four theoretical options available for how to obtain unit prices that are not part of the bid award amount:
  • Unit price not part of evaluation process:  As noted above, an agency may request a unit price for potential change order work on the bid form.  The risk is that this amount may be much higher than the cost of the work or that could be obtained through a competitive process.  This approach is not recommended.
  • Unit price requested, subject to negotiation:  This option is similar to the first option, but the agency adds language to the bid form noting that the agency reserves the right to reject unit prices included on the bid form and to negotiate an appropriate cost when change order work is needed.  This additional language mitigates against the most serious concern of non-competitive unit prices.
  • Unit price with estimated quantities:  In this approach, the basis for evaluating and determining the low bidder would add the base bid to the extended amounts for unit price work (including estimated quantities on the bid form and requiring bidders to submit a unit price and extended amount).  However, the agency would only award the base bid (not the unit price extensions), but this process makes the unit prices competitive.  There are disadvantages to this approach that include possible unbalancing of bids by contractors.
  • Negotiate unit prices for change order work:  Under this option, a public agency would not request any unit prices not part of the award on the bid form.  Instead, when change order work arises during construction, the agency would negotiate the cost of the work with the contractor, in accordance with the provisions of the contract.  Typically, change order work is priced based on lump sum or time and materials (if no unit prices are included on the bid form).
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC

Thursday, November 7, 2013

Job Opening: Purchasing and Contracts Manager

City of Lynnwood
  • Position:  Manager - Purchasing and Contracts
  • Location:  Lynnwood, Washington
  • Closing Date:  November 13, 2013 at 11:59 p.m. Pacific Time
  • Salary:  $85,086 to $107,678 Annually
  • Job Summary:  This position is responsible for planning, organizing and managing centralized purchasing, contract and administrative functions for the City, providing services and oversight for all City departments.  The manager also develops citywide policies and procedures, as well as enforcement tools and controls.  Functions include management of: City bidding, contracting and purchasing; the City surplus program, mailroom, archives and records, copy center and other services.  Work is performed with considerable latitude for independent judgment, actions and decisions.
Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC