Union Sues School District for Backing Out of Project Labor Agreement

The Lorain, Ohio school district has backed out of a Project Labor Agreement (PLA) for the construction of a new $73 million high school.  

State threatens to cut project funding:  The district's action came after Ohio Gov. John Kasich banned PLAs.  Even though the district signed a PLA with the unions, the state, which is funding 81% of the cost of the project, threatened to withdraw their financial support for the project if the PLA remained in effect.

Unions file lawsuit:  On July 11, 2013, the North Central Ohio Building and Construction Council filed a lawsuit against the school district and two state commissions.   

More information:  Click here for more information.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Louisiana Agency Mandates Price Evaluation Points for all RFPs

After many months of discussion and debate, Jefferson Parish, one of the largest counties by population in Louisiana, adopted an ordinance aimed at reforming some of the Parish's questionable contracting practices.  While it is an improvement, the new law is misguided in some aspects and doesn't go far enough in bringing transparency to the Parish's selection practices.

Price worth 20% of points:  The July 24, 2013 action (Ordinance No. 24528) by the Jefferson Parish Council requires that price be part of the evaluation criteria in selecting firms for providing non-professional services, and that "the cost evaluation shall be worth twenty percent (20%) of the total points assigned."  Before adopting the new law, price was not required to be part of the evaluation process.

• Why 20% isn't always appropriate:  While price should always be part of the evaluation criteria for selecting consultants and service providers (other than architects, engineers, and related professionals), mandating that price always be 20% is misguided.  It is an art form to determine, on a case-by-case basis, how to weight the points between qualifications and price.  But Jefferson Parish has turned this art form and important discretionary decision, into a rigid formula that will often yield unintended results. The points to be assigned based on price should be lower when the qualifications and judgment of the consultant are more important and the scope of services are less prescriptive.  On the other hand, when the scope of services are more prescriptive and the qualifications of the consultant or service provider less important, then price should be a higher percentage of the overall points. Click here to read an earlier blog posting of mine on the subject.

Keeping price from influencing qualification scores: In an attempt to ensure that evaluators score proposals fairly based on qualifications without price being a consideration, the new Jefferson Parish law provides that the purchasing department will open sealed pricing proposals after all evaluators have scored the technical and qualifications portion of the RFP.  Purchasing will then assign the points for price based on a formula. The "proposer with the lowest cost shall receive the highest cost evaluation score."  Other proposers will receive proportional scores based on the percentage difference from the lowest price.

Political influence in the selection process:  Unfortunately, Jefferson Parish's new ordinance does not address the need to reform the selection process by removing the Parish Council from the decision making process.  After all evaluation scores have been tabulated, the Council provides unwarranted discretion to the council member in whose district the work will be performed, to select any of the firms who submitted proposals, even if they were not the highest rated firm.  This politicization of the selection process does not promote openness and transparency in public procurement and contracting and may lead to abuses of power.  The Jefferson Parish Council, as the legislative branch of government, performs many of the functions that are typically performed by an executive branch in implementation and administration.

More information:  

• Click here for a July 29, 2013 news article from The Times-Picayune in New Orleans.  I'm quoted in the article.

• Click here to read my blog from December 2, 2013 on "Consultant Selection - New Orleans Style."

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Avoid Changes to Bid Documents After Bids Are Received

Public bidding takes careful planning and thought up front before the bid documents are ever published.   

Basis of bidding:  The bid documents become the basis of bid prices submitted by contractors, and changes after bids have been received undermines the integrity of the competitive bidding process, and may result in bid protests and audit findings.

No changes after bids:  Here are two provisions that should not be changed after bids have been received:

• Bidder responsibility:  Often, public agencies will include in bid documents bidder responsibility criteria that the low bidder must meet.  Waiving these requirements after bid opening and prior to award may result in bid protests.  Including the responsibility criteria in the bid documents may necessarily limit what bidders choose to submit a bid, but then eliminating the requirements after bids have been received is not a fair or transparent process.  

Yakima County (WA) recently waived bidder responsibility criteria for a jail project after bids were received but prior to award, and their action has resulted in a bid protest.  Click here to read more about the bid protest.

• Bonding and insurance:  If bid documents for a public construction project require the successful bidder to provide a payment and performance bond and evidence of insurance prior to execution of the contract, these requirements should then not be waived for the low bidder.  Providing bonds and insurance are part of the cost of a contractor doing business and these costs should be built into a bid price.  By waiving these requirements after bids have been received, a public agency changes the basis of bidding and creates an uneven competitive bidding environment. 

Plan ahead:  Think carefully about your bid documents as you are developing them.

• Reasonable bidder responsibility criteria:  If you've included any bidder responsibility criteria included in the bid documents, are they reasonable?  Are there contractors in the market who can meet the criteria?   

• Bidder responsibility checklist:  Click here to review the Checklist for Developing Supplemental Bidder Responsibility Criteria that I developed to help public agencies in Washington manage the provisions of RCW 39.04.350.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Job Opening: Capital Budget Assistant to the Governor

State of Washington, Office of Financial Management

• Position:  Capital Budget Assistant to the Governor

• Location:  Olympia, Washington

• Closing Date:  Open until filled

• Salary:  $6,068 to $7,129 Monthly
  

• Job Summary: The position will develop capital budget recommendations, ensuring that capital funds are balanced, assist in the development of long-term funding strategies, approve agency spending plans, and monitor project implementation and delivery.  Agency assignments are expected to include the departments of enterprise services, corrections, and most natural resource departments.

• For More Information and to Apply:  Click here.

Mike Purdy's Public Contracting Blog 

© 2013 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

When is the Price Not Right?

Most states and the federal government have adopted what is known as "Qualifications Based Selection" (QBS) for contracting with architects, engineers, and related professions.  Under QBS, a public agency may not use price as one of the evaluation criteria, but must select the most highly qualified firm and then negotiate the price with that firm.

Questionable QBS practices:  Some public agencies have pushed the limits of what is acceptable under QBS.  The following questionable selection strategies are sometimes used by agencies attempting to obtain the price for professional services prior to selection.

• The envelope please:  Under this practice, an agency asks for each firm's proposed price in a sealed envelope which is submitted at the same time as the statement of qualifications.  The agency's Request for Qualifications (RFQ) will typically state that the envelope will not be opened until after a selection based on qualifications has been made.  The firm's proposed price in the sealed envelope then serves as the basis for beginning negotiations for a mutually acceptable contract amount.  Architects and engineers often question this practice and are concerned that an agency may open the envelope early, and such information will be used in making the selection decision.

• Hours only:  Sometimes an RFQ will request that responding firms submit an estimate of the hours or level of effort that will be required for the contract.  However, because the range of typical hourly rates may be common knowledge, an agency can easily calculate which firm has the highest and lowest overall price.  This would appear to violate the intent and requirements of QBS.

• Rates only:  Under this questionable practice, an agency does not request a proposed total fee from responders, but only the fully loaded hourly rates for each employee or class of employees that will work on the project.  No hours are requested under this dubious practice.  Because the intent of QBS is that public agencies will make selection decisions based only on the qualifications of the firms, asking for hourly rates seems to cross the line away from selecting based on qualifications only, and into the price arena.  In other words, architects and engineers will argue that cost factors (as opposed to qualifications only) are, in fact, being used as part of the selection process, violating the intent and requirements of QBS.

• Budget:  Some agencies ask in an RFQ or interview for respondents to comment on and demonstrate how they will meet the agency's specific dollar amount budget.  If the responses focus on the specific dollar amount available, the question may well step over the line of what is acceptable as part of QBS.  On the other hand, it is acceptable to ask respondents how they will control costs or what their record is in meeting budgets.  But providing the agency's specific budget amount and asking how firms will meet that budget begins to look like pre-negotiation and using price as a factor in the selection process.  In other words, one firm may indicate that the budget is not sufficient and may be rated lower, resulting in price being used as part of the selection process instead of just qualifications, as required by QBS.

Checklist for compliance:  

• Federal law:  Review the architectural, engineering, and related professions included in QBS under the federal Brooks Act, which is applicable if your project includes any federal funding.

• State law:  Review any state law requirements regarding QBS.  In Washington state, QBS is governed by RCW 39.80.

• Local practices:  Examine your evaluation criteria and practices to ensure they are consistent with federal and state QBS requirements.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

When Must a City Council Award Contracts?

The Municipal Research and Services Center (MRSC) in Washington state recently responded on their website to the following question:

Must the city council approve the award of a contract for a public works project that costs about $300,000 and for supplies and equipment that will cost over $7500?

MRSC's answer:  Here is the answer that MRSC provided to this question:

As general background, the council is the body within a city that has general authority over the award of all contracts, whether for a public works contract or for a purchase of supplies or equipment. So, the authority to award a bid - which precedes the actual contract - rests with the city council. I would expect the council to follow this approach when awarding large contracts. So the award of a bid on a public works contract that is worth $300,000 or on an expensive purchase should be first approved by the city council.

However, the council may delegate to an administrative officer the authority to enter into contracts below a certain amount without prior council approval (this assumes the contract is within the appropriate budget appropriation). Some cities have, for example, applied such a delegation to purchases costing under $10,000 or to an even higher amount. This should be done expressly in a council resolution, in the city's purchasing policy, or the like, that specifically indicates the monetary limits of that delegation. 

MRSC's website:  MRSC offers a wealth of information for local governments.  Click here to visit their website.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Job Opening: Senior Contracts Specialist

Sound Transit

• Position:  Senior Contracts Specialist

• Location:  Seattle, Washington

• Closing Date:  Thursday, August 1, 2013 at 5:00 p.m., Pacific Time

• Salary:  $59,419 to $74,273 Annually
  

• Job Summary: This position is responsible for the preparation, analysis and negotiation of the procurement of technology, systems, professional services, equipment and other goods and services.  Leads project managers in the selection of procurement methods and strategies.  Prepares, issues, negotiates, and awards contracts in accordance with policies, procedures, and in compliance with all state, federal and local regulations and laws.  Leads departments and project managers in the preparation of solicitations of a complex nature and associated contracts.  Reviews specifications and provides input to project managers.  Responds to questions and issues and provides procurement expertise and assistance related to associated agreements.  Provides guidance on contract administration, performs research and conducts negotiations.

• For More Information and to Apply:  Click here.

Mike Purdy's Public Contracting Blog 

© 2013 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Public Contracting News from Across the Country

Feds seek authority to charge for bid protests:  The federal Government Accountability Office is seeking congressional authority to charge a fee for bidders to file bid protests on federal contracts.  The authority is included in legislation recently considered by a House Appropriations subcommittee.  Click here for more information.  Click here for an article discussing the impact on small businesses of a filing fee.

County to consider more than price in awards:  Madison County, New York is considering legislation that would enable them to consider the cost of maintenance, durability, quality, and product life in addition to cost when making awards.  A hearing is scheduled for August 13, 2013.  Last week, the County's Board of Supervisors also made changes to increase bid limit thresholds by providing department heads with more discretion on awarding contracts without competition.  Click here for more information.

Boat repair done without bidding:  The director of emergency management for Oak Bluffs, Massachusetts ordered $26,100 in repairs to the town's fire and police rescue boat without seeking any competitive bids as required by state law.  Elected officials did not view the repair work as an emergency.  In addition to skirting bidding regulations, the director, who is up for reappointment to another three year term this month, lacked any budget for the repairs.  Click here for more information.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Electronic Glitch in Sending Out Addendum Leads to Bid Protest

A bidder has protested that a computer snafu resulted in them not receiving a critical addendum to an almost half billion dollar tunneling project in Seattle - an addendum that could have positively impacted the contractor's cash flow and enabled them to submit a lower bid price.  

What did the addendum say?  The addendum notified bidders that Sound Transit would not withhold 5% retainage on progress payment in order to comply with regulations on the federally funded project to bore 3.4 miles of twin transit tunnels from the University of Washington to Northgate.  

Bidder didn't receive notification of addendum:  The joint venture of Traylor Frontier-Kemper (TFK), whose bid of $465 million was $25 million more than the low bid of JCM Northlink LLC, was declared non-responsive for failure to acknowledge receipt of the addendum.  TFK argued that Sound Transit's electronic addenda notification system failed, the result of an upgrade to the eBid Systems software just days before bids were due.

Disputed facts:  Whether any employees of TFK actually received the addendum is unclear.  Some records indicating receipt of the addendum may have been inaccurate based on information from eBid Systems noting that some messages sent from the system "were inaccurately displayed as 'sent' in the log."

Relief sought:  TFK appealed last week to Sound Transit CEO Joni Earl, seeking to have the agency reject all bids and readvertise the project. 

Lessons learned:  The computer glitch in notifying bidders of addenda issued is a good reminder that public agencies must have a clear and reliable process for notifying bidders of addenda.  

• Review your procedures to ensure that all potential bidders are notified of changes. 

• If your agency posts changes to your website or to a third-party website, consider placing the responsibility on the bidders to check the website prior to submitting a bid.

• Have a method to verify that addenda notification has been sent to all potential bidders.

• Test and verify that software upgrades are working properly and that all bidders are being notified of addenda.

More information:  Click here to read an article from the Seattle Times about the Sound Transit bid protest.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Job Opening: Lead Senior Buyer

King County, Washington

• Position:  Lead Senior Buyer

• Location:  Seattle, Washington

• Closing Date:  Friday, July 26, 2013 at 4:30 p.m., Pacific Time

• Salary:  $75,940.80 to $96,241.60 Annually
  

• Job Summary: The position will lead procurement staff in establishing and administering contracts for the County's use, which includes: distributing and overseeing workload; resolving contract and procurement issues; providing training to staff and customers; leading business process improvement projects, coaching, mentoring, and leading staff to high levels of professional development, productivity and performance; participating in performance evaluations.

• For More Information and to Apply:  Click here.

Mike Purdy's Public Contracting Blog 

© 2013 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Job Opening: Purchasing Manager

Port of Longview, Washington

• Position:  Purchasing Manager

• Location:  Longview, Washington

• Closing Date:  Friday, July 19, 2013

• Salary:  $50,912 to $63,640 Annually
  

• Job Summary:  The position is responsible for the purchase of goods and services by issuing and managing formal and informal solicitations for a variety of contractual services, including public works projects, purchased services and equipment and materials.  The position provides guidance to various departments in determining the appropriate method of procurement while complying with legislative regulations and internal policies.

• For More Information and to Apply:  Click here.

Mike Purdy's Public Contracting Blog 

© 2013 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Avoiding the Risk of Paying Back Federal Grant Money

Public agencies that fail to comply with the terms of federal grants risk being required to pay grant money back to the federal agency providing the funds.

3 proactive steps:  Here are four important steps public agencies can take to avoid having to pay back grant money:

• Know what's required:  Read the terms of the grant agreement and understand your obligations.

• Designate a point person:  Designate an individual(s) within your agency to be responsible for complying with the terms of each grant.

• Ask the Feds:  Find and develop a knowledgeable contact person with the federal agency who can help interpret what is required.

• Ask other public agencies:  Seek assistance from other public agencies who have received similar grants.

Common pitfall:  One of the most common areas of non-compliance with the terms of federal grants occurs when public agencies fail to check the status of contractors, consultants, and vendors (with contracts of $25,000 or more) to ensure they are not suspended or debarred from participating on federally funded contracts.  Payments made to an ineligible party are not allowable costs and would be subject to recovery by the federal funding agency.

Audit findings:  Four school districts in Washington state were recently hit with audit findings by the State Auditor's Office for failing to check and document the suspension and debarment status of organizations they contracted with using federal funds.  Click on the links below to read the audit findings:

• Elma School District No. 68 (Grays Harbor County)
• Mossyrock School District No. 206 (Lewis County)
• Nine Mile Falls School District No. 325/179 (Spokane County)
• Othello School District No. 147 (Adams County)

How to check for federal debarment:  It's easy to check for whether a business your agency is contracting with has been suspended or debarred from doing business with the federal government.  Go to www.sam.gov, and enter the name of the business.  If the search does not reveal a record, click on the "save PDF" link that will include the name you searched for as well as a note indicating there were no search results.  Print this PDF and maintain it in your contract/project file for when you are audited.

Mike Purdy's Public Contracting Blog
© 2013 by Michael E. Purdy Associates, LLC http://PublicContracting.blogspot.com

Standard Contract Language

Standard Contracts:  There are a variety of standard contracts used for public construction and architectural agreements.  Sometimes a public agency will use their own, specifically tailored set of documents.  Other times they will use a document or set of documents developed by an industry group, whether that is from the perspective of contractors, engineers, or architects.  

Here are some of the organizations with standard documents:

• ConsensusDOCS is a coalition of 40 associations in the design and construction industry that collaboratively develops and promotes standard form construction contract documents.

• EJCDC (Engineers Joint Contract Documents Committee) is a joint venture of the following organizations: American Council of Engineering Companies, American Society of Civil Engineers, National Society of Professional Engineers). 

• American Institute of Architects (AIA) provides standard contract documents used for construction and architectural contracts.

Cautionary note:  Public agencies should be aware that documents developed by industry groups generally have a focus on protecting the constituency that developed the documents, and don't always protect the public agency's interests as strongly as might be desired.

AIA Contracts Training:  The following provides information on upcoming training on the AIA contract documents:

• When:  Wednesday, July 31, 2013 (8:00 a.m. to 4:30 p.m.)

• Where:  Seattle, Washington (Washington State Convention Center)

• Cost:  $359

• Instructors: 
• John P. Ahlers
• Bruce A. Cohen
• Paul R. Cressman, Jr.
• Brett M. Hill
• Scott R. Sleight

• Class Outline: 
• Overview of AIA Documents
• Key Clauses in AIA General Conditions
• Key Clauses in AIA Agreement Between Owner and Contractor
• Analysis of AIA's Design-Build Documents
• AIA Integrated Agreement Forms
• Analysis of AIA Standard Form of Agreement Between Owner and Architect

• Registration:  Click here.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Agency Violates Selection Processes and Conflict of Interest Provisions

Using federal funds, a small fire protection district had one of its elected commissioners draw plans for a building to house fire trucks.  The district also hired a contractor owned by another commissioner to build the building,   In the process, the district skirted both consultant and contractor selection requirements and violated conflict of interest laws.

Audit finding:  Here's the audit finding the Washington State Auditor's Office recently wrote about the practices of the Klickitat County Fire Protection District No. 15:

• Bidding violation:  State Law requires the District to seek formal bids on public works projects of more than $20,000. The District stated they called local construction companies and informed them of the project; however, this did not meet the requirements for a project of this size. 

• Conflict of interest:  State law prohibits a conflict of interest with a municipal officer. The District paid the Commissioner’s company $66,000 during the audit period for this project.

• Consultant competition required:  State law requires that all architectural and engineering services be competitively procured. The District used architectural services from a Commissioner without publicly advertising a request for services.

• Prevailing wage violations:  State law requires contractors to pay prevailing wage on all public works projects.  While we saw evidence of certified payrolls from the contractor, the District did not ensure intents and affidavits were filed with the State Department of Labor and Industries and thus cannot be sure the contractor complied with prevailing wages requirements.

More information:  Click here to read a copy of the audit report.  The District indicated they were not aware of the procurement and conflict of interest laws applicable to the project.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Job Opening: Senior Procurement Analyst

Multnomah County, Oregon

• Position:  Senior Procurement Analyst

• Location:  Portland, Oregon

• Closing Date:  Friday, July 19, 2013 at 11:59 p.m., Pacific Time

• Salary:  $54,517.68 to $67,045.68 Annually
  

• Job Summary: The Senior Procurement Analyst will provide county wide customer support, direction, solicitation review and interpretation of County policies for departments conducting intermediate procurements (generally $150,000 and under), and is responsible for conducting formal County procurements (generally over $150,000), working in close partnership with departmental purchasing and program staff.  This position will consult with department staff and management to identify optimal procurement strategies based on careful analysis of situational needs, data and interpretation of County's purchasing rules, procedures and policies.  Other duties will include participating in the review of all Multnomah County's contracts for goods and services, checking for valid procurement authority as well as compliance with the County's complex purchasing rules, procedures and policies.

• For More Information and to Apply:  Click here.

Mike Purdy's Public Contracting Blog 

© 2013 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com