My Training Schedule This Week

Wednesday, May 4:  On Wednesday, I taught 45 professionals from various public agencies on public works contracting issues in Spokane, Washington.  The topics I addressed included the following:

• Bidding and Contract Documents
• Receipt and Opening of Bids
• Bid Responsiveness and Bidder Responsibility
• Insurance, Bonds, and Retainage
• Change Orders
• Public Works Contract Close-out

The class was co-sponsored by WSDOT and the Municipal Research and Services Center.  I will be teaching the same class on May 26, 2011 in Shoreline, Washington, on September 21, 2011 in Ellensburg, Washington, and again on November 16, 2011 in Olympia, Washington.

For more information about the class and to register, visit WSDOT's website by clicking here.  Click on the link for "Purchasing, Bidding, and Contract Management for Local Agencies."

Thursday, May 5:  On Thursday, I gave two training speeches at the annual conference of the Washington Association of School Business Officials (WASBO), in Spokane, Washington.   My two topics were:

• We're Being Audited! - Tips for Managing and Surviving Audits
• What is the Davis-Bacon Act? - Complying with Federal Prevailing Wage Requirements

Each of these sessions was 50 minutes long.  There were about 40 people in the Audit class and 30 in the Prevailing Wage class.  The attendees asked great questions.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Major Garbage Incinerator Project Causes Stir in Palm Beach County

A contentious new $600 million garbage incinerator contract was recently awarded to the low bidder by the Palm Beach County Solid Waste Authority. The project has been the subject of controversy between the three companies that submitted bids as well as with local unions. The objections revolve around a number of issues:

Cost vs. Technical Considerations: The proposals were first rated on technical grounds, with all three scoring relatively close to each other. However, when bids were opened, the lowest-ranking proposal on technical grounds - from Babcock & Wilcox (B&W) - turned out to be the low bid.

Bid Problems: The second lowest bidder, Wheelabrator Technologies, submitted an unsuccessful protest urging the disqualification of B&W for an inadequate performance bond and for changing their team after their Statement of Qualifications was evaluated.

Local Labor: Perhaps the most divisive issue has been use of local workers for the project. Local unions have voiced heated opposition to the winning proposal from B&W, which reserved just 20% of skilled jobs for local workers compared to 40% in the proposal by high bidder Covanta Energy (Wheelabrator also promised around 20%). Unions expressed frustration over past disagreements with B&W subcontractor BE&K and the low number of slots promised for local workers, while B&W stressed that the 20% figure was a guaranteed minimum that they would try to exceed. According to BE&K vice president Lance Hendrix, quoted by WPTV, "We always want to hire as many local workers as possible."

In the end (after a marathon nine-hour public meeting), the Palm Beach County Commissioners awarded the county's largest-ever public works contract to B&W by a 4-3 vote.

More information:

• Palm Beach Post article on the contract award
• Sun Sentinel coverage of the issue before the contract was awarded
• Brief WPBF article summarizing the project, including a video covering the meeting and associated protests

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Training: Supply Chain Management

When: Friday, May 27, 2011 (8:30 a.m. to 4:30 p.m.)

Where: Lacey, Washington (Department of Ecology, 300 Desmond Drive SE)

Instructor: Steven M. Demel, CPPO, Tacoma School District Purchasing Manager

Description: This course provides purchasing and supply professionals with the essential supply chain management knowledge and tools necessary for optimizing customer support.

Expected Outcomes for Attendees:

• Learn Supply Chain Management basics
• Identify your role in the supply chain
• Learn how to create your own business cases for supporting key supply and purchasing decisions, including justification for or against having a supply warehouse
• Understand the roles of Purchasing in a successful supply fulfillment program
• Recognize the benefits of Supply Chain Management best practices

Sponsored by: Washington State chapter of the National Institute of Governmental Purchasing

Cost:

• $150 - NIGP National or Chapter Member
• $180 - non-member

Information and Registration: Click here

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Public Works Selection Processes and Requirements

The State of Washington has a number of different selection (or project delivery) processes that may be used for public works projects.  Despite the different processes, certain requirements apply to all public works projects.

Public Works Selection Processes:  In Washington State, the following are the basic options for selecting a contractor for a public works project:

• Advertise the Project:  Publicly advertise the project and award to the responsible bidder submitting the low responsive bid.

• Small Works Roster:  Solicit bids or quotations from contractors on the agency's Small Works Roster and award to the responsible bidder submitting the low responsive bid, consistent with RCW 39.04.155.

• Limited Public Works:  Use the Limited Public Works process for projects less than $35,000 (part of the Small Works Roster), and award to the responsible bidder submitting the low responsive bid.

• Direct Selection if Less than the Bid Limit:  Select a contractor without competition (or consistent with the agency's policies) if the dollar amount of the project is less than the threshold for competition for that type of public agency (often referred to informally as the "bid limit").  Different types of public agencies (cities, counties, port districts, school districts, fire protection districts, etc.) often have separate state laws that apply to their procurement of public works, services, and goods and supplies. 

• Job Order Contracting:  This alternative public works process provides for the selection of a job order contractor to perform certain public works for less than $300,000 based on a unit price book.  The contractor is selected based on qualifications and their markup (coefficient) of the unit prices.  Under this process, outlined in RCW 39.10, 90% of the work must be subcontracted.  Not all public agencies are authorized to use this process.

• General Contractor/Construction Manager (GC/CM):  This alternative public works process is also outlined in RCW 39.10 and provides for early selection of the contractor based on a combination of qualifications and limited pricing.  Generally used for projects of $10 million or more and requires approval of the State's Project Review Committee for a public agency to use this process.

• Design-Build:  Another alternative public works process outlined in RCW 39.10 in which the public agency contracts with one firm to provide both the design and construction of the project.  Limited to projects of $10 million or more and requires approval by the State's Project Review Committee for a public agency to use this process. 

Required for All Public Works Projects:  

• Mandatory Bidder Responsibility Criteria:  Regardless of the selection or project delivery process used, all public agencies in Washington must ensure, prior to award, that the successful contractor meets the mandatory bidder responsibility criteria outlined in RCW 39.04.350.

• Resident Bid Preference Requirements:  Under the recently adopted legislation (2SSB 5662), once the State Department of General Administration (GA) surveys the practices of other states and adopts regulations implementing the legislation, public agencies in Washington will be required to provide a bid preference to resident contractors over out-of-state contractors.  Because it appears the legislation was written primarily with traditional public works projects in mind, GA will need to address in their regulations how the bid preference will be applied, if at all, to the three alternative public works contracting procedures outlined above. The legislation, which has not yet been signed by the Governor, states the following:

• "In any bidding process for public works in which a bid is received from a nonresident contractor from a state that provides a percentage bidding preference, a comparable percentage disadvantage must be applied to the bid of that nonresident contractor."

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Job Opening: Procurement & Supply Specialist

Evergreen State College (Washington)

• Position: Procurement & Supply Specialist 2

• Location: Olympia, Washington 

• Job Summary: Under the direction and minimal supervision of the Purchasing & Contracts Manager, use independent judgment to plan, coordinate, and perform procurement of services, supplies, materials, parts and equipment for the college in accordance with state laws and College purchasing regulations. In conformance with College and State purchasing regulations, prepare, evaluate and award complex quotes, bids and requests for proposal for goods and services requested by campus community.  Answer questions from entry level purchasing staff and mentor where needed. Screen all contracts submitted for execution to assure proper content and compliance to state regulations. 

• Salary: $2,994 to $3,918 per month 

• Closing Date: Thursday, May 12, 2011

• For More Information and To Apply: Click here

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Cost Estimating and Contract Pricing - Training

When: Wednesday, May 18, 2011 (8:00 a.m. to 5:00 p.m.)

Where: Tumwater, Washington (Edna Lucille Goodrich Building, 7345 Linderson Avenue, S.W.)

Instructor: Pamela Solis, CPCM, CCCM, CFCM, Contract Manager at Northrop Grumman Corporation in San Jose, CA

Description: What should a product, service, or integrated business solution cost? How much is it worth to the buyer? What is the appropriate rate of return or profitability for a product or service? What constitutes a fair and reasonable price? How can buyers ensure they are not paying too much? How can sellers maximize sales, revenue, and profitability in a consistent manner? The answers to these questions range from simple to complex and are the focus of this seminar.

Sponsored by: National Contract Management Association

Cost:

• Members: $265
• Non-members: $315

Pre-registration deadline: Tuesday, May 10, 2011

Information and registration form (Word Document)

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Miami Considers Boosting Local Preference Law

The City of Miami may give even greater priority to local companies bidding on city projects if legislation currently on the drawing board ends up becoming law.

Existing Local Preference: Miami procurement law gives a "second chance" advantage to local bidders: if the low bid is from an out of city bidder, businesses with a "local office" are given the opportunity to match the low bid price, provided their original bid did not exceed it by more than 10%.

Proposed Change: Some city commissioners have suggested increasing the window of opportunity for local companies to match a low bid to 15%.

Concerns Voiced: While the system sounds like an all-around win for the city (local vendors get a leg up and the city still pays the lowest price), some are concerned that over time the policy may discourage competition, causing prices to creep up. "If I were a bidder outside the jurisdiction, I would be discouraged from bidding," said former Miami-Dade County manager Merrett Stierheim about the proposed increase, which he called "excessive" (as quoted in Miami Today).

More Resources:

• Text of Miami Ordinance 11087, which establishes the local preference provision
• Coverage of the proposed Miami law from Miami Today
  
• In-State Bidding Preferences on the Rise, a past blog post of mine on the increasing use of state-level local preference, and some of the issues surrounding it
• In-State Bidding Preference Bill Passes Washington State Senate, a recent post of mine on Washington's local preference law, which was enacted into law last month

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com