Issues to Consider in Electronic Bidding Solutions

More and more public agencies are exploring or actually receiving bids electronically, and there are a host of software solutions to manage receipt of bids electronically.  The following is a checklist of some of the issues to consider when evaluating electronic bidding solutions: 

Legal authority:  Do your state or local laws permit electronic bidding?  Some laws permit it for goods, services, and construction, while others prohibit it altogether or restrict it to certain procurements. 

Bid guaranty:  If you require a bid guaranty (bid bond, cashier's check, certified check) as part of the bid submittal, how does the electronic bidding solution address bid guaranties?  Is this solution consistent with your state and/or local laws? 

Signature:  How do bidders "sign" the bid and agree with all of the provisions of the bid documents? 

Conditioned bids:  Make sure the software system does not allow bidders to qualify or condition their bid. 

Bid form:  How easy is it for a public agency to set up a bid form on the software, especially for complex bid forms with schedules, unit prices, additives, alternates, allowances, and sales tax (if applicable)? 

Integrity:  What security tools does the system software provider use to prevent manipulation of bid prices by a hacker, bidder, or the public agency? 

Disclosure:  What security features does the software have to ensure that bid amounts are secure and not subject to disclosure prior to the bid submission deadline? 

Tested by time:  How long has the system been in use, and what is its track record on security issues?  Check references of other agencies who have used the system before deciding to sign up for it. 

Transparency:  How are bids "opened"?  Does this occur in a public setting?  How does the system promote transparency of the bid process? 

Cost:  Who pays for the use of the system?  The bidder (all bidders or just the low bidder) or the public agency?  Regardless of who pays directly, ultimately the public agency will pay for the service, even if it means that the bidder simply includes the cost of using the system in their bid price. 

Small contractors:  Are small contractors technologically savvy enough to use the system?  Will electronic bidding reduce the number of bidders and have a corresponding increase in bid prices? 

Non-local contractors:  Will more non-local contractors submit bids?  How does this impact a local agency's policy to encourage or provide bid preferences to local firms?  

Small public agencies:  Do small public agencies have the technological expertise to use electronic bidding?

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Job Opening: Procurement Systems Analyst

Sound Transit

• Position: Procurement Systems Analyst

• Location:  Seattle, Washington

• Closing Date:  July 28, 2014 at 5:00 pm, Pacific Time

• Salary: $48,884 to $61,105 Annually

• Job Summary:  Under general direction, this position provides system support to ensure optimal performance; partners with internal and external customers to effectively accomplish business tasks; identify improvement areas; troubleshoots and documents system issues; assists in developing and reviewing reports; develops solutions within procurement applications and processes; assists in overall upkeep and training of the procurement systems; participates in coordinating assigned programs, projects, and services with other agency departments.  Experience working with financial applications such as JD Edwards EnterpriseOne, PeopleSoft, SAP, and similar applications.

• For More Information and to Apply:  Click here.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Washington State Plans to Audit On-Call Public Works Contracts

The Washington State Auditor's Office has announced that one of the areas they intend to focus on when they audit public agencies relates to On-Call Public Works contracts.  

Controversial topic:  This has been a controversial topic given that the Auditor's Office statements on the subject have not recognized the critical operational importance for many agencies to use On-Call Public Works contracts in order to provide basic services.  In addition, the Auditor's Office has not been forthcoming with specifics of what their concerns are and what they will be looking for in their audits.

Previous Auditor position: Almost two years ago, the Auditor's office issued a statement expressing their concerns about On-Call Public Works contracts.  Click here to read my earlier blog post when their initial statement came out.

Heads-up on audit topics:  In their newly issued edition of The Audit Connection, dated Summer 2014, the Auditor's Office wrote the following introductory statement providing a "heads-up" to agencies about their upcoming focus on audits:

"Local governments have asked the State Auditor’s Office to let them know in advance the areas they can expect auditors to emphasize in upcoming audits. To help them be proactive in preparing for their audits, we have provided this list of areas for focused assessment during the next series of county and city audits. The level of focus on the areas may vary, depending on the applicability and significance to the county or city."

Which agencies will be audited? Based on the Auditor's statement above, it appears they may only be focusing on cities and counties with respect to On-Call Public Works contracts.  However, it is unclear whether their audit activities relating to On-Call Public Works contracts will extend to other types of agencies such as port districts, school districts, water-sewer districts, public utility districts, etc.

What will be audited?  Using very similar language to their statement from almost two years ago, the Auditor's Office included the following paragraph in their Summer 2014 edition of The Audit Connection, identifying "Using on-call contracts for public works" as one of a number of topics they plan to focus on for upcoming audits:

"On-call contracts are not specifically authorized in state law. These contracts can result in noncompliance with statutes concerning public works contracting and prevailing wages. Auditors will be evaluating county and city use of these contracts to determine if there are established policies, procedures and internal controls to ensure their contracting process is in compliance with public works contracting statutes (Chapters 39.04, 39.06, 39.08, and 60.28 RCW) as well as prevailing wage statutes (Chapter 39.12 RCW)." 

Lack of clarity:  It is not clear from the Auditor's Office statement whether they intend to issue audit findings for all agencies using On-Call Public Works contracts, or if they will be looking to see whether agencies have established policies, procedures, and internal controls to ensure compliance with various laws.  The Auditor's Office has not been clear in any of their statements specifically what their areas of concern are with respect to On-Call Public Works contracts, other than their broad statement of "public works contracting statues" and "prevailing wage statues."

Moving forward:  Public agencies should carefully evaluate their practices and policies regarding On-Call Public Works contracts, and should consult with their attorneys in evaluating the risks to their agencies.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Annual Design-Build Conference & Expo

Annual Design-Build Conference & Expo:  More public agencies across the country are beginning to use Design-Build as a project delivery method instead of the traditional Design-Bid-Build (or low bid).  Another model that is growing in popularity with public agencies is the use of Construction Manager at Risk.  Laws differ by state as to what forms of alternative delivery are permitted. 

When:  October 6-8, 2014 

Where:  Dallas, Texas 

Sponsored by: Design-Build Institute of America 

Information and registration:  Click here.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Training in September: Washington Construction Law

21st Annual Washington Construction Law Seminar:  I've attended this seminar in previous years and always found it to be very helpful.  I will be attending again this year.

When:  September 18-19, 2014 (9:00 a.m. to 5:00 p.m.) 

Where:  

• Seattle, Washington (City University, 521 Wall Street)
• Or participate by a Live Webcast from your office

Agenda and Speakers:

• Federal Construction Law - New Developments (Bruce P. Babbitt)

• Washington State Public Works Competitive Bidding and Bid Protests (Arnold R. Hedeen)

• Key Clauses of Construction Contracts (Alan Bornstein)

• Integrated Project Delivery (Scott R. Sleight)

• Key State Tax Considerations for Construction Projects (George C. Mastrodonato)

• Building Information Modeling (BIM) (Brendan J. Peters)

• Construction Changes/Differing Site Conditions (John P. Ahlers)

• What Happens When Someone in the Chain Goes Bankrupt? (Jerry N. Stehlik)

• Discovery Issues in Construction Claims (Andrew L. Greene)

• Washington Construction Law - New Developments (Paul R. Cressman, Jr.)

• Claims Against Design Professionals (Stanton P. Beck)

• Design Professional Considerations (Blaine J. Weber)

• Ethical Considerations for Construction Lawyers (John A. Strait)

• Insurance in the Construction Industry (Todd C. Hayes)

• Lien and Bond Claims; Dealing with Sureties (Kerry C. Lawrence)

• Construction Mediation (Henry C. Jameson)

Cost: 

• $645 - Government employees
• Other fees for different categories  
• The sponsor of this training, The Seminar Group, will provide my blog readers with a $50 per person discount off of the regular tuition rate.  Call The Seminar Group to register and mention Mike Purdy and the discount code "SPP50." 

Credits:  Approved for continuing education credits with:

• Continuing Legal Education (CLE) credits for Washington, Oregon, Idaho, California, Alaska
• Construction Risk & Insurance Specialists by IRMI
• AIA (American Institute of Architects)
• American Institute of Constructors
• Construction Management Association of America

Sponsored by:  The Seminar Group

Information and registration:  Click here.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Job Opening: Goods & Services Procurement Supervisor

King County, Washington

• Position: Goods & Services Procurement Supervisor

• Location:  Seattle, Washington

• Closing Date:  July 16, 2014 at 4:30 pm, Pacific Time (Interviews will be held the week of July 28)

• Salary:  $86,923 - $110,177 Annually

• Job Summary:  This position supervises staff in the procurement of a wide variety of goods, services, and equipment.  Incumbents are responsible for specialized buying functions and projects which require extensive knowledge of public procurement theory and practice.

• For More Information and to Apply:  Click here.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Protect Your Physical Assets

Public agencies spend a lot of money developing or improving facilities, whether it is a building, utility system, wastewater treatment plant, airport, jail, or any number of different types of public improvements. 

Plan for security:  Part of the planning process for any public works construction project should be to plan for the security of the completed project in order to protect the physical asset from:

• Malicious vandalism
• Terrorism

Conduct risk assessment:  For each facility, agencies should conduct a risk assessment to determine the:

• Likelihood of some form of attack
• Impacts of the facility not being continually operational
• Costs associated with implementing appropriate protective measures (security cameras, fencing, etc.). 

Accessibility of drawings:  Another related issue stems from whether drawings for a project being bid should always be made public online.  The trend in public procurement is for all bid documents to be available through either the agency or third party websites.  However, there are risks associated with making plans for some projects so readily available publicly through the Internet.  Click here to read my earlier blog on this issue.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com