Sunday, February 28, 2010

Governor Proclaims March as "Purchasing Month"

Washington Governor Christine O. Gregoire has proclaimed March 2010 as "Purchasing Month" in recognition of  the significant role that the purchasing and materials management professions play in the efficiency and effectiveness of both government and business.

The February 8, 2010 Proclamation signed by the Governor also notes that the Washington State Chapter of the National Institute of Governmental Purchasing (NIGP) and other professional purchasing associations will engage in "special efforts to inform the public on the important role the purchasing profession plays in business, industry, and government."

Thursday, February 25, 2010

Speech on "Issues and Trends in Public Project Delivery"

I'll be giving a speech on Friday morning at 8:45 a.m. (February 26, 2010) at the Annual Seminar of the Pacific Northwest Chapter of the Construction Management Association of America (CMAA) on "Issues and Trends in Public Project Delivery."

Here's a high level outline of my speech:
  • Why We Have Competitive Bidding
  • 4 Trends in Public Project Delivery
  • Contracting and Delivery Models:
  1. Design-Bid-Build
  2. General Contractor/Construction Manager (GC/CM)
  3. Job Order Contracting
  4. Public-Private Partnerships
  5. Maintenance Contracts
  6. Best Value
  7. Integrated Project Delivery (IPD)
 The Annual Seminar will be held in Bellevue, Washington at the Mount Si Conference Room at 500 108th Ave NE.

Free Construction Management Certification - Application Workshop

The Pacific Northwest Chapter of the Construction Management Association of America (CMAA) and the Seattle Department of Transportation (SDOT) are sponsoring a free workshop to assist construction management professionals in obtaining a CMAA construction manager certification designation.

The five part workshop will be held on the following dates, all beginning at 6:00 p.m., except for the last optional dinner recognition meeting starting at 5:00 p.m.:
  • March 1, 2010
  • March 15, 2010
  • March 29, 2010
  • April 12, 2010
  • April 22, 2010
For more information, visit CMAA's website. 

To sign up, e-mail Don Laford at Don_Laford@urscorp.com.  Space is limited.

Legislative Hearing on GC/CM Selection of Electrical and Mechanical Subcontractors

Steve Goldblatt, recently retired, longtime University of Washington Construction Management faculty member specializing in design and construction law, has been covering the legislative scene in Olympia for more than 25 years.

In this guest blog post, Steve notes an important bill, endorsed by the Capital Projects Advisory Review Board (CPARB) that will be considered in a hearing on Friday, February 26, 2010.
GC/CM Subcontractor Selection: SB 6401 would authorize an alternative selection method for electrical and mechanical subcontractors on general contractor/construction manager projects (Chapter RCW 39.10). This bill passed out of the Senate two weeks ago, 48-0. Hearing on Friday, February 26, 2010, at 8:00 a.m. in the House Committee on Capital Budget.

Tuesday, February 23, 2010

Holding the Contractor Responsible for All Specification Provisions

Specification writers frequently describe that a particular subcontractor, such as the electrical subcontractor or the subcontractor performing the work of Section XYZ, is responsible for performing certain work.

One of the problems with this language is that it potentially limits the liability of the contractor who is ultimately responsible for performing all the work of the contract, including being responsible for the work of all subcontractors.

There are two ways to address this concern and ensure that the specifications are clear with respect to the accountability of the contractor for all of the work:
  1. Ensure that any references to specific subcontractors as being responsible for work are changed to reflect that the contractor is responsible for the work.
  2. Include a global statement in the contract or General Conditions that states something like the following:  
"Any references included in the contract documents that purport to address the responsibilities of work by crafts and specialty or trade contractors or subcontractors, are included only for the convenience in preparing and reading the contract documents, and do not in any way limit the full responsibility of the contractor to provide a complete installation and be responsible for all of the work under the contract."

Monday, February 22, 2010

Who Should Be the Obligee on a GC/CM Bid Bond?

Under the General Contractor/Construction Manager (GC/CM) model of project delivery in Washington state, the contractor (GC/CM) is required to competitively bid all subcontract bid packages and award to the lowest responsible bidder with a responsive bid (RCW 39.10.380).  

For work more than $300,000, each bidder is required to submit a bid bond.

Who should be the obligee on the bid bond?  In other words, who should the bid bond protect in the event the bidder fails to enter into a contract for the work?  

There are three different types of potential bidders on a GC/CM subcontract bid package:
  1. Subcontractor:  If a subcontractor bids work more than $300,000, the obligee on the bid bond should be the GC/CM, since it is the GC/CM who will award the subcontract, not the owner.
  2. GC/CM:  A GC/CM is permitted to perform no more than 30% of the Maximum Allowable Construction Cost (MACC), provided they submit a bid for a subcontract bid and are the low bidder (RCW 39.10.390).  In such a case, for work more than $300,000, a bid bond is required from the GC/CM and should name the owner as the obligee.  The bidder (GC/CM) and obligee cannot be the same party.  All other subcontract bidders should name the GC/CM as the obligee.
  3. Subsidiary of the GC/CM:  If a subsidiary company of the GC/CM bids subcontract work and is the low bidder, the work would be counted as self-performed work by the GC/CM.  If the amount of the work is more than $300,000, the bid bond from the subsidiary of the GC/CM would name the GC/CM as the obligee, provided that the subsidiary is actually a separate legal entity.
The requirement for a bid bond applies to projects where the work is more than $300,000.  The GC/CM should establish the bid bond requirement in the bidding documents for those subcontract bid packages more than $300,000.  Even if the amount of a subcontract bid ends up being less than $300,000, the bid bond must still be submitted as it would be a requirement of the bidding documents.

If you have a different interpretation of who the obligee should be under the various subcontract bidding scenarios, please contact me with your reasoning.

1 Space Available in Public Works Close-out Class Due to a Cancellation

Due to a cancellation, there is one spot left in the class this Wednesday, February 24, 2010 on "Public Works Contract Close-out: Bonding, Retainage, and Claims."

The class will be in Everett, Washington from 10:00 a.m. to 3:00 p.m.  Cost is $125.

If you're interested in attending, please call me at (206) 295-1464 to discuss registration.  First come, first served.