Specification Section for "Perforated Pastry Units"

Do you need a Division 01 specification section requiring the contractor to provide donuts at construction meetings?  What would such a spec section look like?  I can imagine developing such a spec must have been a fun group project. 

Click here for a laugh when you read a delightful specification section for "Perforated Pastry Units."

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Executing Change Orders on Unit Price Contracts

The total contract amount of a typical Design-Bid-Build public works contract is typically based either on a lump sum bid or a unit price bid in which the extensions of the unit prices multiplied by the estimated quantities are added together to arrive at a total contract amount.  During the term of the project, the estimated quantities may either increase or decrease from the estimated quantities.  

The Question:  Should a change order or change orders be executed to address changes in the quantities from the estimated quantities to the actual quantities?

Different Practices:  I am aware that some public agencies rely only on the original amount of the contract for a unit price contract and do not execute a change order to reconcile any differences.  However, I think it is important that a reconciling change order be issued, at least at the end of the project.  

Amount Paid and Contract Amount Should Be Consistent:  The reason why it is important to execute a reconciling change order to address changes in quantities is that the total contract amount as amended by change order should be consistent with the actual dollar amount paid to the contractor.  Without such a reconciling change order, the contract may reflect that more money has been paid to the contractor than was authorized with the contract amount.

Audit Risk:  From both a contractual perspective as well as an audit perspective (auditors regularly issue findings if the dollar amount paid under a contract is inconsistent with the amount authorized by the contract), it is important for public agencies to issue reconciling change orders for unit price contracts.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

When Are Circumstances "Unforeseen" Justifying an Emergency?

Waiving competitive bidding requirements due to an emergency public works project can be tricky.

According to Washington State law on exemptions to competitive bidding requirements, 

"'emergency' means unforeseen circumstances beyond the control of the municipality that either: (a) Present a real, immediate threat to the proper performance of essential functions; or (b) will likely result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken." (RCW 39.04.280 (3)).

Citing this definition, the Washington State Auditor's Office issued a finding against The Historic Seattle Preservation and Development Authority (Historic Seattle) for improperly declaring an emergency in order to waive competitive bidding for a remodeling contract on Washington Hall initially worth $480,000.  Including change orders, the cost grew to $670,000 before completion.

Audit Findings

• What Does "Unforeseen" Mean? Although the condition of the building was known before the purchase, Historic Seattle reasoned that before buying the building it "had no ability to repair the property and no liability for personal injuries resulting from the building’s unsafe condition". Using a definition of "unforeseeable" as meaning "not able to be predicted or planned for in advance" (emphasis added) Historic Seattle argued that it was "not able to plan to make repairs to the building in advance of acquiring ownership."
  
  The Auditor's report noted that a prior appraisal of the building - performed months before Historic Seattle bought it - had "documented 'significant deferred maintenance' and concluded the building had 'a remaining economic life of zero years'". Since the results of the appraisal "are advance notice that the building will require significant repair and remodeling" and the building's "neglect was obvious at the time of purchase," the Auditor concluded that neither "issues noted during the appraisal" nor "concerns for the health and welfare of the tenant" constitute unforeseen circumstances.
  
  
• Building Open During "Emergency" Construction: The Auditor's report also called into question the timeline of the repairs, observing that although "state law says a declaration of emergency is to be addressed promptly" the repairs continued for over a year. Moreover, the Auditor noted that since Historic Seattle "declared an emergency stating the building was unsafe for general occupation," opening the building six months before construction was finished "appears to contradict the need for the emergency declaration." Historic Seattle responded that in spite of delays "all [work] but the electrical service upgrade... was completed within four months of award of the bid".
  
  
• Work Not Limited to Emergency Work: The Auditor also found that the "contract was not limited to repairs related to unsafe conditions" and that Historic Seattle "allowed unlimited change orders."

Questions to Ask Before Declaring an Emergency

• Is it an Emergency? Does the situation fulfill both parts of the exceptions to competitive bidding requirements in RCW 39.04.280? On a basic level, you can ask these two questions:

1. Was the situation not anticipated and beyond the public agency's control? And...
   
2. Is the situation either threatening performance of essential agency functions or likely to cause property damage, injury, or death if it's not addressed?

• Is the Emergency Timely?  Did the public agency formally waive competitive bidding requirements in a timely manner?  Does the project address the emergency work in a timely manner?

• Is there Sufficient Time to Bid the Project?  Does the public agency have sufficient time to conduct a publicly advertised bid process?

• Does the Emergency Go Too Far? Does the contract cover only work that's needed to address the emergency situation, or does it also include additional work that would be more appropriately covered through competitive bidding? (This is a good question to ask about any change orders to the project as well)

Read the full audit findings here.

Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Improprieties by Alaska Procurement Officials

John P. Ahlers, a well-known and respected Seattle based construction attorney, has written in his Construction Law Blog about a bid protest case in Alaska where the protester filed a lawsuit against four procurement officials as individuals.

Read the full blog entry here.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Training: Alternative Delivery - Is it Right for Your Next Project?

Rodger Benson

When: Wednesday, April 20, 2011 (4:45 to 7:00 p.m.)

Where: Seattle, Washington (Rock Salt Restaurant, 1232 Westlake Ave N)

Speaker: Rodger Benson, LEED AP, Director of Project Development, M.A. Mortenson Company

Description: Learn from the industry what the fuss is all about and decide for yourself if you’re potentially missing a valuable delivery model in your capital project tool box.  Whether its job order contracting, design-build, or GC/CM, many public bodies in Washington state are increasingly turning to these alternatives to Design-Bid-Build.  You’ll hear what the industry is saying about:

• Its history
• Its structure
• Its pros and cons
• Who can use it
• How you can get approval to use it
• How to procure it, and
• How to get the most from it

Sponsored by: The American Public Works Association (APWA) Washington State Chapter's Management & Public Administration Committee (MPAC)

Cost: $37 (includes dinner)

Registration deadline: Wednesday, April 13, 2011

Information and Registration: Click here

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Should Public Works Projects Use Local Workers? San Francisco Local Hire Law Makes Waves

The City of San Francisco is causing a stir with a new local hire law that goes into effect on Friday, March 25, 2011. While a number of jurisdictions around the country encourage or require a certain percentage of the work on public works projects be performed by local workers, San Francisco's new ordinance is among the most stringent.

A Tougher Standard:  Until now, the City had a less strict regulation requiring a non-binding "good faith" effort from contractors to hire half of their work force locally for public works projects. The new law - which applies to projects within 70 miles of the city and over $400,000 - requires that 20% of work hours be performed by city residents (approximately the amount performed under the current system). However, the percentage rises 5 points every year until it reaches 50%.

Local Hire Laws Face Problems in the Past: While local hire laws can be a popular way to try to funnel public dollars back to a region's economy, they are not without potential problems. A state-wide local hire law in Washington was struck down by a Washington State Supreme Court decision in 1982 as violating the privileges and immunities clause of the U.S. Constitution. Another local hire ordinance known as the "Lewis Law" was struck down in Cleveland, Ohio in 2007 (read the Court of Appeals decision here).

In spite of past challenges to similar laws, the new ordinance in San Francisco shows that there is still ongoing interest from many in directing as much public funding as possible back into the local economy.

More Resources:

• Coverage of the new law and response to it

• San Francisco Chronicle article on the proposed ordinance before it was passed into law

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Job Opening: Contracts Consultant

Department of General Administration (Washington State)

• Position: Contracts Consultant

• Location:  Olympia, Washington

• Summary of Duties:  This position in the Office of State Procurement provides expert level statewide contracting consultant and assistance to state agency directors, managers, and contracts staff on matters related to the development and implementation of policies and procedures consistent with Washington State law.

• Salary:  $56,000 to $68,200

• Closing Date:  Wednesday, March 30, 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