This page provides a general overview of procedures local governments in Washington State should follow when contracting for purchased services. It is part of MRSC’s series on Purchasing and Contracting.
For more detailed information, download MRSC's Contracting for Services publication.
What are Purchased Services?
Purchased services are those provided by vendors for routine, necessary, and continuing functions of a local government agency, mostly relating to physical activities. These services are usually repetitive, routine, or mechanical in nature, support the agency’s day-to-day operations, involve the completion of specific tasks or projects, and involve minimal decision-making.
Examples of purchased services include, but are not limited to:
- Delivery/courier service
- Herbicide application
- Recycling/disposal/litter pickup service
- Vehicle inspection, lubricating, and repair services
However, the state Department of Labor and Industries considers some services, such as HVAC maintenance or road striping, to be public works (see below).
No Statutory Requirements
Local governments in Washington have no statutory requirements for purchased service contracts, unless the contract requires prevailing wages as discussed below. This means that the state has not established bid limits or advertising requirements, and that bonds and retainage are not required.
Local governments are encouraged to follow the guidelines on this page. However, agencies must also consider their own resolutions, policies, and procedures to determine their own local contracting requirements.
Soliciting Bids
Local governments generally have significant flexibility in determining how to solicit competition. However, if the project includes grant funding, the grant conditions may require a specific solicitation process. Generally, the more complex or expensive the project is anticipated to be, the more rigorous the solicitation process should be.
Purchased Services vs. Public Works
The state Department of Labor and Industries (L&I) considers some service contracts, such as HVAC maintenance or road striping, to be public works and subject to public works bidding requirements.
Some other services fall into a gray area between purchased services and public works. Purchased service contracts generally require much less paperwork than public works contracts, but if a particular contract is in that gray area, the conservative approach is to consider it a public works contract.
If you are uncertain whether a particular task should be considered a purchased service or a public work, see L&I’s Prevailing Wage Policies and Determinations or contact the department directly.
Purchased Services and Prevailing Wages
Some purchased services, such as building maintenance services, are not subject to public works bidding requirements but still require prevailing wages under chapter 39.12 RCW.
If a purchased service requires prevailing wages to be paid, it may also be a good idea to require retainage and performance and payment bonds to protect against potential claims from workers not paid prevailing wages. However, state law is unclear on this issue. As noted by Mike Purdy in When Should Retainage and a Bond Be Obtained?:
- RCW 39.08.010 actually requires a bond for all “work.” Work is fairly broad and could reasonably be interpreted to refer to work subject to prevailing wages that is not a public work.
- RCW 60.28.011 states that retainage is required for all “public improvement contracts.” A “public improvement contract” is not defined. One could make the argument that a public improvement contract […] is the same as a “public work” in Chapter 39.04 RCW, although there is no explicit connection between the two.
Without further clarification from the state, it is up to local agencies to decide whether to withhold retainage and require bonds for these types of projects, depending on the size of the project and the agency’s potential financial liability.
If you are uncertain whether a particular task is subject to prevailing wages, you may browse L&I’s Prevailing Wage Policies and Determinations or contact the department directly. There are also examples in MRSC's Contracting for Services publication.
Examples of Purchased Service RFPs/ITBs
Below are some exmaples of purchased service requests for proposals and invitations to bid:
Purchased Service Contracts Without Prevailing Wages
Purchased Service Contracts With Prevailing Wages
For more sample documents regarding purchasing and contracting, see MRSC's Sample Document Library.