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Unit Priced (On Call) Public Works Contracts

This page provides an overview of unit priced public works contracts (also known as “on call” contracts) authorized for certain local governments in Washington State, including definitions and statutory requirements.

It is part of MRSC's series on Public Works Contracts and Purchasing and Contracting.

New legislation:

  • Effective July 28, 2019, ESSB 5418 authorizes counties with a purchasing department, transit districts, and water-sewer districts to use unit priced contracting and makes changes to the prevailing wage requirements for public utility district (PUD) unit priced contracts. See below for details.
  • Effective July 28, 2019, SHB 1295 authorizes all public agencies to use job order contracts, which are discussed briefly below but not addressed in detail.

What is a Unit Priced Contract?

A unit priced public works contract, sometimes called an “on call” public works contract, is when a local government contracts for an unknown number of small public works projects over a fixed period of time (“indefinite quantity, indefinite frequency”).

Each agency that is authorized to use unit priced contracts has a separate enabling statute (see below). However, the different statutes all provide the same definition of a unit priced contract:

“[A] competitively bid contract in which public works are anticipated on a recurring basis to meet the business or operational needs of the [agency type], under which the contractor agrees to a fixed period indefinite quantity delivery of work, at a defined unit price for each category of work.”

While traditional public works contracts are awarded for specific projects/scopes with a specific total dollar value, unit priced contracts are not associated with a particular project, do not guarantee any amount of work, and do not establish a total dollar value (although the contract may cap the dollar value at a certain level over the life of the contract). Instead, the agency agrees to pay a defined “unit price” for certain types of anticipated (but unplanned) work or trades over a certain time period.

The prices for different tasks may be based upon different units. Commonly used units include:

  • Weight, such as tons
  • Surface area, such as square feet or acres
  • Volume, such as gallons or cubic yards
  • Length/depth, such as linear feet or vertical linear feet
  • Time, such as hours
  • Quantity of items
  • Lump sum per task

When a specific project is identified, individual work orders are authorized based upon either a “not-to-exceed” time and materials basis or a negotiated lump sum amount using the previously established unit prices.

Unit priced contracts allow public agencies to contract for multiple or recurring small public works projects over time without having to bid each project separately. This saves the agency time and money, especially for unanticipated projects that may arise at the last minute.

Unit priced contracts are often used for repair, renovation, or maintenance of public facilities, all of which fall under “public work” as defined in RCW 39.04.010(4).


Unit Priced Contracts vs. Job Order Contracts

Unit priced contracts are different than job order contracts under RCW 39.10.420 et seq. Until 2019, job order contracts were only authorized for certain larger public agencies. However, effective July 28, 2019 all public agencies are authorized to use job order contracting (see SHB 1295).

Job order contracts generally have a much wider scope than unit priced contracts, encompassing all conceivable construction tasks/projects, and have a more rigorous solicitation process. Job order contracts also require at least 90% of the work to be subcontracted, making them less suitable for smaller agencies and small public works projects.


What Agencies Can Use Unit Priced Contracts?

Until recently, no agency had specific statutory authority to enter into "on call" or unit priced public works contracts, although some agencies had been using such contracts.

In 2012, the State Auditor’s Office (SAO) determined that "on call" public works contracts were not authorized by state statute, stating that they could potentially violate public works and prevailing wage statutes. SAO recommended that local jurisdictions establish policies, procedures, and internal controls to ensure compliance with public works and prevailing wage statutes.

This conclusion was based on the lack of specific statutory authority and the fact that RCW 39.04.010(2) defines a public works “contract” as “…a contract in writing for the execution of public work for a fixed or determinable amount duly awarded after advertisement and competitive bid, or a contract awarded under the small works roster process in RCW 39.04.155” (emphasis added).

But a series of new legislation from 2017-2019 provides specific statutory authority and requirements for the following jurisdictions to use unit priced contracts:

  • Cities and towns
  • Counties with purchasing departments: RCW 36.32.235(9), as amended by ESSB 5418 (effective July 28, 2019).
    • Note that by its placement in the statute, it appears that this provision only applies to counties with purchasing departments. The subsection states that "A county may procure public works with a unit priced contract under this section..." [emphasis added]. The section being referred to is RCW 36.32.235, and the first subsection of that statute refers to counties that have established purchasing departments. (ESSB 5418 also removed the 400,000 population requirement from RCW 36.32.235.) Although this may not have been the intent of the legislation, counties without purchasing departments should seek the advice of their prosecuting attorney if they wish to use unit priced contracts, until some further clarification is established or the State Auditor's Office provides direction.
  • Port districts: RCW 53.08.120(3)
  • Public transportation benefit areas, county public transportation authorities, and regional transit authorities: New section in chapter 39.04 RCW that has not yet been codified as of this writing; see ESSB 5418 (effective July 28, 2019). For simplicity's sake we will refer to these district types as "transit districts."
  • Public utility districts (PUDs): RCW 54.04.070(7)
  • Water-sewer districts: RCW 57.08.050(6), as amended by ESSB 5418 (effective July 28, 2019)

In addition, MRSC has previously advised that some agencies not specifically authorized above may be able to use unit priced contracts below their statutory bid limits if established by policy, as described later on this page.


Bid Advertisement and Award

The different agencies' various enabling statutes (see above) all state that a unit priced contract is a “competitively bid contract” but do not provide more clarity than that. MRSC interprets this language to mean that eligible agencies must follow their competitive bidding requirements, and that all unit priced contracts should be bid using a competitive process regardless of the estimated contract amount.

For contracts competitively solicited through the small works roster, agencies would presumably need to monitor the status of such contracts to ensure any work or contract extensions do not exceed the small works roster limit ($350,000 for eligible agencies except port districts, which should use the previous limit of $300,000 – see our page on Small Public Works Rosters for more information). MRSC suggests consulting with your attorney to verify the procedures your agency should follow.

To see your agency’s competitive bidding requirements, use our Find Your Contracting Requirements tool.

The invitation for bid must include estimated quantities of the anticipated types of work or trades and specify how the agency will issue or release work assignments, work orders, or task authorizations.

Contracts must be awarded to the lowest responsible bidder under RCW 39.04.350. For more information, including responsible bidder criteria, see our page Bidding and Awarding a Public Works Contract.

  • For all eligible agencies except PUDs: Whenever possible, the agency must invite at least one proposal from a certified minority or woman contractor. (PUDs have no such statutory requirement.)
  • For PUDs only: If electrical facility construction or improvement work is anticipated, bidders must be prequalified under RCW 54.04.085.

Contract Duration

Different agency types have different limitations on the maximum contract length for unit priced contracts:

  • For cities, towns, port districts, and PUDs: The initial term may not exceed three years, with the option to extend or renew the contract for one additional year.
  • For counties, transit districts, and water-sewer districts: The initial term may not exceed one year, with the option to extend or renew the contract for one additional year.

Prevailing Wages

Contractors must pay prevailing wages for all work that would normally be subject to prevailing wages under chapter 39.12 RCW.

For all agency types, prevailing wage rates must be updated annually, using the rates in effect at the beginning of each contract year, and intents and affidavits for prevailing wages paid must be submitted annually for all work completed during the previous 12 months.

(Previously, PUDs had different requirements that established the date of each work order as the effective prevailing wage date, which required intents and affidavits to be filed for each individual work order. However, this was changed effective July 28, 2019 to match the other agencies' requirements. See ESSB 5418.)

For more information, see our page on Prevailing Wages.


Change Orders

During the course of a contract, there may be occasions when the original unit prices do not address particular work items that are needed. In those situations, new line items may be added by change orders, or the work may be accomplished under a time and materials work order.


Systemwide Maintenance and Repair Contracts

There are also some systemwide maintenance and repair contracts that are sometimes referred to as “on call contracts” but actually fall under traditional public works contracting as long as the scope is clearly and properly defined.

To qualify as a traditional public works contract instead of a unit priced contract, a systemwide maintenance or repair contract must cover specific activities planned in advance and budgeted (as opposed to unit priced contracts which cover activities that are not specifically planned and have no set budget).

Examples include:

  • Sewer or storm drain “jetting” (cleaning) up to a certain budget amount, but not an exact number of linear feet
  • Sidewalk/trail construction or reconstruction in relation to an agency’s pedestrian master plan (not necessarily a fixed quantity), up to a certain budget amount
  • Street lighting and signal maintenance and repair in relation to an annual, systemwide work plan
  • Annual contracts for pavement crack sealing, chip seals, overlays, etc.

These contracts can be structured so that they qualify as public works projects with readily determinable quantities and costs related to a fixed scope. Contracts are often awarded on an annual basis, with optional renewals, but multi-year contracts are also common.

However, systemwide maintenance and repair contracts should not cover unanticipated projects or emergency repairs, which would fall under unit priced contracting.


Unit Priced Contracts Below Statutory Bid Limits

In addition to the agencies that are specifically authorized by statute to use unit priced contracts, MRSC has advised that some other agency types (such as fire districts) may be able to use unit priced contracts below their established public works bid limits, since those projects have no statutory bid requirements and do not meet the criteria of “contracts” under RCW 39.04.010(2) because they would not be for a fixed or determinable amount.

If a local agency that does not have specific statutory authority to use unit priced contracting chooses to pursue this option after carefully reviewing its enabling statutes, we recommend establishing a policy for unit priced contracts and limiting the total dollar amount over the life of the contract to an amount less than the agency’s bid limits.


Examples of Unit Priced Contracts

As local governments begin using unit priced contracts under the new statutory authority, MRSC will be seeking examples of unit priced bidding documents and contracts. If you have examples you would like to share with us, please email Gabrielle Nicas at gnicas@mrsc.org.

Note that some agency types are restricted to an initial contract term of one year while others are authorized for an initial term of three years.


Last Modified: August 21, 2019