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The Perils of Piggybacking


December 6, 2018 by Oskar Rey
Category: Purchasing and Contracting

The Perils of Piggybacking

Piggybacking is a process under which a local government agency can purchase goods, equipment, material and supplies using another agency’s purchasing contract. It is authorized under RCW 39.34.030, and local government agencies are not limited to agencies within Washington—they may piggyback on contracts with public agencies in other states as well as the federal government. The benefits are clear: smaller agencies generally piggyback on the contracts of larger agencies, which allows them to obtain better deals than they would be able to get on their own.

Piggybacking has risks however, especially when an agency piggybacks on an out-of-state contract or with an entity with different purchasing requirements. Consider the following hypothetical: A Washington code city with a population under 20,000 wants to purchase a fire truck. It locates the truck it wants at an out-of-state purchasing cooperative that awarded its contract through an RFP process using “best-value” criteria. Price was only one of several criteria that the cooperative used to award the contract.

Can the code city piggyback on the cooperative’s contract?  The answer is "no" because RCW 35.23.352(7) provides that contracts for purchase of supplies, materials or equipment “shall be awarded to the low bidder,” and a best-value RFP process will not necessarily result in an award to the lowest bidder. In this scenario piggybacking would not meet the applicable bidding requirements.

Piggybacking has been a focus of the State Auditor’s Office (SAO) in recent years. In 2017 the SAO noted that:

The key to maintaining compliance when procuring through piggybacking is to ensure your local government’s own bidding requirements are still met. State law (RCW 39.34.030), which allows for piggybacking, does not relieve any public agency of any obligation or responsibility with respect to purchasing, except for the notice of bids or advertising requirements.

In August 2018 the SAO released additional guidance on piggybacking, explaining that:

Local governments should be aware that bid laws can vary significantly between different types of municipalities. Governments should be particularly cautious when looking to piggyback on contracts entered into by entities that are out-of-state or of a different government type.

Our hypothetical situation—a jurisdiction that wants to purchase a fire truck—can also demonstrate the varying nature of purchasing requirements depending on entity type. In the new scenario, it’s a fire district instead of a code city that wishes to purchase the fire truck. Does that change the end result?

The answer appears to be “yes.” In June 2018 the Washington Attorney General’s Office issued an informal opinion that analyzes whether a fire protection district can use best-value criteria and piggyback on the contract of a purchasing cooperative. The informal opinion notes that RCW 52.14.110 does not contain a provision requiring that the contract be awarded to the low bidder. Because the statute does not contain such a requirement, the informal opinion concludes that a fire protection district can incorporate other considerations into its bidding process. Price, however, should be one of the primary factors in choosing the winning bidder. This same analysis would apply to code cities with a population of 20,000 or more. Pursuant to RCW 35A.40.210,  purchases for code cities with a population of 20,000 or more are governed by RCW 35.22.620, which does not contain “low bidder” language. 

The informal opinion also notes that piggybacking on the contract of a purchasing cooperative is authorized under state law under certain conditions, such as compliance with the piggybacking entity’s procurement requirements. In addition to determining whether a piggybacking entity can use best-value criteria in general, consideration should be given to the nature and quality of the competitive process under which the original contract was awarded and whether the specific best-value criteria used are appropriate and consistent with the piggybacking agency’s procurement requirements.

This is a tricky area of the law because the municipal procurement requirements differ by municipal entity type, and there is a lot of variability in state law. Whether your agency can piggyback on a purchasing contract that uses best-value criteria depends on the applicable statute for your agency type—and, in the case of a code city, may even depend on population size.  

Questions? Comments?

If you have comments about this blog post, please comment below or email me at orey@mrsc.org. If you have questions about this or other local government issues, please use our Ask MRSC form or call us at (206) 625-1300 or (800) 933-6772.

About Oskar Rey

Oskar Rey has practiced municipal law since 1995 and served as Assistant City Attorney for the City of Kirkland from 2005 to 2016, where he worked on a wide range of municipal topics, including land use, public records, and public works. Oskar is a life-long resident of Washington and graduated from the University of Washington School of Law in 1992.

VIEW ALL POSTS BY Oskar Rey

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