Contracting and Competitive Bidding

Procurement Types

Local government procurements generally fall into one of five categories:

• Public works: All work, construction, alteration, repairs, or improvements to physical property, other than ordinary maintenance, that are paid for by a municipality.
• Purchasing: Purchases of materials, equipment, or supplies that are not connected with a public works project.
• Professional architecture and engineering (A&E) services: Professional services provided by a consultant that fall under architecture, engineering, land surveying, or landscape architecture.
• Personal services: Technical expertise provided by a consultant to accomplish a specific study, project, task, or other work statement, not including professional architecture and engineering services.
• Purchased services: Services provided by vendors for the routine, necessary, and continuing functions of a local agency, mostly related to physical work.

The required level of competition varies depending on project type, agency type, estimated price, and project complexity. Generally, the more complex or expensive the project is anticipated to be, the more rigorous the solicitation process should be.

Bid Limits

Washington statutes establish dollar amounts known as "bid limits" for many different types of agencies and contracts, and especially for public works contracts and purchases of goods, equipment, materials, and supplies.

Competitive bidding is required above these bid limits in order to encourage fairness, open competition, and efficiency. Below these limits, agencies have varying degrees of flexibility in establishing their own purchasing and contracting procedures.

There are three basic levels of competition: minimal, informal (roster/vendor lists), and formal. State courts have generally interpreted ambiguous statutes in favor of formal competitive bidding.

State law does not establish competitive bidding requirements for certain agency types or procurement types, including most service contracts. Regardless, agencies should establish their own procurement policies that establish thresholds and competitive bidding requirements for minimal, informal, and formal bidding.

Minimal Competition: Small Contracts and Purchases

Below an agency’s bid limits, competitive bidding is not required and agencies may seek quotes directly from individual vendors. For agencies that use a small works roster, vendor roster (vendor list), and/or consultant roster, the agency may contact businesses from the appropriate roster in accordance with state law and local policies.

There is no requirement to seek multiple quotes, but most agencies do so anyway, down to some practical limit established in their policies. Kirkland and Woodland, for instance, require multiple bids for public works projects over $7,500 but allow single bids for any projects smaller than that. Similarly, Kirkland does not require written quotes for purchases less than $7,500, but informal phone quotes are encouraged.

Informal Competition: Rosters/Vendor Lists

State statutes and/or local policies allow many agencies to follow less stringent competitive requirements for projects below a certain threshold by soliciting bids, proposals, and/or qualifications from businesses on a roster or vendor list.

A roster or vendor list is a list of eligible businesses that are interested in bidding for smaller contracts, and agencies must follow the bidding processes established by state law and/or local policy.

For information on using a small public works roster, see our Small Works Roster Manual.

For purchases, eligible agencies may use a vendor list (vendor roster) up to a certain amount, with the maximum dollar limit depending on the agency’s statutes.

For service contracts – including personal services, purchased services, and professional architecture and engineering (A&E) services – there are few to no state laws governing competitive bidding, so the use of a consultant or service roster is generally subject to local policies and procedures.

Formal Competitive Bidding

Above defined statutory thresholds, or in the absence of other authorized procurement methods, formal competitive bidding is required. Typically these solicitations are more rigorous or time-intensive, and likely apply to larger and more complex contracts and purchases.

The exact formal procedures are laid out in each agency’s enabling statutes and/or local policies. Usually, formal competitive bidding requires public advertisement for a specified time and in a particular manner, sealed bids, and public bid openings. The contract must be awarded to the lowest responsive/responsible bidder, the highest-scored proposal, or the most highly qualified firm (depending on the procurement type and solicitation type), and the bid results must be published.

Competitive Bidding Exemptions

State statutes also provide competitive bidding exemptions in certain circumstances. Some exemptions, such as emergency contracts or sole source purchases, apply broadly to almost every type of local government, while others apply much more narrowly. To qualify for an exemption, agencies must follow certain steps to verify the situation.

Federally Funded Projects and Purchases

Federal funds and grants often come with their own separate and more restrictive bidding requirements. Competitive bidding may be required by federal agencies, even below the state bid limits, and the required competitive process may be more demanding.

If your project uses any federal funding, you must follow both the state and federal competitive requirements, using the more stringent standard of the two. MRSC strongly recommends that local agencies work closely with their granting agencies and obtain, in writing, a concise but complete description of all the requirements for that particular grant.

For more information, see:

• MRSC Find Your Contracting Requirements – Select your project/agency type; the bidding requirements will then include an overview of federal procurement requirements for that procurement type
• Office of Management and Budget: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200)

Conflicts of Interest

All local governments in Washington are subject to the state’s conflicts of interest statute (chapter 42.23 RCW). Generally, municipal officers are prohibited from having financial interests in contracts made by or under the officer’s supervision or for the benefit of their office. Any contract that violates this statute is void, and the officer may be subject to financial penalties and removal from office.

Municipal officers are allowed to have “remote interests” in a contract as long as the officer does not participate in the selection of the contractor. In addition, there are a number of very specific exemptions that may apply. For more details, see our page on Ethics and Conflicts of Interest.