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Procurement Policy Guidelines

This page provides guidance for local governments in Washington State that are looking to establish or revise their procurement policies, along with sample procurement policies.

It is part of MRSC’s series on Purchasing and Contracting.

Procurement Policies and Manuals

When it comes to purchasing and contracting, clearly adhering to a systematic process can sometimes be difficult. Irregularities in purchasing and contracting are among the most common SAO audit findings. These missteps, especially when magnified by media reporting, erode public trust in an agency’s management skills.

One way to combat these issues and maintain public trust is through strict adherence to an agency-wide procurement policy and procedure manual. If your agency doesn’t yet have a manual, or if you’re looking to update yours, here are some practical tips to help you get started.

General Guidelines

  • For each type of procurement (purchases, services, and public works contracts), acknowledge general principles of:
    • Minimal competition for small purchases/contracts
    • Informal competition for larger purchases/contracts
    • Formal competition for the largest and most complex purchases/contracts
  • Reference any RCW sections that contain purchasing and contracting guidance specific to your agency. This includes bid limits, small works rosters and vendor lists, and formal competitive requirements.
  • If your agency has no statutory guidance, it should establish reasonable thresholds and processes for purchases, services, and public works contracts. When establishing these policies, you should document other similar bid limits and competitive requirements.
  • Clearly identify who has the authority to take actions regarding purchases and contracts. Establish clear roles and responsibilities for all relevant agency staff, ranging from elected officials and department heads to field and office personnel.
  • Add a section to your code of ethics to guide the personal and professional conduct of agency personnel who manage or participate in procurement activities. For instance, the purchasing manual for the City and County of Yakima states:

Purchasing Division employees may neither solicit, accept, nor agree to accept any gratuity for themselves, their families or others that results in their personal gain which may affect their impartiality in making decisions on the job. Discounts or concessions realistically available to the general population, items received that do not result in personal gain, and samples to the City/County used for general City/County use are examples of items that are not gratuities. Personal judgment should be used and questions regarding particular problems/events should be referred to the employee’s manager.

Purchases

  • For purchases below your agency’s bid limits, identify reasonable procedures for obtaining quotes from vendors, including the number of quotes, the process for obtaining quotes, and how to document the quotes.
  • Most agencies can use the vendor list process of RCW 39.04.190 for purchases above the agency’s bid limits, up to a certain amount. If your agency is eligible, your policies should re-state the statutory guidance and add any nuances that are specific to your agency’s internal procedures.
  • For purchases above the bid limits and/or vendor list limit, identify a formal competitive process, including advertisement requirements, sealed bids, public bid openings, protests, and other relevant details.
  • Establish procedures and practices for the use of intergovernmental purchases, including federal contracts and Department of Enterprise Services master contracts.
  • For policy guidance, see MRSC's purchasing bid limit matrix and suggested formal competitive process for purchasing.

Public Works

  • For public works contracts of any size, clearly state that prevailing wages must be paid and that contracts can only be awarded to responsible bidders.
  • Identify all applicable sales tax and retainage and bonding requirements that may apply.
  • For public works contracts below your agency’s bid limits, identify reasonable procedures for obtaining quotes from vendors, including the number of quotes, the process for obtaining quotes, and how to document the quotes.
  • Most agencies can use the small works roster process of RCW 39.04.155 for public works contracts below $350,000 ($300,000 for port districts and irrigation districts). If your agency is eligible, your policies should re-state the statutory guidance and add any nuances that are specific to your agency’s internal procedures or roster provider.
  • For purchases above the bid limits and/or the roster limit, identify a formal competitive process, including advertisement requirements, sealed bids, public bid openings, protests, and other relevant details.
  • Note the need for insurance and associated certificates naming the city as additional insured under the contractor’s policies.
  • For policy guidance, see MRSC's public works public works bid limit matrix and suggested formal competitive process for public works.

Architecture and Engineering Services

  • For architecture and engineering contracts, clearly state that a qualifications-based selection process is required, in which an agency assesses the expertise of competing firms and selects the most highly qualified firm, then negotiates the final project scope, schedule, and budget. If the agency and the most highly qualified firm cannot reach an agreement, the agency then negotiates with the next most highly qualified firm.
  • Your policies must provide advance notification of the need for architecture and engineering services, provided through a legal advertisement for a given need or a solicitation for a consultant roster.
  • Agencies should establish policies and procedures for minimal, informal, and formal competition based on the estimated contract price, type of project, and project complexity.

Personal Services

  • Except for port districts (chapter 53.19 RCW) and public facility districts (RCW 35.57.070 or RCW 36.100.180), local governments in Washington have no statutory restrictions on contracting for personal services and have great flexibility in setting their own policies and procedures.
  • Agencies should establish policies and procedures for minimal, informal, and formal competition based on the estimated contract price, type of project, and project complexity.
  • For port districts, refer to our Personal Services Contracting Manual for Ports.

Purchased Services

  • Local governments in Washington have no statutory restrictions on contracting for purchased services and have great flexibility in setting their own policies and procedures.
  • Agencies should establish policies and procedures for minimal, informal, and formal competition based on the estimated contract price, type of project, and project complexity.

Competitive Bidding Exemptions

  • Reference any appropriate RCW sections that allows for competitive bidding exemptions. RCW 39.04.280 provides uniform exemptions for purchases and public works projects, which apply to most agencies. Some agencies have their own statutory requirements.
  • Clearly define and identify the situations under which competitive bidding procedures may be waived.
  • Clearly identify the processes that your agency must follow in the event of each exemption, including documentation, contract award, and contracting procedures.
  • For auctions, the mayor, council, or commission should preapprove an upper limit for the person doing the bidding.

Other Possible Procurement Guideline Topics

Examples of Local Procurement Policies

Note regarding federal funding: Some of these documents might not contain language to meet the federal procurement requirements found in 2 CFR 200 (Uniform Guidance).

Cities

Counties

Special Purpose Districts

For more sample documents related to purchasing and contracting, see our Sample Document Library.


Last Modified: January 23, 2023