Contracting and Competitive Bidding
This page provides a general overview of contracting requirements for local governments in Washington State, including project types, bid limits, levels of competition, and conflicts of interest.
It is part of MRSC’s series on Purchasing and Contracting.
Local government purchases and projects 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 goods, equipment, supplies, or materials that are not connected with a public works project.
- Professional architecture and engineering 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.
To look up your agency’s bid limits, competitive bidding requirements, and possible exemptions for a particular type of project, use MRSC’s Find Your Contracting Requirements tool.
Washington statutes establish dollar amounts known as bid limits for many different types of agencies and contracts. 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, and formal. State courts have generally interpreted ambiguous statutes in favor of formal competitive bidding.
Below an agency’s bid limits, competitive bidding is not required, and agencies may seek quotes directly from individual vendors. (For certain agencies, these vendors may be chosen from a small works roster or vendor list as described in the next section.)
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.
State statutes allow many agencies to follow less stringent competitive requirements for projects below a certain threshold by selecting businesses from a small works roster or a vendor list. (Agencies are only eligible if their statutes specifically authorize the use of a roster and/or vendor list.)
For public works, eligible agencies can use the small public works roster process for projects below $350,000.
For purchases, eligible agencies may use a vendor list up to a certain amount, with the maximum dollar limit depending on the agency’s statutes.
MRSC provides its own roster service for local governments across Washington, connecting hundreds of local governments to thousands of businesses for public works, consulting services, and purchases. To sign up or learn more, visit MRSC Rosters.
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. Usually, the statutes require 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, and the bid results must be published.
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.
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:
- Office of Management and Budget: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200)
- State Auditor's Office: Federal Procurement and Equipment Requirements Under Uniform Guidance (2017) - PowerPoint presentation from WPTA conference. Includes frequent findings, bid laws, and asset management.
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.
Practice Tip: Every agency should adopt a detailed Code of Ethics to provide clear guidance to its employees and officers. Among other things, the code of ethics should address participation by agency staff in provider-sponsored seminars and post-agency employment with providers that perform services for the agency.
The Port of Seattle Code of Ethics and Workplace Conduct (updated 2016) provides a detailed example, and other examples are available through NIGP, the Institute for Public Procurement.