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Acrimonious Acronyms in Purchasing and Contracting

Acrimonious Acronyms in Purchasing and Contracting

How many times have you read (or even written) a memo in which acronyms are bandied about with no clue or explanation as to which words are represented by the acronym and, worse yet, the term referenced by the acronym doesn’t match the term that you would generally use.  Purchasing and contracting terms and their acronyms are no exception:

“Since this is an ITB for a PW project, we need to make sure we get a P/P bond, hold retainage, and have an approved I&A set. When we close out the project we need to send the NOC to DOR. ESD, and LNI CR. We can use the SPWR, just not the LPWR provisions.”

“Let’s use an RFP process for this telephone system purchase and installation rather than a RFB.”

If you completely understood these two sentences, read no further: you are an astute acronym assessor. If you didn’t, read on.

Acronym What It Stands for Comments
ITB Invitation to Bid ITB, RFB, AFB, and BC all refer to a request for a lowest-price bid for a public works project or a lowest-price bid purchase of goods, equipment, materials, or supplies, most often via a formal, competitive process
RFB Request for Bid
AFB Advertisement for Bid
BC Bid Call
RFQ Request for Quotes Most often used for purchases of goods, equipment, materials, or supplies via an informal, competitive process
PW Public Works As defined in RCW 39.04.010(4)
P/P bond Performance and/or Payment Bonds Required for public works projects per RCW 39.08.010
RFP (Services) Request for Proposals–Services A request for proposals asks a firm to submit qualifications (if not already on file) and a proposed scope of services in response to specific agency needs
RFP (Telecommunications) Request for Proposals–Telecommunications RCW39.04.270 allows a municipality to acquire electronic data processing or telecommunication equipment, software, or services through competitive negotiation rather than through competitive bidding
RFQ Request for Qualifications A request for qualifications asks only for a firm’s general capabilities, list of principals, previous projects, number of employees, licenses, etc. for either a services roster or, perhaps, an individual project
I&A Set Intents and Affidavits Intents to Pay prevailing wages and Affidavits of Wages Paid are required for public works projects and some purchased services contracts
NOC Notice of Completion Required for public works projects over $35,000. An NOC must be reviewed and approved by the Department of Revenue (DOR) the Employment Security Department (ESD) and the Department of Labor and Industries Contract Release Office (L&I CR)
SPWR Small Public Works Roster Authorized by RCW 39.04.155
LPWR Limited Public Works Roster Authorized by RCW 39.04.155(3)
COI Certificate of Insurance Must be provided to the agency before work can begin
PS&E Plans, Specifications, and Estimate Required by RCW 39.04.020-.080
JOC Job Order Contracting JOC, GC-CM, and D-B are all alternative forms of contracting authorized by Chapter 39.10 RCW
GC-CM General Contractor - Construction Manager
D-B Design-Build

Let’s look at how these terms work in contracting for public works, purchasing goods and supplies, and procuring services.

Contracting for Public Works

For notification on public works projects, where a contract is to be awarded by a local government agency to a responsible firm that submits the lowest bid, I prefer the term Request for Bid (RFB), but any of the other terms (ITB, AFB, or BC) will work too. RFBs can be used for projects of all dollar amounts.

Note the bid summary table below. A formal, competitive bid process is required for all contracts over $300K, regardless of the jurisdiction. Below that dollar amount, authorized agencies may use the Small Public Works Roster (SPWR) process to ask for bids (RFBs) on a project. Below additional bid limits (say $40K/$65k for code cities), a jurisdiction may simply ask a few, selected contractors for informal bids.

Public Works Bid Summary
  Formal (Legal) Bid Advertisement Required Formal Public Bid Opening Required Bidding Open to:
Bids: $300,000 and Over Yes Yes All Registered Contractors
Informal Bids: Bid Limits to $300,000 (if SPWR is Used) No No Registered Contractors on an SPWR
Informal Bids: Below Bid Limits No No Selected Registered Contractors

Purchasing Goods, Equipment, Materials, and Supplies

When purchasing goods, equipment, materials, or supplies, each jurisdiction has dollar limits above which formal, advertised bids (RFB, ITB, AFB, or BC) are required. Below those limits, however, agencies are allowed to use the less formal Requests for Quotes (RFQs). Local jurisdictions should follow these four steps before any purchase of goods, equipment, materials, or supplies is proposed:

Step 1: Define the need
What kind of purchase is this and why does the agency need it?

Step 2: Determine the cost
How much will this item cost? Estimates should include appropriate sales/use taxes plus freight, handling, and set-up costs.

Step 3: Determine the procurement process
Staff should ask themselves the following questions:  How do I procure it?  Should I just buy it or do I need 3 quotes? Formal sealed bid? How will I advertise for it?  A web posting? DES contract? GSA? Purchasing Co-op?

Step 4: Identify approval authority
Staff should determine: Who has to approve the purchase?  No one? Foreman? Department head? Purchasing Manager? Chief Executive?  Council/Board/Commission?

Procuring Services

Services are classified in our Contracting for Services publication as:

  • A/E Professional Services
  • Personal Services
  • Purchased Services

In almost all cases, services are procured using a Request for Proposals (RFP) process or – possibly – a Request for Qualifications (RFQ) process followed by an RFP. Once the category of service has been identified, the next step is to decide which process will be used to select a service provider. The Contracting for Services publication has more detail on levels of competitive solicitation and delineates those levels of competition as formal, informal, and minimal.

Local governments have great latitude in setting their own policies and procedures, all except for Port Districts, which must follow Chapter 53.19 RCW for personal service contracts. Threshold dollar amounts in the three tables listed above can be modified by a jurisdiction to fit its comfort level. Agencies should recognize federal procurement limits as well as conditions of a grant or funding agency policies that may require advertising for a project.

Now that you know all the important purchasing and contracting acronyms, impress (and really annoy) your colleagues by using some at your next staff meeting! 

MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

Photo of John W. Carpita, PE

About John W. Carpita, PE

John was MRSC’s resource for many years on engineering design, purchasing and contracting issues, local improvement districts, and other infrastructure issues. He had a widely varied career as a consultant, county engineer, city engineer and project manager. He is now retired.