Local Government Contracting and Agreements for Non-Public Works Projects

Local governments have numerous contracting options available for entering into non-public works contracts with private companies and other public agencies. This blog explores which options can be used under which circumstances.

Personal Service Contracts

Personal service contracts can be used by all local government agencies for various types of work, such as contracting for prosecution services, working with consultants to draft development code regulations, or using local auto repair shops to maintain agency vehicle fleets. With the exception of port districts and public facility districts, which both have special requirements, local governments have no statutory requirements for personal service contracts. (See MRSC’s Personal Services & Consultant Contracts webpage for the special requirements for port districts and public facility districts.)  

Even though not statutorily required, all local governments should still adopt guidelines for contracting for personal services, including delegating signature authority, and identifying when RFPs or RFQs will be solicited. Our Personal Services & Consultant Contracts webpage explores these considerations in more detail.

Interlocal Agreements

Local government agencies will frequently choose to contract with one another either to jointly provide a governmental service or to have one agency provide the service on behalf of the other. Agencies will enter into interlocal agreements to accomplish this cooperative undertaking. Common governmental services provided via interlocal agreement include animal control administration, fire or law enforcement services, or parks and recreation.

Interlocal agreements improve governmental efficiency by avoiding service duplication. So long as the service is within the power of both government agencies, they can contract via interlocal agreement to accomplish the service jointly.

However, interlocal agreements are not required in all situations where two governments contract with each other. If the service being offered is not an exclusive government service — such as City B offering to service City A’s vehicle fleet — an interlocal agreement is not required. Since vehicle maintenance is a service City A could receive from a private party, a service contract between City A and City B is the more appropriate contracting tool.

Interlocal agreements must follow the requirements of the Interlocal Cooperation Act, Chapter 39.34 RCW, which requires inclusion of specific terms in the agreement, such as:

• Duration of agreement;
• Purpose of cooperative undertaking;
• Type and description of separate entity created by the interlocal, if any;
• If no separate entity is created, identification of the administrator or joint board responsible for administration and for managing any property acquired;
• Identification of financial support for the interlocal, including establishment and maintenance of a budget; and
• Termination of the agreement, and how to dispose of any property upon termination.

Interlocal agreements must be approved by the legislative body of each agency and filed with the county auditor or posted on participating agencies’ websites or other electronically retrievable public source.

Mutual Aid Agreements

Mutual aid agreements are frequently used by local governments in the emergency management context where they are specifically identified in RCW 38.52.091 as a tool for public agencies to provide “reciprocal emergency management aid and assistance in case of disaster too great to be dealt with unassisted.” A great example of this is the Washington Public Utility District Mutual Aid Plan, which provides the framework under which public utility districts agree to provide mutual assistance when resources allow during emergency situations that cause electric system damage.

Memorandums of Understanding or Agreement

Local governments often use memorandums of understanding (MOU) or memorandums of agreement (MOA) to broadly outline an agreement that will eventually lead to a more formal agreement. MOUs/MOAs used in this manner are not legally binding as they do not require parties to commit funds or other resources. They can be appropriate in circumstances where the parties are not quite ready to commit resources but recognize the value of beginning to identify desired expectations and responsibilities before being locked into a binding contract.

An example of an MOA used in this manner is the Memorandum of Understanding between the City of Marysville and the Port of Everett related to collaborating on evaluating economic development opportunities within an industrial center.

Conclusion

Local governments have several options when contracting and should choose the most appropriate agreement, depending on the circumstances. Not quite ready to commit? Use an MOU or MOA. Ready to work cooperatively with another agency? Use an interlocal agreement. Do you want to share resources in an emergency situation? Use a mutual aid agreement. Does your local government just want to hire a private consultant for assistance? Go with the standard personal service contract.