2019 Legislative Outcomes for Procurement and Contracting - Part 3: SHB 1295

This is the last post in a 3-part series on new legislation that impacts municipal procurement and contracting. Part 1 addressed ESSB 5418, a complicated bill that touched on unit-price contracts, bid thresholds, and more. Part 2 addressed several bills, including ESSB 5418, ESB 5453, ESB 5958, ESSB 5035, and SSB 5017.

SHB 1295

The final blog in the series will look at SHB 1295. This bill has made procedural revisions to the alternate public works contracting methods of Design Build (DB) and Job-Order Contracting (JOC).

Design-Build Revisions

Previously, non-certified agencies were limited in the number of design-build projects they could use. SHB 1295 removes that limit; However, agencies must still obtain project-by-project approval from the project review committee (PRC). Additionally, the PRC will no longer be required to report annually on review procedures and recommendations for further uses of this procurement method (RCW 39.10.250).

For public bodies that are certified to use design-build procedures, the bill removes any limit to the number of projects that can be conducted within the 3-year certification period (RCW 39.10.270).

New authorizations through this bill specifically include the use of progressive design-build procedures and revises the project cost minimum to $2 million. Other qualifying criteria remain the same (RCW 39.10.300)

Agencies are now required to include in their contracts language obligating the design-build contractor to submit plans on how subcontracting and supplier opportunities will include underutilized firms (RCW 39.10.320).

Request for qualification (RFQ) documents are also directed to include the estimated design-build contract value and intended use of the project. However, a proposer is no longer required to include an accident prevention program in the RFQ. Instead, this program information is now required in any finalist’s proposal.

Expanded evaluation factors that may be used in an RFQ include an added description to potential technical qualifications, proposed use of certified minority- and/or women-owned businesses, and the ability to provide a performance and payment bond. Evaluation factors that agencies now may use in reviewing finalists’ proposals include a management plan to meet time and budget and one or more price-related factors. (Note: a new definition has been added to define “price-related factor” in RCW 39.10.210). These factors may also include technical approach and design concept. However, SHB 1295 removes the option to award a contract to the lowest proposer if all finalists are determined capable of producing an acceptable design (RCW 39.10.330).

During the design-build process, an agency must now stipulate that design builders submit plans that speak to the opportunity to use underutilized firms as subcontractors and suppliers. Underutilized firms could include, for example, certified minority-, women-, or veteran-owned businesses and small business as allowed by law (RCW 39.10.320).

Job-Order Contracting Revisions

Previously, the use of job-order contracting procedures was limited to a select group of agencies but SHB 1295 has opened its use to all public agencies (RCW 39.10.420). The evaluation process for competitive solicitations as described in RCW 39.10.430 has been expanded to include past performance on approved subcontractor inclusion plans.

The maximum amount that may be awarded under job-order contracting is $4 million per year for up to three years. This bill provides for the carryover of any unused capacity to the immediately following year’s limit. There is a maximum annual volume, including the unused capacity, not to exceed the limit of two years. These amounts are defined as being exclusive of Washington State sales and use tax.

An agency may now have three job order contracts in effect at any time instead of two (except the Department of Enterprise Services, which can have six). The 90% subcontract requirement now clarifies that distribution includes certified minority- and woman-owned subcontracts to the extent permitted by law based on subcontractor and supplier submissions, and it will limit bonding requirements to the extent possible (RCW 39.10.440). 

Work order limits have been raised to $500,000, excluding tax. A revision to construction parameters provides that new, permanent stand-alone structures may not exceed 3,000 square feet, where previously building space was limited to 2,000 square feet.

A state-registered apprenticeship program is now required when a work order is over $350,000, excluding tax, and includes over 600 single-trade hours. This requirement can be adjusted if:

• A lack of availability in the geographical area is demonstrated,
• It is not feasible due to a disproportionate ratio of material cost to labor hours,
• Participating contractors demonstrate a good faith effort to comply with the requirement, or
• The awarding agency deems other qualifying criteria appropriate.

(See RCW 39.10.450 for more information)

Public Records-Related Revisions

All documents related to the design-build procurement process under RCW 39.10.330 are exempt from disclosure until the highest scoring finalist is notified or the process is terminated following any exceptions under this statute (RCW 39.10.470).

The public records act — RCW 42.56.270 (2) — has been amended to include, as an exception, the financial information supplied for the purpose of qualifying to submit a bid or proposal for an alternative public works contracting procedure as required by RCW 39.10.200 through 39.10.905.