Local Government Contract Awards – Who is Eligible

Public agencies award a variety of contracts to many different individuals, vendors, firms, and contractors. The criteria that an entity must meet to be eligible for a public contract award will depend on the type of solicitation and contract involved. The necessary criteria is identified under each of the specific contracting types below.

Public Works

Award of public works contracts must be to the lowest responsible bidder who has a responsive bid. Responsiveness is determined by the agency as they review bid responses to assess if all the requirements of the bid have been met. This step pertains to all types of solicitations, not just public works contracts.

In addition, the bidder responsibility criteria of RCW 39.04.350 provides a clear definition of the mandatory criteria a contractor must meet to be considered a responsible bidder who is eligible for a public works contract award. The criteria were established to ensure that award is to a legitimate contractor, properly licensed in the state, and who has not been debarred from performing work in Washington. An agency may require other criteria be met for a project award through supplemental bidder criteria. These requirements must be detailed in the project specifications and pertain to elements that specifically impact the project to which they are being applied.

Services

When contracting for services, there are no statutory requirements that must be met by a bidder in order to be eligible for an award. Instead, performance criteria are established by the agency dependent on any qualifications, training, licensing, and expertise necessary to complete the work. An agency will want to be sure that the entity is properly licensed for the work that is necessary, if applicable, and that the entity meets the required specifications outlined in the solicitation. Usually all that is requested by the agency when the award is extended is a Unified Business Identifier (UBI) and a tax account. Using the Washington State Debarred Contractors List, the agency should verify and document that the contract awardee is not prohibited from receiving a public contract.

The agency will want to determine whether the entities it contracts with are required to obtain a business license from the local jurisdiction. If so, the jurisdiction may also require business license applicants have a state UBI. Beyond that, it is not understood that the agency is under an independent duty to require the entities it contracts with provide a UBI.

The exception to the above process would be work that is solicited as a purchased service requiring prevailing wages. These contracts fall within the prevailing wage description of public works (WAC 296-127-010) and the responsible bidder criteria of RCW 39.04.350 listed above under Public Works should be followed.

Purchases

When soliciting for materials, supplies, and equipment, most agencies are required to award to the lowest responsible bidder. There are no statutory definitions of a responsible bidder for purchases. The bidding agency will typically outline what is required in the solicitation. Primarily the bidder must be responsive to the specifications for the products being requested, which can include availability and delivery charges. The procuring agency might also require a business license for the jurisdiction depending on the nature of the purchase. An agency should check for and document that the winning bidder is not debarred on the state’s Debarred Contractors List.

State agencies have statutory guidelines, shown below, that address awards for purchases (RCW 39.26.160). Some local government agencies with broad contracting authority have adopted these guidelines in their own policies. If a local government agency has or considers using these guidelines, it is essential to consult with your legal counsel as this statute authority is for state agencies only. 

RCW 39.26.160  Bid awards—Considerations

(2) In determining whether the bidder is a responsible bidder, the agency must consider the following elements:

• (a) The ability, capacity, and skill of the bidder to perform the contract or provide the service required;

• (b) The character, integrity, reputation, judgment, experience, and efficiency of the bidder;

• (c) Whether the bidder can perform the contract within the time specified;

• (d) The quality of performance of previous contracts or services;

• (e) The previous and existing compliance by the bidder with laws relating to the contract or services;

• (f) Whether, within the three-year period immediately preceding the date of the bid solicitation, the bidder has been determined by a final and binding citation and notice of assessment issued by the department of labor and industries or through a civil judgment entered by a court of limited or general jurisdiction to have willfully violated, as defined in RCW 49.48.082, any provision of chapter 49.46, 49.48, or 49.52 RCW; and

• (g) Such other information as may be secured having a bearing on the decision to award the contract.

(3) In determining the lowest responsive and responsible bidder, an agency may consider best value criteria, including but not limited to:

• (a) Whether the bid satisfies the needs of the state as specified in the solicitation documents;
• (b) Whether the bid encourages diverse contractor participation;
• (c) Whether the bid provides competitive pricing, economies, and efficiencies;
• (d) Whether the bid considers human health and environmental impacts;
• (e) Whether the bid appropriately weighs cost and noncost considerations; and
• (f) Life-cycle cost.

Here are some examples of policies addressing award of purchases that were developed by a few agencies:

Award. The award of bid shall be made to the lowest responsible bidder whose bid meets the specifications and evaluation criteria set forth in the invitation for bids. The city may reject all bids at its discretion.

Award. The purchasing division may award purchase to the lowest responsive and responsible bidder whose quote fulfills the intended purpose, quality and delivery needs of the solicitation. In lieu of awarding the purchase, the purchasing division may reject bids, or may negotiate further to obtain terms.

Invitation for Bids. An invitation for bids shall be used in all cases where adequate information exists to form a complete and realistic bid specification, where the procurement lends itself to a firm, fixed-price dollar amount, and where award can be made principally on the basis of selecting the lowest responsible bidder. All awards to other than the low bidder must be authorized by law, documented on the bid sheet or where appropriate, and with the selection rationale clearly set forth.