Contracting Keys: ACT to Award Local Government Agency Contracts

Contracting is a fundamental element in the procurement process, enabling local government agencies to secure public works projects or acquire equipment, supplies, and services through purchasing, renting, or leasing agreements. When an agency is intending to prepare and award a contract, I call the framework for success the ACT to contracting:

• Authority to contract (Who at your agency is authorized to award a contract?)
• Concise performance expectations (What are the performance expectations agreed to by your agency and the contractor/vendor? Are these outlined in the contract?)
• Transparent recordkeeping (Does your agency follow good practices for creating, maintaining, and storing procurement-related documents?)

This blog will provide an overview of the ACT to contracting.

Authority to Contract

Before awarding a contract, it is vital to confirm who at the agency has the legal authority to do so. Washington statutes, local codes, and agency policy often specify who can approve, or sign contracts on behalf of a government agency.

Certain contracts may require approval from the governing body (council, commission, or board) while others might be delegated to an executive or department head. For instance, for a city or town, the contracting authority is the council. This is provided in statute for second class cities (RCW 35.23.440(32)), code cities (RCW 35A.11.010), and towns (in various subsections of RCW 35.27.370).

Additionally, those who can approve or sign contracts on behalf of the agency must avoid conflicts of interest and comply with Washington’s ethics laws (Chapter 42.23 RCW), which includes disclosure of potential conflicts, recusal from decisions where a conflict exists, and a prohibition on gaining personal benefits from agency contracts. Reviewing these requirements not only ensures legality, it also protects an agency from future disputes and liability.

For more information on prohibited contract interests, see MRSC’s webpage, Ethics and Conflicts of Interest.

Concise Performance Expectations

A contract sets concise performance expectations for both the local government and the contractor/vendor. Key contract elements include:

• Scope of Work: Defines the services, materials, equipment, supplies, or other deliverables to be provided.
• Contract Term: Includes contract duration and the conditions under which it may be extended or terminated.
• Compensation: Covers payment terms including amounts, timing, and invoicing requirements.
• Compliance: Outlines how the project will adhere to applicable laws and regulations related to the deliverables specific to the project, such as prevailing wages, bonds, and retainage for public works contracts.
• Insurance Requirements and Indemnification: Protects the agency through risk management provisions.

Using standardized templates and having contracts reviewed by your agency’s legal counsel are good practices to minimize errors and remedy inconsistent performance expectations.

Transparent Recordkeeping

Contract document recordkeeping is essential, both for project management and statutory compliance. Public agencies should store bid documents, contracts, amendments, and related materials in an organized, accessible manner. This not only assists in monitoring and evaluating project delivery, but it also helps local governments maintain transparency in procurement processes.

Washington’s Public Records Act (Chapter 42.56 RCW) requires agencies to respond to public records requests, including those involving contracts. Additionally, the Washington State Auditor’s Office (SAO) may review contract documentation during audits.

Thorough documentation can demonstrate agency compliance with statutory requirements and reduce the risk of audit findings. Ultimately, such transparency also increases public confidence in the agency.

Conclusion

A local government agency following the ACT—Authority to contract, Concise expectations, and Transparent recordkeeping—has the starting point for the key essentials for contracting.

Confirming who has legal authority to award contracts, clearly defining agency and contractor/vendor performance expectations, and maintaining well organized contract documentation supports successful project delivery, ensures compliance with applicable laws, and builds public trust.

In closing, be sure to attend our contract training coming in March of this year.  Registration will soon be available on MRSC’s Upcoming Trainings page.