2019 Legislative Outcomes for Procurement and Contracting - Part 2

Before moving on to Part 2 of this blog series, there are a few clarifications and statements that need to be issued regarding Part 1, which covered ESSB 5418.

ESSB 5418: Small Works Roster Threshold, Unit-Priced Contracting

Clarifications regarding ESSB 5418 concern the small works roster threshold as it applies to ports and irrigation districts and unit-price contracting as it applies to counties.

Port Districts: The threshold for the small works roster for Ports is established in RCW 53.08.120(2)(b). It is currently set at $300,000, and this amount was not revised by the 2019 legislative actions. However, the authorizing statute does not specifically state any threshold for using limited public works procedures within the small works roster. Consequently, the increase of the limited public works process within RCW 39.04.155 to $50,000 appears eligible for use by Port districts.

Irrigation Districts: The portion of ESSB 5418 that addressed changes for irrigation districts was vetoed, as these changes were also part of ESB 5453, which is summarized later in this post. However, it appears irrigation districts will not have authority to increase their small works roster threshold beyond $300,000, as discussed below.

Counties: The authority for unit-price contracting for counties was provided under RCW 36.32.235. However, this statute (as revised) seems to pertain only to counties with purchasing departments. The subsection with unit-price contracting authorization states:

A county may procure public works with a unit priced contract under this section for the purpose of completing anticipated types of work based on hourly rates or unit pricing…….

The section being referred to in the phrase "under this section" is RCW 36.32.235. The first subsection of the statute refers to counties who have established a county purchasing department. It could therefore be argued that the subsection added through ESSB 5418, which authorizes unit-price contracting, only applies to those counties with purchasing departments. Although this may not have been the intent in drafting the legislation, counties without purchasing departments should seek the advice of their prosecuting attorney in assessing the eligibility of using unit price contracts until some further clarification is established or the State Auditor’s Office provides direction.

Now that I’ve addressed ESSB 5418, here is a continuation of the 2019 legislative review on bills that passed with some impact on procurement and contracting for local government.

ESB 5453: The Administration of Irrigation Districts

Section 2 of ESB 5453 has outcomes that pertain to contracting for Irrigation Districts.

First, districts will now be required to publish calls for contract work and/or related materials on their website unless excused by other provisions of RCW 87.03.435 or in RCW 87.03.436. If a district does not maintain a website, this requirement must be satisfied by posting on the website of the county in which the irrigation district is located.

Next, in situations where a district has rejected all bids following a formal sealed-bid solicitation, the district is authorized to use the small works roster process to rebid; or if no bid was received, the district may readvertise and make a second call, or may solicit electronic or written quotes from a minimum of three contractors. It must then award to the lowest responsible bidder. The district’s obligations under these circumstances is:

• to make quotes available for public inspection following award,
• to attempt equitable distribution of such opportunities, and
• to maintain a list of contractors contacted and contracts awarded during the previous 24 months.

None of the new authorizations for irrigation districts call out an increase to the small works roster threshold as provided in RCW 87.03.436. This statute specifically authorizes use of the roster at $300,000 or less. As a result, we believe Irrigation Districts must continue to use the $300,000 threshold for these projects. The authorizing statute, however, does not specifically state any threshold for use of the limited public works procedures within the small works roster as defined in RCW 39.04.155. Consequently, the increase of the limited public works process to $50,000 appears to be applicable to irrigation districts.

ESB 5958: Public Works Contracts and Interlocal Agreements

There was a subtle rewording of language in ESB 5958 that impacts RCW 39.34.030 and how agencies approach piggybacking.

The intent is to allow Washington public agencies greater access to other public agency contracts, regardless of the actual procurement method used by the originating agency if certain elements of due diligence are still met.

MRSC has been in contact with the State Auditor’s Office (SAO) for advice that Washington local government agencies may rely upon in exercising these expanded opportunities. SAO is in the process of completing their guidelines, which will soon be available on their website and announced through the Digital Audit Connection. MRSC will update our topic page on piggybacking and provide further information once this guidance is released.

ESSB 5035: Prevailing Wage Enforcement

Most of ESSB 5035 pertains to activities between Labor & Industries (L&I) and contractors, and the bill provides greater clarification to matters such as violations, related procedures, and definition of terms.

Local government should be aware that the time period for a contractor to file a complaint concerning the nonpayment of prevailing wage has changed from 30 days to 60 days from the acceptance date of the public works project (RCW 39.12.065).

Also, a new section is added to RCW Chapter 39.12 that requires contractors file certified payroll records for any public works/prevailing wage projects with L&I starting January 1, 2020. L&I has indicated there is no oversight or verification required by local government agencies in this process. All records are to be sent directly to L&I. This new law will apply to work that is already underway as of the effective date, even if the requirement was not included in contract documents. It is recommended that contract documents begin to include notice of this upcoming change, although it is not specifically required.

SSB 5017: Responsible Bidder Criteria

MRSC reviewed SSB 5017 upon notice that it had an impact to RCW 39.04.350.

Section 15 of the bill changed the statute that is to be followed for format of sworn statements. In the responsible bidder criteria that became effective July 23, 2017, a bidder is required to certify that it has not willfully violated chapters 49.46, 49.48, and 49.52 RCW in three years prior to the bid solicitation date. These RCW Chapters include state minimum wage provisions, wage payment requirements, and wage withholding requirements.

MRSC developed a sworn statement for use in this verification process in 2017 when it first became a requirement. Following the revision to the format of the sworn statement mandated in ESB 5017, MRSC has updated the Certification of Compliance with Wage Payment Statutes to reflect the new format requirements. Public agencies using this method of verification should begin using the new format.

Some agencies use a statement on their bid proposal form in place of a specific form for this required verification. In such instances, a revised format such as the following is recommended.

The final article in the series on legislative updates (Part 3) will cover SHB 1295. This bill has additions and revisions to design-build procedures and job order contracting.

“When we work together, we do our best.”