2026 Legislative Session Outcomes for Local Government Procurement

The 2026 legislative session included bills addressing updates to the small works roster, prevailing wages, independent contractors, and energy projects. This blog summarizes three bills that will broadly impact local government procurement.

HB 2420: Increases to Small Works Roster Limits

As provided in RCW 39.04.151-.152, local and state governments may establish a small works roster and use the small works roster process to award public works contracts to contractors registered on the roster. Currently a small works roster can be used for individual public works projects estimated to cost $350,000 or less, excluding sales tax.

Effective June 11, 2026, HB 2420 amends RCW 39.04.152 to update the estimated project cost when a small works roster can be utilized, and it phases in these changes over a four-year period, as shown in the table below.

All project estimates in the phases exclude sales tax. While this bill did not change the direct contracting limit of $150,000, it did change the estimated project cost at which a small works roster can be utilized beginning January 1, 2027.

MRSC's Small Works Roster Manual will be updated to reflect each phase of this bill.

SB 6302: Independent Contractor Misclassification on Public Works Projects

State law requires that prevailing wages must be paid to laborers, workers, and mechanics for local government public works and maintenance contracts. However, prevailing wages are not required when a worker is an "independent contractor."

RCW 39.12.100 includes the criteria a worker must meet to qualify as an independent contractor. For example, an independent contractor is a worker who enters into a contractual agreement with a business to provide specific services on a project or as-needed basis.

Since an independent contractor working on a public works project is not considered a laborer, worker, or mechanic, they are exempt from prevailing wage requirements. While SB 6302 will not change this fact, it does address the potential for workers to be misidentified as independent contractors and gives the Washington State Department of Labor and Industries (L&I) the authority to investigate any claims of misidentification.

Effective June 11, 2026, SB 6302 adds a new section in Chapter 39.12 RCW, which is summarized as follows:

if a contractor or subcontractor engages three or more independent contractors … to perform the same type of covered finishing work at the same time on a public works project, the department of labor and industries, upon referral for an investigation, must investigate to determine whether the individuals performing the work have been misclassified

“Covered finishing work” in this new section is defined as work in drywall, flooring, tiling, painting, and glazier and glasswork.

If an L&I investigation finds that any individual performing covered finishing work has been misclassified as an independent contractor, the contractor or subcontractor that engaged the individual is subject to all applicable requirements, liabilities, and penalties under prevailing wages laws.

Under this bill, a local government awarding the public works contract may refer a potential worker misclassification concern to L&I, along with any contractor or subcontractor on the project, any labor organization that represents individuals performing covered finishing work on the project, or individuals performing covered finishing work on the project.

For more information on independent contractors and the concern for misclassification, see L&I's Underground Economy in Construction Task Force report (2025).

SB 6076: Utility Procurement Requirements for Energy Projects

SB 6076 contains updates to statutory requirements for public utility districts (PUDs) for procurement of energy generation, storage, transmission, and it adds new competitive bidding exemptions for municipalities in RCW 39.04.280.

Updates impacting public utility districts

The changes outlined below are effective June 11, 2026.

The bill amends RCW 54.04.070 to create a separate category of work for electric generation facilities fueled by non-emitting or renewable resources, energy storage, or transmission or distribution projects (PUD energy projects). This category applies through January 1, 2045.

Within this new category of work, the following rules apply:

• If the estimated project cost is in excess of $500,000 (exclusive of tax), the work must be arranged by contract.
• A PUD's own regularly employed personnel may perform work described in this separate category under prudent utility management, which means performing work with regularly employed personnel utilizing material of a worth not exceeding $1,000,000 in value without a contract.

The bill also amends RCW 54.04.080 and provides PUDs with the ability to:

• Authorize a purchasing department to receive hard copy or electronic bids.
• Include “responsive” with lowest responsible bidder.
• Increase the amount in excess of the estimated cost of materials or work that a contract may be awarded from 15 to 25%.

A new section is added to Chapter 54.04 RCW for the new category of PUD energy project contracts to purchase any item or items of the same kind of materials, equipment, or supplies in the amount of $50,000 or more but less than $250,000 per calendar month, exclusive of sales tax. Within this new category a PUD may:

• Use the vendor list process in RCW 39.04.190, and
• Waive the deposit or bid bond in securing bid quotations when using the vendor list process.

New competitive bidding exemptions in RCW 39.04.280

Effective June 11, 2026, and through January 1, 2045, RCW 39.04.280 is amended to add the following instance in which competitive bidding requirements may be waived:

• Purchases involving projects that are common facilities as described in RCW 54.44.020.
• Purchases relating to energy generation, storage, transmission, or distribution facilities if the agency’s governing body determines that the expedited procurement action is for proprietary or specialized technologies with no comparable alternatives, is necessary to ensure compliance with electrical reliability standards, or prevent threats to grid reliability.

MRSC’s Competitive Bidding Exemptions webpage will be updated to reflect the changes to RCW 39.04.280.

Resources

For additional details related to the bills covered in this blog, this is a summary of statutes and reference materials:

• HB 2420
  • RCW 39.04.152 (small works roster thresholds)
  • MRSC Small Works Roster Manual
• SB 6302
  • Chapter 39.12 RCWand RCW 39.12.100 (independent contractor misclassification and prevailing wage requirements)
  • Underground Economy in Construction Task Force report from L&I
• SB 6076
  • RCW 54.04.070, RCW 54.04.080, and RCW 54.44.020 (utility procurement)
  • RCW 39.04.190 (vendor roster)
  • RCW 39.04.280 (competitive bidding exemptions)
  • MRSC Competitive Bidding Exemptions