Procurement Pointers: Creating a Policy That Leads to the Best Ending

Procurement requirements can be complicated, with different competitive bidding laws based on the government agency type, the type of procurement, and the estimated cost. It can be difficult to wade through existing requirements or stay updated on new ones.

In my first blog as MRSC’s Procurement & Contracting Consultant, I wrote that making decisions for procurement is much like the Choose Your Own Adventures books that I read as a kid. With these books, you consider which path along the way leads to outcomes that provide the best ending. Similarly, agencies need a playbook that can help staff navigate to the best ending for any local government procurement adventure, and in order to build this playbook, your agency should have a procurement policy.

If your agency doesn't have policies guiding procurement, or if you're looking to update these, here are some pointers I’ve summarized from the Procurement Policy Guidelines webpage and other MRSC resources. I’ll divide these tips up into sections based on the type of procurement.

All Procurement Types

Let’s start with pointers relevant for all procurement project types, including public works, materials/supplies, A&E, personal services, and purchased service contracts. All project procurement types should:

• Include a code of ethics in alignment with Chapter 42.23 RCW to provide expectations for agency employees who manage or participate in procurement activities. For more information, see our Ethics and Conflicts of Interest webpage.
• Reference RCW sections that contain procurement guidance specific to your agency. This includes bid limits, small works rosters and vendor lists, and formal competitive requirements. If there are no RCW limits stated for specific procurement types, then your agency can and should establish reasonable competitive thresholds and processes. To confirm what statutory legal requirements your agency may have for each project type, use our Find Your Contracting Requirements tool.
• Establish clear roles and responsibilities for all relevant agency staff, ranging from elected officials and department heads to field and office personnel, for whoever has the authority to take actions regarding procurement activities for each competition level and award of contracts.

Finally, an agency should document requirements for:

• Procurement using Minimal Competition: Competitive bidding is not required for purchases below an agency’s bid limits, and quotes can be sought directly from individual businesses. Policy should indicate these bid limits.
• Procurement using Informal Competition: ‘Smaller’ contracts can seek bids from eligible businesses on a small works roster or vendor list. Critically, agencies need to establish the dollar threshold identifying which contracts are eligible.
• Procurement using Formal Competition: Formal competition is required when other procurement methods are not available and generally applies to the largest, most complex projects. Policies for formal competition cover a broad notification/advertisement process.

Now, let’s review pointers relevant to specific procurement types, beginning with purchases of materials, equipment, or supplies not connected with a public work project.

Non-Public Works Purchases

To develop policies covering purchases of materials, equipment, or supplies not connected with a public works project, consider the following:

• For minimal competition, identify reasonable procedures for obtaining quotes from vendors (number of quotes, process, and documentation).
• If your agency is eligible and has adopted by resolution the informal competition vendor list process of RCW 39.04.190, re-state the statutory guidance and add any agency-specific internal procedures.
• For purchases above the minimal competition and/or vendor list limit, identify the formal competitive process for advertisement, sealed bids, public bid openings, protests, and other relevant details. For guidance, see MRSC's purchasing bid limit matrix and suggested formal competitive process for purchasing.

Public Works

Public works projects, as defined in RCW 39.04.010(5), can include a wide variety of work, from road construction to building remodeling to electric vehicle infrastructure charging installation at a municipally owned facility.  

Public works contracts of any size must clearly:

• State that prevailing wages will be paid when applicable, and that contracts can only be awarded to responsible bidders in accordance with RCW 39.04.350;
• Identify sales tax and retainage and bonding requirements that may apply; and
• Name the agency as additional insured under the contractor’s policies for insurance and associated certificates.

Additionally, when developing policies covering public works projects, consider the following:

• For minimal competition, identify reasonable procedures for obtaining quotes from contractors (number of quotes, process, and documentation).
• If your agency has adopted use of the informal competitive small works roster process in RCW 39.04.151 – 152, re-state the statutory guidance and add any nuances that are specific to your agency’s internal procedures or roster provider.

Professional Architecture and Engineering (A&E) Services

Unlike other types of contracts that are awarded partially or entirely on cost, A&E contracts are awarded primarily based on qualifications, a process known as "qualifications-based selection" (QBS).

Under the QBS process, the agency assesses the expertise of competing firms, selects the most highly qualified firm, then negotiates the final project scope, schedule, and budget. If the agency and the most highly qualified firm cannot reach an agreement, the agency then negotiates with the next most highly qualified firm.

Agency policies addressing A&E contracting should:

• Indicate that the agency is using a QBS process following the uniform requirements of chapter 39.80 RCW, and
• Note that advance notification of the need for A&E services will be provided through a legal advertisement (that describes the scope and nature of the project/work) or through a solicitation to a consultant roster in accordance with RCW 39.80.030.

Policies addressing A&E contracting should also establish procedures for minimal, informal, and formal competition based on the estimated contract price, type of project, and project complexity. For assistance, see our suggested procedures and dollar limit thresholds available in Table B – Soliciting for Professional Architecture & Engineering Services from our 2024 publication, Contracting for Services.

Personal Services

Except for port districts (chapter 53.19 RCW) and public facility districts (RCW 35.57.070 or RCW 36.100.180), local government agencies in Washington have no statutory restrictions on contracting for personal services and have great flexibility in setting their own policies and procedures. (For port districts, see our Personal Services Contracting Manual for Ports.)

Nonetheless, an agency should establish procedures for minimal, informal, and formal competition, selecting a service provider based on the estimated contract price and the complexity and type of project or work to be accomplished. For assistance, see our suggested competitive procedures and dollar limit thresholds available in Table C – Soliciting for Personal Services from Contracting for Services.

Purchased Services Contracts

As with personal services, Washington local governments have no statutory restrictions on contracting for purchased services and can use flexibility in setting their own policies and procedures. An agency should include policies and procedures that:

• Recommend differing levels of effort and procedure in selecting a service provider based on the estimated contract price and the complexity and type of project or work to be accomplished, and
• Note that prevailing wages may be required for certain types of purchased services (e.g.,  maintenance).

Agencies should also establish procedures for minimal, informal, and formal competition and should select a service provider based on the estimated contract price, type of project, and project complexity. For assistance, see our suggested competitive procedures and dollar limit thresholds in Table D - Soliciting for Purchased Services in Contracting for Services.

Last, let’s cover some pointers specific to times that your agency may be exempt from competitive bidding.

Competitive Bidding Exemptions

Under Washington state law, local governments often must use a competitive bidding or competitive solicitation process to award contracts. In some cases, competitive bidding may be waived—but agency policies should speak to this. Specifically, agency policy should:

• Identify the process that will be followed for each exemption in RCW 39.04.280, which provides uniform exemptions for purchases and public works projects. See the Uniform Exemptions for Public Works and Purchases section of our Competitive Bidding Exemptions webpage.
• Reference RCW 39.30.045, which allows any municipality, as defined in RCW 39.04.010, to purchase any supplies, equipment, or materials at auctions conducted by the federal government, any state agency, any municipality or other government agency, or any private party without being subject to public bidding requirements—if the items can be obtained at a competitive price.
• If procuring items through auctions, an agency should outline a process (as recommended by MRSC) requiring preapproval of an upper limit by an agency administrator or administrative body (e.g., mayor, council, commission) for the person doing the bidding. See the Auctions section of Competitive Bidding Exemptions.
• Outline an internal approval process (as authorized under RCW 39.34.030) for intergovernmental procurement and "piggybacking" on local, cooperative, and state contracts under RCW 39.26.050, as well as purchases through the federal government under RCW 39.32.090. For reference, see our Intergovernmental Procurement and 'Piggybacking' webpage.

Conclusion and Resources

Having a playbook in the form of a procurement policy can inform the outcome of the plot, supporting a good ending for every procurement adventure agency-wide, providing consistent guidance for compliance with organizational and legal expectations for each procurement project type.

For further insights and sample procurement policies from a number of agencies on this issue, check out our Examples of Local Procurement Policies section of our Procurement Policy Guidelines webpage.

MRSC would also like to receive additional examples for our Sample Document Library and Procurement Policy Guidelines webpage to help spark ideas for other agencies looking to develop a policy as a playbook for navigating their Choose Your Own Procurement Adventure. If your agency is willing to share your updated procurement policy, please email this information to Gabrielle Nicas, our Information Specialist/Librarian.

Happy procurement month!