Electronic Signatures, Submissions, and Bids for Local Governments

Local agencies send and receive many documents requiring signatures. In recent years, state legislation has expanded the use of digital signatures for government agencies in Washington – particularly state agencies – but left the ability of local governments to send and receive electronic signatures somewhat unclear.

But that changed in 2016, thanks to SHB 2427. As of June 9, local governments have broader statutory authority to send and receive electronic signatures, bids, and other documents. Let’s take a look at what it all means.

What is an electronic signature?

Electronic signatures allow local agencies to send and accept documents that have been digitally verified, instead of a signed hard copy. The Secretary of State’s office has a good FAQ on electronic signatures.

Can local governments send and accept electronic signatures and submissions?

Yes. RCW 19.360.020, as amended by SHB 2427, now specifically allows local agencies to send and accept electronic submissions and electronic signatures, except as otherwise provided by law. To use electronic signatures and submissions, local agencies must establish a method and process for electronic submissions and the use of electronic signatures by ordinance, resolution, or policy.

Are local governments required to send or accept electronic signatures or submissions?

No. While SHB 2427 grants clearer authority to use digital signatures and submissions, your agency is not required to use them and should do so only if it is both willing and able.

What counts as a valid electronic signature?

According to RCW 19.360.030(2): “’Electronic signature’ means an electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”

Now, this gives agencies great leeway, and obviously an agency must establish some sort of standards and processes for what electronic signatures are acceptable. (A Clipart image of a duck, for instance, is probably not an acceptable signature!)

According to Kittitas County, which began signing documents digitally in 2010 (see Resolution 2010-093) and is an approved “certification authority”:

The authentication is based on an identity certificate. These certificates come in two forms: self-generated and issued by a certificate authority. Validating the signature will provide the identity and authority behind the certificate. Self-generated signatures are more akin to hand written signatures in that, in order to accept a hand written signature, you must trust the person is who they say they are and that they actually signed the document. A certificate authority requires the signer prove who they are before the digital signature is issued.

A valid digital signature issued by a certificate authority:

• Verifies the signer is who they represent themselves to be, because the signer has had to prove their identity to a certificate authority to obtain the digital signature
• Confirms the signature was applied to the document and not copied from another document because the signature file is cryptographically bound to the document
• Ensures the document was not altered after it was signed

Can local agencies accept electronic bids for purchases or public works contracts?

The short answer is, it depends:

• All counties may now accept bids for purchases “in either hard copy or electronic form as specified by the county” (RCW 36.32.245(2) as amended by SHB 2427).
• Counties over 400,000 population may also accept bids for public works contracts in “either hard copy or electronic form as specified by the county” (RCW 36.32.235(5) as amended by SHB 2427).
• Code cities and first class cities are authorized to allow for electronic submissions, including those related to submission of sealed electronic bids based on the broad grant of authority given to them by the constitution and statutes.
• For any other agencies, it depends on the degree of authority or autonomy in the agency’s statutes.

A larger question, perhaps, is what an entirely electronic bid would look like. Typically, a public works bid proposal might include the proposal itself, the bid security or bond (probably including the power of attorney), a non-collusion affidavit, a subcontractor list, a responsible bidder determination form, and a disadvantaged business enterprise utilization certification.

All of these documents require at least one signature, and the bid bond will probably require several signatures to be valid. All of the above items, then, could be submitted as PDF files with certified digital signatures, which can be done with existing technology (although it may be somewhat cumbersome for both the contractor and the agency).

Smaller purchases and contracts, including small public works roster projects, do not require sealed bids.

Can a local agency accept sealed electronic bids?

Under state law and/or your own local policies, larger purchases and contracts – for instance, all public works projects over $300,000 – usually require sealed bids.

The purpose of a sealed bid is to assure that no agency staff members can view the bids before the appointed time, so that no bidder can gain an unfair advantage over the others. With paper bids, bidders submit their materials in sealed envelopes which are stored in a secure location until the designated bid opening time, at which point the envelopes are opened in public.

But how do you accept sealed electronic bids? If the digital submittals are sent to someone within your agency, that person would, despite any safeguards, theoretically be able to open and view the bids before the appointed bid opening time.

Fortunately, there are several online third-party services that you can use – such as QuestCDN, E-Builder, and Seattle Daily Journal of Commerce, to name a few – to distribute electronic bid documents and securely store electronic bids. The documents remain inaccessible to agency staff until the designated time, at which point they can be opened in public similar to a paper bid.

Do you have any questions or comments about electronic signatures and documents? Are there other public works, purchasing, or bidding topics you’d like me to write about? Leave a comment below or contact me directly at jcarpita@mrsc.org.