Washington State Legislative Updates

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Legislative Updates on Public Works Contracting

Mike PurdyMichael E. Purdy Associates, LLC

(206) 762-2699 (office)(206) 295-1464 (cell)

[email protected]

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Agenda

1. 2012 Legislative Session

2. 2011 Legislative Session Reciprocal Bid Preference

3. CPARB Alternative Public Works Reauthorization Committee

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2012 Legislative Session

Bills that passed– Job Order Contracting

– Prevailing Wages

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2012 Legislative Session- Job Order Contracting – Passed

Engrossed House Bill 2328

Unanimously passed both Senate and House

Signed by Governor on March 29, 2012

Effective on June 7, 2012– 90 days after March 8, 2012 adjournment

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2012 Legislative Session- Job Order Contracting – Existing

Existing Authorized AgenciesState Department of Enterprise Services (formerly GA)

University of Washington

Washington State University

Cities with population over 70,000

Counties with population over 450,000

Port Districts with revenues greater than $15 million per year

Public Utility Districts with revenues from energy sales greater than $23 million per year

All School Districts

State ferry system

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Authorized Agencies – Added by Legislature

Regional universities Western Washington University Central Washington University Eastern Washington University

The Evergreen State College

Sound Transit

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Amount of each Work Order

Existing Amount New Amount

$300,000 $350,000

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CPARB reporting year basis

Existing New

Contract Year July 1 – June 30

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2012 Legislative Session- Job Order Contracting – NOT Passed

Provisions that did NOT pass– Yearly Dollar Threshold: Would have raised from

$4 million per year to $6 million per year the total dollar amount of work orders an agency could execute

– Contract Term: Work orders executed within the contract term could have been completed after the end of the contract term

– Subcontracted Percentage: Amount of work to be subcontracted would have changed from 90% of the actual work in a Job Order Contract to 60% of the Job Order Contract total

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2012 Legislative Session- Job Order Contracting – NOT Passed

HB 2369 did NOT pass– Regional Transit Authorities: Would have

permitted all Regional Transit Authorities to use Job Order Contracting

Sound Transit – Will be the only authorized Regional Transit

Authority to use Job Order Contracting Engrossed House Bill 2328

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2012 Legislative Session- Prevailing Wages – Passed

Substitute Senate Bill 6421

Unanimously passed both Senate and House

Signed by Governor on March 29, 2012

Effective on June 7, 2012– 90 days after March 8, 2012 adjournment

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2012 Legislative Session- Prevailing Wages – Passed

Filing Affidavits of Wages Paid On Behalf of: Allows contractor to file the Affidavit

of Wages Paid on behalf of a subcontractor if subcontractor is out of business or fails to file

Lower Tier: Applies to subcontractors who contract with lower tier subcontractors

Timing: May not occur sooner than 31 days after Final Acceptance

Liability: Contractor filing Affidavit accepts responsibility for unpaid prevailing wages by subcontractor

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2012 Legislative Session- Bills That Did NOT Pass

Design-Build on WSDOT projects Second Substitute Senate Bill 5250 would have

required WSDOT to:– Threshold: Use Design-Build on projects

over $5 million, down from current $10 million

– Reporting: Report to legislature each biennium on the performance of Design-Build on its projects

Passed Senate 47-1. House didn’t vote

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Use of Design-Build HB 2327 would have:

– Portable Facilities: Permitted Design-Build for the erection of portable facilities as defined in WAC 392-343-018

– Modular Buildings: Restricted Design-Build modular buildings to “not more than five prefabricated modular buildings per installation site.”

Was sponsored by CPARB

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GC/CM and Design-Build Selection HB 2327 would also have added the

following selection criteria: Firm’s outreach plan to include small,

economically and socially disadvantage businesses

Firm’s past performance in the utilization of small, economically and socially disadvantaged businesses

Was sponsored by CPARB

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Protests on GC/CM Projects House Bill 1971 would have:

– Protest Process: Established protest process for selection of EC/CM and MC/CM At both short list and finalist stages

– Owner’s Role: Added Owner to review protests

Sponsored by CPARB. Introduced in 2011.

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No Retainage on Federal Projects Senate Bill 6063 would have:

– Prohibited withholding of retainage on federally funded transit facilities and relying on bond

Federal Regulations: Response to U.S. DOT regulations requiring prompt payment to subcontractors

2011 Legislation: Would have corrected 2011 amendment to RCW 60.28.011 only prohibiting retainage on federally funded highways, roads, streets.

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Small Businesses on Small Works Rosters Substitute House Bill 1173 would have: Limited Competition on Limited Public Works:

– Threshold increased from $1 to $7 million– Contractor annual gross revenue

Definitions: Micro-business and Mini-business– Revenue and location based– Owners to adopt “additional procedures to

encourage” use of these businesses on Small Works Roster projects

– “Principal office located in Washington” conflicts with RCW 39.04.380 for resident contractor: “physical office located in Washington”

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Streamlining Small Public Works Projects House Bill 1970 would have:

– Bonding and Retainage: Permitted agencies to waive bonding and retainage on projects of $5,000 or less, even if not using the Small Works Roster. Agencies would pick up liability for claims

– Prevailing Wage Forms: Increased from $2,500 to $5,000 when agencies could accept prevailing wage forms under Limited Public Works process without L&I certification

Sponsored by CPARB. Introduced in 2011

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Requiring Certified Payrolls Senate Bill 6416 would have required: Earlier Submission of Intents: Submission of

Statement of Intent to Pay Prevailing Wages before an Owner “finalizes a contract for any public work.”

Payrolls Before Payment: Submission of electronic payrolls from contractor and subcontractors before any payment to contractor.

Publish Payrolls: Owners to publish payrolls on a “publicly accessible database” after deleting Social Security numbers. Owners would also forward payrolls to L&I.

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Prevailing Wage Liability for Successor Firms House Bill 2669 would have required:

– Successor Firm Liability: Assumption of prevailing wage liability by a successor contracting entity for previous prevailing wage violations If successor entity knew of the violation at time

of sale Defines successor entity

Passed the House 54-41. No Senate vote

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2011 Legislative Session- Reciprocal Bid Preference

States with 5% public works bid preference: Alaska, Nevada, Wyoming, New Mexico

Effective March 30, 2012

If “a bid is received from a nonresident contractor from a state that provides a percentage bidding preference, a comparable percentage disadvantage must be applied to the bid of that nonresident contractor.”

RCW 39.04.380

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Definition of nonresident contractor:– From a state with a percentage bid

preference and– At the time of bidding, does not have a

physical office located in Washington State of residence for a nonresident

contract is the state in which the contractor was incorporated or the business entity was formed

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Bidder In-State

Out-of-State

Bid Amount

Preference % for state of out-of-state firm

Bid Price for Evaluation Purposes

1 X $100,000 5% $105,000

2 X $103,000 N/A $103,000

3 X $104,000 0% $104,000

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CPARB Alternative Public Works Reauthorization Committee

June 2013 Sunset: RCW 39.10 – Alternative Public Works

Committee: Meeting this year to address issues and develop legislation for CPARB and Legislature

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Job Order Contracting Issues:– Yearly dollar threshold increase– Contract term– Subcontracted percentage– Expansion of authorized agencies– Use JOC contracts through piggybacking

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GC/CM issues:– Owner role when GC/CM bids to self-perform– Prequalification by GC/CM when bidding to self-

perform– Flexibility regarding unsuccessful MACC

negotiations– When should subcontract bidding occur. Trend

toward more early bidding– Selection criteria relating to small businesses– Protest procedures for EC/CM and MC/CM– Subcontract bidding and union membership

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Design-Build issues:– More flexibility to provide for progressive Design-

Build– Smaller projects by certified agencies without

Project Review Committee approval– Modify criteria for when Design-Build may be

used– Selection criteria relating to small businesses– Portable facilities and modular buildings

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Michael E. Purdy Associates, LLC- Contact Information

Mike PurdyPrincipal

Office (206) 762-2699

Cell (206) 295-1464

E-mail [email protected]

Web www.mpurdy.com

Blog http://PublicContracting.blogspot.com

http://www.linkedin.com/in/mpurdy

http://twitter.com/#!/MikePurdy

https://www.facebook.com/pages/Michael-E-Purdy-Associates-LLC/92090808667

PO Box 46181, Seattle, WA 98146

3131

Experience: After more than 30 years as a manager in public contracting and procurement in Seattle, Mike Purdy retired in early February 2010. He began his career with the City of Seattle, where he was the City’s Contracting Manager. After more than 21 years with the City, he served for five years at the Seattle Housing Authority as Contracting and Procurement Manager. Most recently, he was the Contracts Manager for the University of Washington’s capital projects office, where he was responsible for managing design and construction contracts for more than $1 billion worth of projects.

Michael E. Purdy Associates, LLC: In his retirement, Mike remains active in contracting and legislative issues as the principal of Michael E. Purdy Associates, LLC (www.mpurdy.com), a consultant firm established in 2005 to help public agencies, contractors, and consultants develop and implement effective contracting strategies. He is a frequent speaker and trainer on public contracting issues. Mike also maintains the popular Public Contracting Blog at http://PublicContracting.blogspot.com, designed to keep public agencies, contractors, and consultants up-to-date on key developments in contracting. He is also a member of a number of industry wide committees and task forces.

Education: Mike has a bachelor’s degree in business and public administration and an MBA, both from the University of Puget Sound, and a master of divinity degree from Fuller Theological Seminary.

http://www.mpurdy.com/

http://publiccontracting.blogspot.com/

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Michael E. Purdy Associates, LLC- The Fine Print

1. Copyright: This document is copyrighted by Michael E. Purdy Associates, LLC. All rights reserved. No part of this document may be reproduced, modified, or transmitted in any form or by any means, electronic, mechanical or otherwise without prior written permission.

2. Not Legal Advice: The opinions, information, and interpretations provided in this document are the personal opinions of Mike Purdy, are for educational and informational purposes only, and do not represent legal advice. Mike Purdy is not an attorney. When appropriate, readers of this document are encouraged to consult with an attorney to obtain legal advice.

Washington State Legislative Updates

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