Small Works Roster Manual for Local Governments

SUBJECTS › PUBLIC WORKS › Small Works Roster Manual for Local Governments

Updated 08/01

MRSC Rosters: Shared Small Works / Consultant Rosters

Acknowledgments
Introduction and Scope
Exemptions
Services
Equipment, Materials and Supplies
Public Works Contracts
Small Public Works Contracts
Small Works Roster
Competitively Bid Public Works Contracts
Sample Documents, City/County Codes, and Models

Acknowledgments

John Carpita, Public Works Consultant, is the primary author of this Web page.
Paul Sullivan, Legal Consultant, provided content and legal review.

Introduction and Scope

ESSB 6347, codified at Chapter 138, Laws of 2000, changed small works roster provisions for awarding public works contracts. The upper limit for use of the small works roster has increased to $200,000 and a uniform small works roster process is established for all units of state government and the following units of local government:

counties, cities, towns, community and technical colleges, county roads, fire protection districts, higher education, housing authorities, port districts, public hospital districts, public utility districts, school districts and water-sewer districts.

The small works roster is a process through which there is competition following notification to some or all public works contractors who have requested placement on a roster kept by the local government agency. This differs from competitive bids in which there is competition following advertisement in designated legal newspapers and other media that is open to all public works contractors. Price is the primary basis for consideration and contract award in either instance.

The Legislature directed the Department of Community, Trade, and Economic Development (CTED) and the Municipal Research Council to prepare and distribute a small works roster manual. MRSC is carrying out the Council's responsibility. This Web document is the first draft of such a manual and is intended to present basic steps needed to implement a small works roster program for all units of local government. In addition, it attempts to summarize purchasing and bidding statutes for local government in order to show the context of the small works roster process.

ESB 5063, codified at Chapter 284, Laws of 2001 allows authorized local governments to use a 'limited public works projects,' process for contracts with an estimated cost of less than $35,000. A local government may waive the payment and performance bond requirements of chapter 39.08 RCW and the retainage requirements of chapter 60.28 RCW. They assume liability for the contractor's nonpayment of laborers, mechanics, subcontractors, materialmen, suppliers, and taxes imposed under Title 82 RCW that may be due from the contractor. However the local government has the right of recovery against the contractor for any payments made on the contractor's behalf.

An almost identical paper version of this document was published and distributed in 2000. Sample documents found in Sample Documents, City/County Codes, and Models are primarily from cities and counties and predate passage of ESSB 6347. Sample documents from all types of local governments are needed and will be posted on the Web site and incorporated into subsequent editions of the printed manual. Please send them to the MRSC Library.

Purchasing and Bidding

Units of local government in Washington must accomplish projects and purchase goods and services in the course of doing business. Statutes governing purchasing are intended to insure that quality projects, goods and services are purchased at the least cost. Other goals are to reduce, if not eliminate, the impact of favoritism and cronyism in purchasing and to prevent fraud. Competitive bidding, which requires open advertisement to all qualified bidders and public opening of bids, has been determined by the legislature to be the best way to accomplish these goals.

All units of local government may use competitive bidding for purchasing everything from paper clips to multi-million dollar bridges and any kind of material, supplies or equipment. Unfortunately, following competitive bid laws is often counterproductive for small projects and material, supplies or equipment purchases and can be more expensive and time consuming. Recognizing this problem, the state legislature has, over the years, established and modified dollar amounts (commonly referred to as bid limits) below which competitive bids are not required for public works projects and equipment or supply purchases and has provided exemptions and alternatives to the competitive bidding process.

The original Web and paper documents referenced purchasing flow charts for cities, towns and counties, a matrix showing bid limits and other public works project cost parameters and local government purchasing matrices (LGPMs) for other units of local government and the university system. These all have been replaced by a single Local Government Purchasing Matrix (147 KB).

Descriptions and definitions of key purchasing and bidding terms used in this Web document are as follows:

Bid Limits (BL) - Dollar amounts below which competitive bids or the small works roster process are not required for the purchase of equipment, supplies or materials or for public works projects.

Competitive Bids (CB) - A process through which there is competition following advertisement in designated legal newspapers and other media for equipment, supply, material and public works contracts, open to all suppliers, vendors, and contractors, and in which price is the primary basis for consideration and contract award.

Small Works Roster (SWR) - A process through which there is competition following notification to some or all public works contractors who have requested placement on a roster kept by the local government agency, in which price is the primary basis for consideration and contract award.

Small Public Works Contracts (SPWC) - A process through which written or electronic quotes are solicited from contractors for public works contracts with total estimated costs below the bid limits following notification as established by local agency policies, if any, and in which price is the primary basis for consideration and contract award.

Quotes (Q) - A process through which written or electronic quotes are solicited from suppliers and vendors for equipment, supply and material contracts with total estimated costs below the bid limits following notification as established by local agency policies, if any, and in which price is the primary basis for consideration and contract award.

Competitive Negotiations (CN) - A process through which there is competition following advertisements in designated legal newspapers and other media for equipment, supply, material and public works contracts, open to suppliers, vendors and contractors, in which factors other than price may be the primary basis for consideration and contract award.

Vendor Lists (VL) - A process in which there is competition for equipment and supply contracts through notification to some or all suppliers and vendors who have requested placement on a roster kept by the local government agency in which price is the primary basis for consideration and contract award.

Public Agency Work or Day Labor Limits - Limits set by the Legislature on the amount of public works that can be accomplished using the agency's own work force or by hiring day laborers. (Note: Day labor as used in the County road fund statutes refers specifically to the County's own forces.) Limits are expressed as specific dollar amounts for single or multiple craft projects and/or as percentages of the public works or road fund budgets.

Exemptions

In the 1998 legislative session a new section, RCW 39.04.280, was added to Ch. 39.04 RCW which consolidates and provides uniform exemptions to municipal competitive bidding requirements when awarding contracts for public works and purchases. Competitive bidding procedures may now be waived by resolution of the governing body of the municipality for:

purchases that are clearly and legitimately limited to a single source of supply;
purchases involving special facilities or market conditions;
purchases in the event of an emergency;
purchases of insurance or bonds; and
public works contracts in the event of an emergency.

Competitive bidding procedures may be waived under the above circumstances by adopting either a resolution at the time of contracting or by written policies before hand. A resolution must state the factual basis for the exception. If written policies are used to waive competitive bidding requirements, the contract and the factual basis for the exception must be recorded and open to public inspection immediately after the contract is awarded.

An emergency is defined, uniformly for all classes and types of municipalities, as unforeseen circumstances beyond the control of the municipality that either: (1) present a real, immediate threat to the proper performance of essential functions; or (2) will likely result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken.

This new section is intended to supplement and not to limit the current powers of any municipality to provide exemptions from competitive bidding requirements. Note that statutes governing a specific type of municipality may also include other exemptions from competitive bidding requirements.

RCW 39.30.045 allows local governments to purchase any supplies, equipment, or materials at auctions conducted by the government of the United States or any agency thereof, any agency of the state of Washington, 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. The governing body should either pre-authorize the purchase or pass a resolution sanctioning it at the next legislative board meeting.

Services

Services are activities requiring labor, equipment, supplies and materials for which an agency contracts, on a periodic, routine basis. Examples include:

customized accounting software and ongoing support services, as opposed to purchase of an "off-the-shelf" program with minimal support
cemetery, landscaping, building and grounds maintenance contracts
utility billing services
yearly contracts for snow and ice removal
garbage collection and disposal
maintenance contracts for office equipment, including computers
official newspaper

Washington cities or towns are not required to seek competitive bids for any services, except towns, second class cities and code cities with a population under 20,000 who must call annually for bids to select a city's official newspaper. Counties are not required to seek bids for any services, except annually for bids to select a county's official newspaper. Other agencies are generally not required to seek bids for services. However, the agency's attorney should be consulted if there is a question about bidding for specific services.

Contracts for professional architectural and engineering services require an advertising and negotiation process in accordance with Ch. 39.80 RCW. See Design Using Consultants in the Washington State Model Design and Construction Management Manual.

Equipment, Materials and Supplies

Many purchases made by agencies are not connected to a public works project. Items in this category include supplies, materials and equipment that are for general government purposes or will not be used to accomplish a specific public works project. Office supplies and equipment are obvious examples as are vehicle and specialty equipment purchases by agency departments. Other, not so obvious examples are:

Acquisition of a telephone system that requires installation of cable, conduits, and other devices may fall within the definition of a public work. If, however, the acquisition were merely of hardware, such as telephones, it would probably be considered an equipment purchase.
Purchase of a number of parking meter heads, which will be stockpiled in a warehouse and used over a period of time to replace defective heads, would be an equipment purchase. However, if the heads are being purchased in connection with a specific project and will be installed within a short period of time, it probably is a public work. Similarly, stockpiling traffic signal heads, poles, wire, etc., for routine maintenance and repair would be an equipment purchase.

As the Local Government Purchasing Matrix illustrates (147 KB), all local governments can use the 'vendor list' procedure set out in RCW 39.04.190 for purchases of equipment, materials and supplies that are not to be used in connection with any public work or improvement. Second class cities, towns, and code cities with a population under 20,000 and all counties must call for bids costing more than $7,500 (cities) or $2,500 (counties). However, advertisement and formal sealed bidding may be dispensed with for purchases between $7,500 and $15,000 (cities) or between $2,500 and $25,000 (counties), if the governing body authorizes, by resolution, use of this vendor list procedure. Similar limits for other municipalities are shown in the purchasing matrix. Cost estimates must include applicable sales and use taxes.

Many agencies include vendor list and small works roster procedures in the same resolution or ordinance.

A vendor list may be used to secure telephone or written quotations under certain conditions, as follows:

The agency must advertise at least twice a year in a newspaper of general circulation that a vendor list (or lists, if they want to keep different vendor lists for different products) exists and it must solicit names for the list.
If possible, at least three quotations should be secured to ensure a competitive process, with the contract being awarded to the lowest responsible bidder.
Immediately after the award, all bid quotations that the agency obtained must be recorded and made open to public inspection. This information must also be available to those who inquire by telephone.
At least every two months, an agency using vendor lists must post a list of contracts awarded. The list must contain the name of the vendor, the amount of the contract, a brief description of items purchased, and the date of the award.

RCW 39.04.270 authorizes local governments to use a "competitive negotiation" process as an alternative to the competitive bid process when purchasing telecommunications and data processing (computer) equipment or software. This alternative process requires, at a minimum, the following steps:

A request for proposals (RFP) must be published in a newspaper of general circulation at least 13 days before the last date on which the proposals will be received.
The RFP must be submitted to an adequate number of qualified sources, as determined by the agency in its discretion, to permit reasonable competition consistent with the requirements of the procurement.
The RFP must identify significant evaluation factors, including price, and their relative importance.
The agency must provide reasonable procedures for technical evaluation of the proposals, identification of qualified sources, and the selection process for awarding the contract.
The award must be made to the qualified bidder whose proposal is "most advantageous" to the agency and the agency may reject all proposals for good cause and request new proposals.

Public Works Contracts

"Public Work" or "Ordinary Maintenance"?

If the cost of the project exceeds a certain amount, a local government must go out for bid on public works projects. RCW 39.04.010 defines the term "public work" as follows:

The term public work shall include all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality, or which is by law a lien or charge on any property therein. (Emphasis added.)

Note that this definition of public work includes construction and repair but excludes ordinary maintenance. But what is "ordinary maintenance"? The statutes provide no definition. However, WAC 296-127-010(7)(b)(iii), which defines "ordinary maintenance" in the context of prevailing wages, can be used to craft a definition that distinguishes ordinary maintenance from a public work for bidding purposes:

[Ordinary maintenance is] defined as work not performed by contract and that is performed on a regularly scheduled basis (e.g., daily, weekly, monthly, seasonally, semiannually, but not less frequently than once per year), to service, check, or replace items that are not broken; or work not performed by contract that is not regularly scheduled but is required to maintain the asset so that repair does not become necessary. (Emphasis supplied.)

For example, replacing a deteriorating bridge or roof would amount to a repair, or perhaps new construction, but not maintenance. Such a project would be considered to be a public work. On the other hand, using existing city employees to rod or clean a sewer or clean a roof would involve maintenance and, therefore, would not be a public work. Consequently, this expenditure would not be subject to the public works bid statutes. However, if instead of using city employees to perform the work, the city contracts out for the repair, the repair work is likely deemed a public work, both for bidding and for prevailing wage purposes.

Other examples:

Although often part of an agency's ongoing maintenance program, sidewalk replacement is not ordinary maintenance because it is not done annually. The asset is being replaced, rather than "maintained."
Replacement of carpeting is not ordinary maintenance. Because carpeting is neither replaced annually nor used to maintain the asset, in this case the subflooring, it does not fall into the ordinary maintenance category.
Although tree trimming may not take place annually it is considered ordinary maintenance because it is necessary to prevent branches from interfering with wires and to prevent damage during windstorms.

Small Public Works Contracts

Public works projects for which estimated costs, including applicable sales and use taxes, fall below established bid limits can be accomplished in the following ways, subject to individual agency purchasing policies:

by use of agency crews (day labor in county road fund statutes)
by use of day labor (force account)
by interlocal agreement with another agency
by contract with private contractor

Use of city or county crews and/or day labor is further subject to annual dollar limitations and/or percentages of the annual public works or road fund budgets as noted on the flow charts, including work performed by another agency under an interlocal agreement. There seem to be no corresponding restrictions for other local governments, but the agency's attorney should be consulted.

Small public works contracts are disproportionately difficult to administer in relation to their costs. Large contractors, who routinely bid construction contracts and are familiar with the paperwork involved, do not like to do small projects. Many agencies find it hard to find smaller contractors who are familiar with prevailing wage requirements, retainage, sales and use tax issues, insurance certifications, bonding, etc. Project managers find themselves cajoling contractors into bidding and then coaching them on proper procedures.

Another problem with small contracts is that of balancing paperwork and protection. Very few contractors have the time and energy to wade through a massive set of contract documents for a $2,500 remodeling project. On the other hand, a handshake or simple one page contract may not provide sufficient protection for an agency from third party claims, accidents or failure to pay prevailing wages and sales taxes. If a larger project with similar work items is underway, one possible solution is to incorporate small public works projects into that contract using a change order.

Procedures for written quotes and subsequent contracts for small public works contracts vary considerably from agency to agency. Some use purchase orders for these contracts, with varying levels of approval authority based on the type and cost of the proposed purchase. Included in the Sample Documents, City/County Codes, and Models are sample RFQs (requests for quotes), COs (change orders) and POs (purchase orders) that agencies have used. Also included is a brave attempt at a set of model documents that incorporate an RFQ, the quote itself, contract documents and award into one package, suitable for electronic solicitation.