HOUSE OF REPRESENTATIVES

                      Olympia, Washington

Bill Analysis      Bill No.  HB 1438

Bidding on public contracts.

Brief Title                              Hearing Date: 2/24/99

Reps. Miloscia, Campbell                 Staff:  Scott MacColl

Sponsor(s)                          State Government Committee

                                              Phone:  786-7106

BACKGROUND:

General contractors who bid on public works contracts in excess of $100,000 are required to submit as part of the bid, or within one hour after the published bid submittal time, the names of all subcontractors whose subcontract amount is more than 10 percent of the contract price.  Failure to list these subcontractors in the manner prescribed by statute renders the bid void.

These contracts are specifically designated for the construction, alteration, or repair of any public building or public work of the state or a state agency or municipality, institute of higher education, or a school district.

SUMMARY:

General contractors are required to name each subcontractor whose subcontract amount is more than 10 percent of the bid price on the submitted bid.  Failure to name each subcontractor, or naming two or more subcontractors for the same work will render the bid void.  Bidders (general contractors) whose bids are accepted are expressly prohibited from substituting another subcontractor who is named as part of the original bid. 

Specific exemptions to this rule are defined as 1) The awarding authority objects to the subcontractor and requests a change in the subcontractor; or 2) The substitution is approved by the awarding authority, and any of the following specific examples are met:

a) The subcontractor, after a reasonable time period, fails or refuses to execute a written contract with the bidder when such subcontract was offered to the subcontractor with the same terms that all other subcontractors on the project were offered;

     b) The subcontractor files for bankruptcy or becomes insolvent;

c) The subcontractor fails or refuses to perform its subcontract within a reasonable time;

d) the subcontractor fails, refuses, or is unable to furnish a performance bond and payment bond where the named subcontractor agreed in writing to furnish a performance bond before being named by the bidder in the submitted bid;

e) When the bidder demonstrates to the awarding agency that the name of the subcontractor was listed as a result of good faith, by inadvertent clerical error;

     f) When the subcontractor is not registered or licenses with the state; and

g) When the bidder determines that the work performed by the subcontractor is substantially unsatisfactory and not in substantial accordance with the contract documents, or that the subcontractor is substantially delaying or disrupting the progress of the work.

Substitutions of named subcontractors for any other reasons are prohibited.  Any bidder who violates the section is liable to the named subcontractor in the amount of 10 percent of the substituted contractor=s bid price or subcontract price.  Enforcement of this section will be brought through legal action in the superior court of the county where the work is to be performed.  The prevailing party is entitled to recover reasonable attorneys= fees, costs, and disbursements.

FISCAL NOTE:  Not requested.

EFFECTIVE DATE:  Ninety days after adjournment of session in which bill is passed.