Washington State

House of Representatives

Office of Program Research



State Government & Tribal Relations Committee

HB 1521

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Providing for accountability and transparency in government contracting.

Sponsors: Representatives Dolan, Harris, Valdez, Frame, Caldier, MacEwen, Griffey, Blake, Sells, Tarleton, Fitzgibbon, Ryu, Kilduff and Ormsby.

Brief Summary of Bill

  • Clarifies that departments, agencies, and institutions of higher education are authorized to contract out for services, including services that, since July 1, 2005, have been customarily and historically performed by classified employees.

  • Creates additional criteria for contracting out, including a comprehensive impact assessment, maintenance of certain records, and additional terms in agreements to contract out.

  • Modifies uniform policies and procedures on contract management, including contract termination, minority- and women-owned business participation, performance monitoring, and cost recovery.

Hearing Date: 1/29/19

Staff: Desiree Omli (786-7105).


Contracting Out.

Prior to July 1, 2005, state agencies and institutions of higher education were prohibited from contracting out for services regularly and historically provided by classified employees. Employees in classified services include state employees not specifically exempt from the state civil service statute. Beginning July 1, 2005, the Personnel System Reform Act of 2002 lifted the prohibition and authorized state agencies and institutions of higher education to purchase services, including services traditionally and historically provided by state employees in classified service, if the following criteria are met:

Certain entities and contracts are exempt from these criteria, such as contracts for services expressly mandated by the Legislature, printing services, and certain contracts by the Department of Enterprise Services (DES) and Consolidated Technology Services Agency.

Contract Management Policies and Procedures.

The DES must adopt policies and procedures for effective and efficient management of contracts by state agencies. These include procedures for selecting potential contractors based on their qualifications, performance measures, model contract terms to ensure contract performance and compliance with state and federal standards, executing contracts using electronic signatures, and procedures and criteria for terminating contracts. Agencies must provide, on an annual basis, a list of contracts that the agency has entered into or renewed.

The DES must maintain a list of all contracts entered into by agencies. Agencies are encouraged to enter into performance-based contracts that identify expected deliverables and performance measures or outcomes. Payment for goods and services under performance-based contracts should be contingent on the customer achieving performance outcomes.

To provide the maximum practicable opportunity for increased participation by minority- and women-owned and controlled businesses in public works and agency procurement, goals are established in statute for each state agency. If necessary to meet these goals, contracts may be awarded to the next lowest responsible bidder, or all bids may be rejected and new bids obtained, if the lowest responsible bidder does not meet the goals established for a particular contract.

Summary of Bill:

Contracting Out.

The contracting out provisions specify that any department, agency, or institution of higher education may contract out for services that, since July 1, 2005, have been customarily and historically provided by employees in the classified service.

A department, agency, or institution of higher education may contract for services if the following additional criteria are met:

Departments, agencies, or institutions of higher education must also:

Previously exempt contracts relating to the DES's activities are now subject to the contracting out requirements.

The following contracts are exempt from the additional criteria for contracting out, as well as the requirements above relating to posting information on the website, record maintenance, and including specified terms in contracts for service:

The following contracts are exempt from all contracting out requirements:

The new provisions under the bill only apply prospectively and do not impact contracts in effect prior to the enactment of the bill.

Contract Management Policies and Procedures.

The uniform policies and procedures for management of contracts are modified to include: precontract procedures to ensure compliance with minority- and women-owned business participation; model terms to facilitate recovery of the costs of employee staff time expended to achieve substantial compliance; and procedures and criteria for terminating contracts that are not achieving performance standards. Agencies must monitor performance-based contracts to ensure that all aspects are being properly performed and that performance standards are being achieved.

Appropriation: None.

Fiscal Note: Requested on January 27, 2019.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.