AN ACT Relating to contracting authority of joint operating agencies; adding new sections to chapter 43.52 RCW; creating a new section; repealing RCW 43.52.250, 43.52.260, 43.52.272, 43.52.490, 43.52.495, 43.52.500, 43.52.505, 43.52.510, 43.52.515, 43.52.600, 43.52.603, 43.52.606, 43.52.609, 43.52.612, 43.52.615, 43.52.618, and 43.52.621; prescribing penalties; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. Unless the context clearly requires otherwise, the following definitions apply throughout this chapter:

(1) "Board" means the board of directors of the joint operating agency unless the operating agency is constructing, operating, terminating, or decommissioning a nuclear power plant under a site certification agreement under chapter 80.50 RCW, in which case "board" means the executive board.

(2) "Board of directors" means the board established under RCW 43.52.370.

(3) "Canada" means Canada or any province thereof.

(4) "Chairman" means the chairman of the energy facility site evaluation council.

(5) "City" means any city or town in the state of Washington authorized to engage in the business of generating and/or distributing electricity.

(6) "District" means a public utility district as created under the laws of the state of Washington authorized to engage in the business of generating and/or distributing electricity.

(7) "Executive board" means the board established under RCW 43.52.374.

(8) "Managing director" means the person appointed by an executive board under RCW 43.52.374.

(9) "Operating agency" or "joint operating agency" means a municipal corporation created pursuant to RCW 43.52.360.

(10) "Public utility" means any person, firm or corporation, political subdivision or governmental subdivision including cities, towns and public utility districts engaged in or authorized to engage in the business of generating, transmitting or distributing electric energy.

(11) "Revenue bonds or warrants" means bonds, notes, bond anticipation notes, warrants, certificates of indebtedness, commercial paper, refunding or renewal obligations, payable from a special fund or revenues of the utility properties operated by the joint operating agency.

NEW SECTION. Sec. 2. (1) Except as provided otherwise in this chapter, a joint operating agency shall purchase any item or items of materials, equipment or supplies, the estimated cost of which is in excess of five thousand dollars exclusive of sales tax, or order work for construction of generating projects and associated facilities, the estimated cost of which is in excess of ten thousand dollars exclusive of sales tax, by contract in accordance with RCW 54.04.070 and 54.04.080, which require sealed bids for contracts.

(2) When a joint operating agency chooses to use one or more of the exceptions to sealed bid contracting specified in this chapter, the managing director shall certify to the senate and house committees on energy and utilities and the legislative budget committee in writing within thirty days after the contract is signed, that such contract is in the public interest, state the reason or reasons why, and indicate the estimated cost savings to the project compared to contracting for the same material, supplies, equipment or work through completion of work as contracted, including termination costs, or through sealed bids.

NEW SECTION. Sec. 3. (1) An operating agency shall adopt procedures under section 9 of this act which require the successful bidder or proposer on any contract over seventy-five thousand dollars to demonstrate to the operating agency before executing the contract that the bidder has:

(a) Adequate financial resources, the ability to secure these resources, or the capability to secure a one hundred percent payment and performance bond;

(b) The necessary experience, organization, and technical qualifications to perform the proposed contract;

(c) The ability to comply with the required performance schedule taking into consideration all of its existing business commitments;

(d) A satisfactory record of performance, integrity, judgment, and skills; and

(e) Be otherwise qualified and eligible to receive an award under applicable laws and regulations.

This subsection (1) shall not apply to contracts entered into under section 8 of this act.

(2) An operating agency shall adopt procedures under section 9 of this act to require the successful bidder or proposer on any contract over seventy-five thousand dollars to submit to the operating agency before executing any contract the following information: (a) The names of all shareholders owning more than ten percent of the stock of the corporation, or the names of all shareholders if less than twenty-five in number; (b) the names and addresses of all members of the board of directors, officers, and the person in charge of overseeing performance of the contract; (c) any record of criminal convictions related to fraud of those persons on the board of directors, officers, and the person in charge of overseeing performance of the contract; (d) a description of an antitrust compliance program; and (e) a description of an internal program designed to deter and detect employee theft, embezzlement, and participation of employees in bribery or kickback schemes: PROVIDED, That this information shall not be required for those contracts entered into under section 8 of this act.

(3) The operating agency shall refuse to execute any contract over seventy-five thousand dollars if the agency determines that the person, firm, or corporation does not meet the requirements set forth in subsections (1) and (2) of this section. Determinations shall be conclusive unless appealed to the superior court of the county where the operating agency is situated or Thurston county within fifteen days, which appeal shall be heard summarily within ten days after the appeal is made and on five days' notice thereof to the operating agency.

The prevailing party in such litigation shall be awarded its attorney fees and costs.

The operating agency shall not be required to make available for public inspection or copying under chapter 42.17 RCW information provided under this section.

(4) All contracts and subcontracts for more than seventy-five thousand dollars shall provide: (a) That all requests for compensation or claims shall be accompanied by a certificate signed by a responsible official of the contractor that the request or claim is accurate, complete, verifiable by the contractor's or subcontractor's records, and in compliance with the contract provisions and relevant provisions of law; and (b) that the operating agency and the state auditor may audit the records of the contractor or subcontractor to determine the accuracy of any claim or request and compliance with the contract provisions and relevant provisions of law.

(5) (a) An operating agency or the attorney general shall pursue recovery of any excessive amounts charged by contractors, through fraud or otherwise, by civil action or other effective collection means when in the opinion of the operating agency it is cost-effective to do so; (b) any contractor shall be liable to the operating agency for the administrative costs and reasonable attorney's fees incurred as a result of reviewing, determining, and seeking collection of any amounts by which a contractor request or claim for compensation is overstated. Any contractor shall also be liable to the operating agency for the actual damages sustained and a court may, in its discretion, increase the award of damages to an amount not to exceed three times the actual damages sustained.

NEW SECTION. Sec. 4. (1) In lieu of sealed bids in constructing or operating a nuclear generating project and associated facilities, a joint operating agency may solicit quotations and execute a contract for work under this section for a defaulted contract or for a contract terminated in whole or in part, or to consolidate work under several contracts into one contract. The managing director or designee shall determine in writing prior to execution of a contract under this section that the proposed contract will accomplish project completion more economically than sealed bids.

(2) The operating agency shall specify at a prequotation conference the contract requirements in the solicitation, which may include but are not limited to: Schedule, managerial and staffing requirements, productivity and production levels, approved project quality assurance procedures, and time and place for submission of quotations. The operating agency may issue such solicitation and shall conduct a prequotation conference prior to default or termination of contract(s) to be replaced, to the extent necessary to accomplish orderly transition of work assignments. Any inquiries and responses thereto shall be confirmed in writing and shall be sent to all offerors.

During the prequotation conference, the operating agency shall define in writing the roles, responsibilities, and obligations of persons under the contract and all persons under defaulted, terminated, or consolidated contracts.

(3) After quotations are received by the operating agency, invitations shall be sent to all responsible offerors who submit quotations to attend discussions for the purpose of clarification to assure full understanding of, and responsiveness to, the requirements of the operating agency. Any inquiries and responses thereto shall be confirmed in writing and shall be sent to all offerors. Offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of quotations, and such revisions may be permitted after submissions and prior to award for the purpose of obtaining best and final offers. In conducting discussions there shall be no disclosure of any information derived from quotations submitted by competing offerors.

(4) The operating agency shall execute a contract with the responsible offeror whose quotation is determined in writing to be the most advantageous to the operating agency taking into consideration the requirements set forth in the request for proposals. The contract file shall contain the basis on which the successful offeror is selected. The operating agency shall conduct a briefing conference on the selection if requested by an offeror.

(5) The contract may be fixed price or cost-reimbursable, in whole or in part, but not cost-plus-percentage-of-cost.

(6) The operating agency shall retain authority and responsibility for inspection, testing, and compliance with applicable regulations or standards of any state or federal governmental agency.

NEW SECTION. Sec. 5. For the awarding of a contract to purchase any item or items of materials, equipment, or supplies in an amount exceeding five thousand dollars but less than seventy-five thousand dollars, exclusive of sales tax, the managing director or a designee may, in lieu of sealed bids, secure telephone and/or written quotations from at least five vendors, where practical, and award contracts for purchase of materials, equipment, or supplies to the lowest responsible bidder. The managing director or a designee shall establish a procurement roster, which shall consist of suppliers and manufacturers who may supply materials or equipment to the operating agency, and shall provide for solicitations which will equitably distribute opportunity for bids among suppliers and manufacturers on the roster. Immediately after the award is made, the bid quotations obtained shall be recorded and shall be posted or otherwise made available for public inspection and copying pursuant to chapter 42.17 RCW at the office of the operating agency or any other officially designated location. Waiver of the deposit or bid bond required for sealed bids may be authorized by the operating agency in securing the bid quotations.

NEW SECTION. Sec. 6. When the managing director or a designee determines in writing that it is impracticable to secure competition for required materials, equipment, or supplies, he or she may purchase the materials, equipment, or supplies without competition. The term "impracticable to secure competition" shall mean:

(1) When material, equipment, or supplies can be obtained from only one person or firm (single source of supply); or

(2) When specially designed parts or components are being procured as replacement parts in support of equipment specially designed by the manufacturer.

NEW SECTION. Sec. 7. The managing director or a designee shall have the power to amend a contract previously executed for the construction of a nuclear generating project and associated facilities, by change order or other writing, if the managing director certifies to the executive board and the executive board finds in an open meeting that:

(1) Such amendment is necessary to comply with applicable regulations or standards of any state or federal governmental agency or with any change in plans or specifications recommended by the architect-engineer in charge of the project or by the managing director for the purpose of improving the safety of the project or accomplishing completion of the project more economically than with sealed bids;

(2) Such amendment does not provide for a type of construction basically different from that provided for in such contract;

(3) The plans and specifications for work to be performed under the contract amendment are at least eighty percent complete; and

(4) Such amendment specifies that the contractor will be compensated for actual work performed valued at its contracted cost.

Nothing in chapter 173, Laws of 1981, may be construed to bear on the validity of any contract amendment executed under the law as it existed prior to May 14, 1981, or to affect any judicial proceeding arising from actions taken under such law.

Nothing in this section may be construed to bear on the validity of any contract amendment executed under the law as it existed prior to the effective date of this section, or to affect any judicial proceeding arising from actions taken under such law.

NEW SECTION. Sec. 8. When the managing director or a designee determines in writing that an emergency endangers the public safety or threatens property damage or that serious financial injury would result if materials, supplies, equipment, or work are not obtained by a certain time, and they cannot be contracted for by that time by means of sealed bids, the managing director or designee may purchase materials, equipment, or supplies or may order work by contract in any amount necessary, after having taken precaution to secure a responsive proposal at the lowest price practicable under the circumstances: PROVIDED, That for the purposes of this section the term "serious financial injury" means that the costs attributable to the delay caused by contracting by sealed bids exceed the cost of materials, supplies, equipment, or work to be obtained.

NEW SECTION. Sec. 9. The executive board shall establish procedures for implementing sections 2 through 8 of this act by operating agency resolution after notice, public hearing, and opportunity for public comment. The procedures shall be established within six months after the effective date of this act.

NEW SECTION. Sec. 10. (1) All criminal statutes of the state of Washington apply to a joint operating agency.

(2) Any director, officer, or employee of any contractor who knowingly provides false information or knowingly conceals information required by this chapter shall be guilty of a class C felony punishable as provided in chapter 9A.20 RCW.

(3) It shall be the duty of the attorney general or prosecuting attorney to represent the state of Washington in all criminal actions and proceedings under this chapter.

NEW SECTION. Sec. 11. Sections 4 and 7 of this act shall expire on the date that construction is completed on those nuclear projects which are under construction by any joint operating agency on January 1, 1982.

NEW SECTION. Sec. 12. Nothing in this act requires reapplication by a joint operating agency in existence on the effective date of this act.

NEW SECTION. Sec. 13. Sections 1 through 12 of this act are each added to chapter 43.52 RCW.

NEW SECTION. Sec. 14. This act shall not be construed as affecting any existing right acquired, or liability or obligation incurred under the sections repealed in this act, nor any rule, regulation, or order adopted, nor any proceeding instituted, under those sections.

NEW SECTION. Sec. 15. The following acts or parts of acts are each repealed:

(1) Section 43.52.250, chapter 8, Laws of 1965, section 1, chapter 184, Laws of 1977 ex. sess., section 1, chapter 1, Laws of 1981 1st ex. sess., section 1, chapter 43, Laws of 1982 1st ex. sess. and RCW 43.52.250;

(2) Section 43.52.260, chapter 8, Laws of 1965, section 2, chapter 184, Laws of 1977 ex. sess. and RCW 43.52.260;

(3) Section 43.52.272, chapter 8, Laws of 1965 and RCW 43.52.272;

(4) Section 2, chapter 28, Laws of 1977 ex. sess., section 1, chapter 173, Laws of 1981 and RCW 43.52.490;

(5) Section 2, chapter 173, Laws of 1981 and RCW 43.52.495;

(6) Section 3, chapter 173, Laws of 1981 and RCW 43.52.500;

(7) Section 4, chapter 173, Laws of 1981 and RCW 43.52.505;

(8) Section 5, chapter 173, Laws of 1981 and RCW 43.52.510;

(9) Section 6, chapter 173, Laws of 1981 and RCW 43.52.515;

(10) Section 1, chapter 44, Laws of 1982 1st ex. sess. and RCW 43.52.600;

(11) Section 2, chapter 44, Laws of 1982 1st ex. sess. and RCW 43.52.603;

(12) Section 3, chapter 44, Laws of 1982 1st ex. sess. and RCW 43.52.606;

(13) Section 4, chapter 44, Laws of 1982 1st ex. sess. and RCW 43.52.609;

(14) Section 5, chapter 44, Laws of 1982 1st ex. sess. and RCW 43.52.612;

(15) Section 6, chapter 44, Laws of 1982 1st ex. sess. and RCW 43.52.615;

(16) Section 7, chapter 44, Laws of 1982 1st ex. sess. and RCW 43.52.618; and

(17) Section 8, chapter 44, Laws of 1982 1st ex. sess. and RCW 43.52.621.