AN ACT Relating to municipal bidding requirements; amending RCW 35.22.620, 35.22.650, 39.04.010, 39.04.020, 39.04.050, 39.04.070, and 35.23.352; and adding a new section to chapter 35.23 RCW.

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

Sec. 1. Section 1, chapter 56, Laws of 1975 1st ex. sess. as amended by section 1, chapter 89, Laws of 1979 ex. sess. and RCW 35.22.620 are each amended to read as follows:

(1) Any public work or improvement of a first class city shall be done by contract pursuant to public notice and call for competitive bids, whenever the estimated cost of such work or improvement, including the cost of materials, supplies, and equipment will exceed the sum of ((~~ten~~)) fifty thousand dollars, or an amount adjusted in subsection (4) of this section: PROVIDED, That ((whenever this public work or improvement is for construction of water mains, such sum shall be fifteen thousand dollars. When any emergency shall require the immediate execution of such public work, upon the finding of the existence of such emergency by the authority having power to direct such public work to be done and duly entered of record, publication of description and estimate may be made within seven days after the commencement of the work)) electrical signalization materials and supplies; pipe fittings, and appurtenances for water distribution work; and trees, shrubs, ground cover, and other planting materials, which are purchased by the city on the open market through the competitive bidding process, shall be excluded from the cost of any work or improvement governed by this subsection: PROVIDED FURTHER, That a first class city may, using day labor, perform detour signing, barricading, and related work necessary for public safety; provide and install nonelectrical traffic control devices; clean catch basins; insert or graft wyes or trees on existing facilities; install telemetering and pump control equipment; and do any incidental work following a public work or improvement done by contract, provided that such incidental work may not exceed five thousand dollars, or an amount adjusted as provided in subsection (4) of this section.

(2) ((~~In addition to the procedures of subsection (1) of this section,~~)) A first class city may use a small works roster and award contracts under this subsection for contracts ((~~of thirty~~)) equal to or less than one hundred thousand dollars, or ((~~less~~)) an amount adjusted as provided in subsection (4) of this section. This amount shall be referred to as the small works roster limit.

(a) The city may maintain a small works roster comprised of all contractors who have requested to be on the roster and are, where required by law, properly licensed or registered to perform such work in this state.

(b) Whenever work is done by contract, the estimated cost of which is ((~~thirty thousand dollars~~)) equal to or less than the small works roster limit, and the city uses the small works roster, the city shall invite ((~~proposals~~)) bids from ((~~all~~)) appropriate contractors on the small works roster((;)): PROVIDED, That not less than five separate appropriate contractors, if available, shall be invited to submit bids on any one contract: PROVIDED FURTHER, That whenever possible, the city shall invite at least one proposal from a minority or woman contractor who shall otherwise qualify under this section. ((~~Such invitation~~)) Once a bidder on the small works roster has been offered an opportunity to bid, that bidder shall not be offered another opportunity until all other appropriate contractors on the small works roster have been offered an opportunity to submit a bid. Invitations shall include an estimate of the scope and nature of the work to be performed, and materials and equipment to be furnished.

(c) When awarding such a contract for work, the estimated cost of which is ((~~thirty thousand dollars~~)) equal to or less than the small works roster limit, the city shall award the contract to the contractor submitting the lowest responsible bid: PROVIDED, That whenever it would not violate public interest, the city may award the contract to a minority or woman-owned business that is not the lowest bidder when:

(i) Minority or woman-owned business participation has been less than twenty percent of the number of awards during the preceding twelve-month period; and

(ii) A qualified minority or woman-owned business has submitted a bid; and

(iii) The bid of the minority or woman-owned business is within ten percent, but in no event more than one thousand dollars higher than the low bidder, and that minority or woman-owned business has not been awarded a contract during the preceding twelve-month period through the small works roster process.

(3) When any emergency shall require the immediate performance of any public work or improvement of any value, a first class city may perform the public work or improvement with its own day labor forces or otherwise execute the public work or improvement without public competitive bidding, upon the finding of the existence of such emergency by the authority having power to direct such public work or improvement to be done. This finding shall be entered into the public record. A description and estimate of the public work shall be published in the official newspaper of the first class city within seven days after the work commences.

(4) The dollar figures established in subsection (1) of this section, and the small works roster limit established in subsection (2) of this section, annually shall be adjusted upward or downward in direct proportion to the cost of construction factor established by the office of financial management. On or before June 30, 1986, and on or before June 30 of each year thereafter, the office of financial management shall publish a cost of construction factor that reflects the percentage increase or decrease in construction costs during the preceding calendar year. In establishing a cost of construction factor, the office of financial management may use the Engineering News Record construction cost index or any other nationally recognized construction cost index. Effective July 1, 1986, and on the first day of July each year thereafter, all dollar figures and small works roster limits in effect during the previous year, as provided in subsections (1) and (2) of this section, shall be increased or decreased in direct proportion to the latest cost of construction factor published by the office of financial management.

Sec. 2. Section 4, chapter 56, Laws of 1975 1st ex. sess. and RCW 35.22.650 are each amended to read as follows:

All contracts by and between a first class city and contractors for any public work or improvement ((~~exceeding the sum of ten thousand dollars, or fifteen thousand dollars for construction of water mains,~~)) shall contain the following clause:

"Contractor agrees that he shall actively solicit the employment of minority group members. Contractor further agrees that he shall actively solicit bids for the subcontracting of goods or services from qualified minority businesses. Contractor shall furnish evidence of his compliance with these requirements of minority employment and solicitation. Contractor further agrees to consider the grant of subcontracts to said minority bidders on the basis of substantially equal proposals in the light most favorable to said minority businesses. The contractor shall be required to submit evidence of compliance with this section as part of the bid."

As used in this section, the term "minority business" means a business at least fifty-one percent of which is owned by minority group members. Minority group members include, but are not limited to, blacks, women, native Americans, Orientals, Eskimos, Aleuts, and Spanish Americans.

Sec. 3. Section 1, chapter 183, Laws of 1923 as last amended by section 1, chapter 98, Laws of 1982 and RCW 39.04.010 are each amended to read as follows:

The term state shall include the state of Washington and all departments, supervisors, commissioners and agencies thereof.

The term municipality shall include every city, county, town, district or other public agency thereof which is authorized by law to require the execution of public work, except drainage districts, diking districts, diking and drainage improvement districts, drainage improvement districts, diking improvement districts, consolidated diking and drainage improvement districts, consolidated drainage improvement districts, consolidated diking improvement districts, irrigation districts or any such other districts as shall from time to time be authorized by law for the reclamation or development of waste or undeveloped lands.

The term public work shall include all work, construction, alteration, ((~~repair,~~)) or improvement other than ((~~ordinary~~)) repairs and 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, but nothing herein shall apply to the construction, alteration, repair, or improvement of any municipal street railway system. All public works, including maintenance or repairs when performed by contract shall comply with the provisions of RCW 39.12.020.

The term contract shall mean a contract in writing for the execution of public work for a fixed or determinable amount duly awarded after advertisement and competitive bid. However, a contract which is awarded from a small works roster under the authority of RCW 39.04.150 and 35.22.620 need not be advertised.

((Cost of superintendence, engineering, clerical and accounting service shall include all expenditures specially incurred for such service, and shall include a proportionate charge for the time of all salaried officers, engineers, clerks, accountants and employees of the state or municipality while engaged in such work or in keeping or preparing the estimates, accounts and records thereof.))

Sec. 4. Section 2, chapter 183, Laws of 1923 as last amended by section 4, chapter 98, Laws of 1982 and RCW 39.04.020 are each amended to read as follows:

Whenever the state, or any municipality shall determine that any public work is necessary to be done it shall cause plans ((~~and/or~~)), specifications, or both thereof and an estimate of the cost of such work to be made and filed in the office of the director, supervisor, commissioner, trustee, board or agency having by law the authority to require such work to be done. The plans, specifications, and estimates of cost shall be approved by the director, supervisor, commissioner, trustee, board, or agency and the original draft or a certified copy filed in such office before further action is taken.

If the state, or such municipality shall determine that it is necessary or advisable that such work shall be executed by any means or method other than by contract, and it shall appear by such estimate that the probable cost of executing such work will exceed the sum of ((~~twenty-five hundred dollars, or twenty-five~~)) fifteen thousand dollars ((~~if such work is let from a small works roster created pursuant to RCW 39.04.150~~)), then the state or such municipality shall at least fifteen days before beginning work cause such estimate, together with a description of the work, to be published at least once in a legal newspaper of general circulation published in or as near as possible to that part of the county in which such work is to be done: PROVIDED, That when any emergency shall require the immediate execution of such public work, upon a finding of the existence of such emergency by the authority having power to direct such public work to be done and duly entered of record, publication of description and estimate may be made within seven days after the commencement of the work.

Sec. 5. Section 4, chapter 183, Laws of 1923 and RCW 39.04.050 are each amended to read as follows:

Original estimates shall show in detail the estimated cost of the work; the estimated quantities of each class of work; the estimated unit cost for each class; the estimated total cost for each class; the time limit, allowed for the completion of the work and the estimated dates of commencement and completion. ((Such estimates shall show in detail the estimated total cost of labor, material, provisions, supplies, equipment rentals, equipment purchases, industrial insurance and medical aid, superintendence, engineering, clerical and accounting service, the value of the use of equipment owned by the state or such municipality and other estimated expenses in the execution of such work.))

Sec. 6. Section 6, chapter 183, Laws of 1923 and RCW 39.04.070 are each amended to read as follows:

Whenever the state or any municipality shall execute any public work by any means or method other than by contract, it shall cause to be kept and preserved a full, true and accurate account and record of the costs of executing such work in accordance with the budgeting, accounting, and reporting system provisions of RCW 43.09.200.

((Such account and record shall show in accurately tabulated form and under appropriate headings the totals of all classes and kinds of work performed, the total cost and unit cost of each class, together with the costs of executing such work, including, under separate headings, the costs of labor; material; equipment purchased; provisions and supplies; rental of equipment, industrial insurance and medical aid; superintendence; engineering; clerical and accounting service; the reasonable value, including depreciation, of the use of equipment owned by the state or municipality; and all other expenses incurred therein.))

Sec. 7. Section 35.23.352, chapter 7, Laws of 1965 as last amended by section 2, chapter 89, Laws of 1979 ex. sess. and RCW 35.23.352 are each amended to read as follows:

(1) Any second or third class city or any town may construct any public work or improvement by contract or day labor without calling for bids therefor whenever the estimated cost of such work or improvement, including cost of materials, supplies and equipment will not exceed the sum of ((~~fifteen~~)) fifty thousand dollars or an amount adjusted as provided in subsection (3) of this section. Whenever the cost of such public work or improvement, including materials, supplies and equipment, will exceed ((~~fifteen~~)) fifty thousand dollars or an amount adjusted as provided in subsection (3) of this section, the same shall be done by contract. All such contracts shall be let at public bidding upon posting notice calling for sealed bids upon the work: PROVIDED, That electrical signalization materials and supplies; pipe fittings, and appurtenances for water distribution work; and trees, shrubs, ground cover, and other planting materials, which are purchased by the city on the open market through the competitive bidding process, shall be excluded from the cost of any work or improvement governed by this subsection: PROVIDED FURTHER, That a first class city may, using day labor, perform detour signing, barricading, and related work necessary for public safety; provide and install nonelectrical traffic control devices; clean catch basins; insert or graft wyes or trees on existing facilities; install telemetering and pump control equipment; and do any incidental work following a public work or improvement done by contract, provided that such incidental work may not exceed five thousand dollars, or an amount adjusted as provided in subsection (4) of this section.

Such notice thereof shall be posted in a public place in the city or town and by publication in the official newspaper once each week for two consecutive weeks before the date fixed for opening the bids. The notice shall generally state the nature of the work to be done that plans and specifications therefor shall then be on file in the city or town hall for public inspections, and require that bids be sealed and filed with the council or commission within the time specified therein. Each bid shall be accompanied by a bid proposal deposit in the form of a cashier's check, postal money order, or surety bond to the council or commission for a sum of not less than five percent of the amount of the bid, and no bid shall be considered unless accompanied by such bid proposal deposit. If there is no official newspaper the notice shall be published in a newspaper published or of general circulation in the city or town. The council or commission of the city or town shall let the contract to the lowest responsible bidder or shall have power by resolution to reject any or all bids and to make further calls for bids in the same manner as the original call. When the contract is let then all bid proposal deposits shall be returned to the bidders except that of the successful bidder which shall be retained until a contract is entered into and a bond to perform the work furnished, with surety satisfactory to the council or commission, in the full amount of the contract price. If the bidder fails to enter into the contract in accordance with his bid and furnish such bond within ten days from the date at which he is notified that he is the successful bidder, the check or postal money order and the amount thereof shall be forfeited to the council or commission or the council or commission shall recover the amount of the surety bond. If no bid is received on the first call the council or commission may readvertise and make a second call, or may enter into a contract without any further call or may purchase the supplies, material or equipment and perform such work or improvement by day labor.

(2) In addition to the procedures of subsection (1) of this section, a second or third class city or a town may use a small works roster and award contracts under this subsection for contracts of ((~~twenty~~)) one hundred thousand dollars or less.

(a) The city or town may maintain a small works roster comprised of all contractors who have requested to be on the roster and are, where required by law, properly licensed or registered to perform such work in this state.

(b) Whenever work is done by contract, the estimated cost of which is ((~~twenty~~)) one hundred thousand dollars or less, and the city uses the small works roster, the city or town shall invite proposals from all appropriate contractors on the small works roster: PROVIDED, That whenever possible, the city or town shall invite at least one proposal from a minority contractor who shall otherwise qualify under this section. Such invitation shall include an estimate of the scope and nature of the work to be performed, and materials and equipment to be furnished.

(c) When awarding such a contract for work, the estimated cost of which is ((~~twenty~~)) one hundred thousand dollars or less, the city or town shall award the contract to the contractor submitting the lowest responsible bid.

(3) The dollar figures established in subsection (1) of this section, and the small works roster limit established in subsection (2) of this section, annually shall be adjusted upward or downward in direct proportion to the cost of construction factor established by the office of financial management. On or before June 30, 1986, and on or before June 30 of each year thereafter, the office of financial management shall publish a cost of construction factor that reflects the percentage increase or decrease in construction costs during the preceding calendar year. In establishing a cost of construction factor, the office of financial management may use the Engineering News Record construction cost index or any other nationally recognized construction cost index. Effective July 1, 1986, and on the first day of July each year thereafter, all dollar figures and small works roster limits in effect during the previous year, as provided in subsections (1) and (2) of this section, shall be increased or decreased in direct proportion to the latest cost of construction factor published by the office of financial management.

(4) Any purchase of supplies, material, equipment or services other than professional services, except for public work or improvement, where the cost thereof exceeds two thousand dollars shall be made upon call for bids: PROVIDED, That the limitations herein shall not apply to any purchases of materials at auctions conducted by the government of the United States, any agency thereof or by the state of Washington or a political subdivision thereof.

((~~(4)~~)) (5) Bids shall be called annually and at a time and in the manner prescribed by ordinance for the publication in a newspaper published or of general circulation in the city or town of all notices or newspaper publications required by law. The contract shall be awarded to the lowest responsible bidder.

((~~(5)~~)) (6) For advertisement and competitive bidding to be dispensed with as to purchases between two thousand and four thousand dollars, the city legislative authority must authorize by resolution a procedure for securing telephone and/or written quotations from enough vendors to assure establishment of a competitive price and for awarding such contracts for purchase of materials, equipment, or services to the lowest responsible bidder. Immediately after the award is made, the bid quotations obtained shall be recorded and open to public inspection and shall be available by telephone inquiry.

NEW SECTION. Sec. 8. A new section is added to chapter 35.23 RCW to read as follows:

Whenever the state or any municipality shall execute any public work by any means or method other than by contract, it shall cause to be kept and preserved a full, true, and accurate account and record of the costs of executing such work in accordance with the budgeting, accounting, and reporting system provisions of RCW 43.09.200.