HOUSE BILL REPORT

ESHB 186

BYHouse Committee on Local Government (originally sponsored by Representatives Haugen, Brough, Nutley, May, Hine, L. Smith, Zellinsky, Braddock and Crane)

Raising amounts over which public contracts must be sent out for competitive bids.

House Committe on Local Government

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (12)

     Signed by Representatives Haugen, Chair; Cooper, Vice Chair; Beck, Ferguson, Hine, Madsen, Nealey, Nelson, Nutley, Rayburn, L. Smith and Zellinsky.

Minority Report:     Do not pass.  (1)

     Signed by Representative Bumgarner.

House Staff:Steve Lundin (786-7127)

AS PASSED HOUSE MARCH 19, 1987

BACKGROUND:

First-class cities, and code cities with a population of 20,000 or more, may construct public works projects with their own labor forces if the project is of a value of $10,000 or less, or $15,000 of less for water mains.  All public works projects in excess of these amounts must be put out to contract.  Any public works project within these limits may be put out to contract. First-class city public works projects on their electrical generating or distribution systems are not subject to these restrictions.

Second-class cities, third-class cities, towns, and code cities with a population of less than 20,000 may construct public works projects with their own labor forces if the project is of a value of $15,000 or less.  All public works projects in excess of this value must be put out to contract.  Any public works project within this limit may be put out to contract.

Second-class cities, third-class cities, towns, and code cities with a population of less than 20,000 may make purchases of $2,000 or less without using competitive bidding procedures. Purchases of between $2,000 and $4,000 may be made with a modified competitive bidding procedure with prices solicited by telephone or in writing.  Purchases of $4,000 or more must be made through a formal competitive bidding procedure.

SUMMARY:

1.  First-class cities, and code cities with a population over 20,000, may construct public works projects in any budget period of up to 10 percent of the total public works construction budget.  If a city has public works performed by its day labor forces in excess of the permitted amount, the excess is reduced from the amount permitted in the next budget period.  If the city is still in excess after two years, 20 percent of the motor vehicle fuel tax distributions to the city are withheld until the amount of public works performed by city day labor forces has been adequately reduced.

a)  First-class cities and code cities, with a population of over 150,000, are restricted further in that a single public works project performed by city forces may not be in excess of $50,000 in value if the project involves more than a single trade or craft, nor in excess of $25,000 if the project involves a single trade or craft or involves street lighting or signalization.

b)  First-class cities with a population of 150,000 and under, and code cites with a population of from 20,000 to 150,000, are restricted further in that a single public works project performed by city forces may not be in excess of $35,000 in value if the project involves more than a single trade or craft, nor in excess of $20,000 if the project involves a single trade or craft or involves street lighting or signalization.

2.  All other cities and towns have their existing single project day labor limit increased from $15,000 to $30,000 if the project involves more than a single trade or craft, and $20,000 if the project involves a single trade or craft or involves street lighting or signalization.

3.  Cities and towns are not permitted to divide public works projects to avoid the single project limitations.  The allocation of public works projects to be performed by city or town employees shall not be subject to collective bargaining.

4.  First class cities, and code cities in excess of 20,000 population, must prepare a report annually for the state auditor on their public works construction budget, the value of public works performed by their employees, and the amount over or under the 10 percent limitation.

5.  The state auditor is required to prescribe a standard form to accounting for separate public works projects that are performed by public employees.  First-class cities, and code cities over 20,000 population, must record information on these forms about each public works project over $5,000 in value that is performed by their employees.

6.  Second-class cities, third-class cities, towns, and code cities under 20,000 population have their purchase bid limits increased, so that they: (a) can make purchases of $7,500 and under without competitive bidding; (b) can make purchases of from $7,500 to $15,000 with a modified competitive bidding; and (c) must use formal competitive bidding for purchases over $15,000.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Stan Finkelstein, Association of Washington Cities; Gary Zarker, City of Seattle; Sam Kinville, Washington State Council of County and City Employees.

House Committee - Testified Against: Luther Carr, private contractor; Dick Ducharme, Utility Contractors Association of Washington; Larry Stevens, National Electrical Contractors Association; Duke Schaub, Associated General Contractors; and Bob Dilger, Washington State Building Trades Association.

House Committee - Testimony For:     These decisions should be made locally.  The issue is how to obtain the lowest costs, not who should do the work.  Flexibility is needed.  Most construction is already contracted out and would continue to be.  These values are artificial, and in real terms reduce every year.  The increases merely keep up with inflation. About 10 percent of construction work is done by city employees in larger cities anyway, so no net change in work will result.  Some work can be done for less cost by city employees.  Small cities cannot get reasonable bids on may projects.  It costs too much to move personnel and equipment to get reasonable prices in remote cities.  A compromise is close to being consumated.  This is a vehicle that needs to be kept alive so the compromise which will probable be worked out can be enacted.

House Committee - Testimony Against: All construction and maintenance work should be done by private enterprise.  The only changes that should be made are to reduce or eliminate work by public employees.  We may lose jobs. Cost is not the issue.  In all instances private enterprise can do things cheaper than government.  We go any where for jobs.