HOUSE BILL REPORT

                     ESHB 2409

                              As Passed House

                             February 15, 1992

Title:  An act relating to public works contracts.

Brief Description:  Changing requirements for public works contracts bid awards.

Sponsor(s):  By House Committee on Commerce & Labor (originally sponsored by Representatives Franklin, Heavey, Winsley, R. King, Jones, Orr, Jacobsen, Prentice, G. Cole, Day and Valle).

Brief History:

   Reported by House Committee on:

Commerce & Labor, January 30, 1992, DPS;

Passed House, February 15, 1992, 94-0.

HOUSE COMMITTEE ON

COMMERCE & LABOR

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass.  Signed by 11 members:  Representatives Heavey, Chair; G. Cole, Vice Chair; Fuhrman, Ranking Minority Member; Lisk, Assistant Ranking Minority Member; Franklin; Jones; R. King; O'Brien; Prentice; Vance; and Wilson.

Staff:  Chris Cordes (786-7117).

Background:  Most public agencies are required to award public works contracts to the lowest responsible bidder.  This requirement applies specifically to cities, counties, school districts, institutions of higher education, housing authorities, certain state agencies, public hospital districts, port districts, public utility districts, sewer districts, water districts, diking and draining districts, and irrigation districts. 

In most public works statutes, there is no definition of "lowest responsible bidder."  School districts use the definition of lowest responsible bidder that the state uses for purchasing goods or services. Under this definition, the state must consider the ability of the bidder to perform the contract, the reputation and experience of the bidder, whether the bidder can perform in the time specified, the quality of performance under previous contracts, and previous compliance by the bidder with laws relating to the contract.

Summary of Bill:  The requirement for cities, counties, water districts, and sewer districts to determine the lowest responsible bidder on public works projects is changed.  In determining the lowest responsible bidder, the agency is required to give consideration to both price and other specified criteria.  The criteria to be considered are the ability of the contractor to complete the contract within the specified time in the contract, and the compliance of the contractor with federal, state, and local laws pertaining to the contract.

The authority of a state contracting authority to negotiate bid price adjustments on public works is changed to require the state to negotiate with a bidder who is both the low responsive and lowest responsible bidder, using the same criteria used by local governments to determine the lowest responsible bidder. 

Fiscal Note:  Available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  Agencies sometimes feel constrained to accept the lowest bid even though the bidder has not had satisfactory performance on past contracts.  The statute should specify the criteria that agencies will use to determine which bidders are responsible.  The criteria in the original bill could be revised to meet expressed concerns.

Testimony Against:  The criteria in the original bill for determining the lowest responsible bidder are too subjective.  Contractors must already supply bonds and have retainage held.  Does this amount to "responsibility?"  If criteria are to be stated in the law, they must be flexible enough for administration of contracts.

Witnesses:  (In favor):  Robert Dilger, Washington State Building and Construction Trades Council.  (In favor, with concerns) Joe Daniels, Wastewater Districts.  (Opposed) Duke Schaub, Associated General Contractors; Vern Wagar, County Road Administration Board; and Bob Berg, Lewis County Department of Public Services.