Brief Summary of Substitute Bill

• Prohibits a municipality that receives a written protest from a public works bidder from awarding the contract to anyone other than the protesting bidder without at least five days' notice of the intent to award the contract.

• Prohibits a low bidder who claims error and fails to enter into a contract from bidding on the same project again if a second or subsequent call for bids is made.

• Prohibits a public works general contractor/construction manager that receives a written protest from a subcontractor bidder from awarding the subcontract bid package to anyone other than the protesting bidder without at least five days' notice of the intent to award the subcontract bid package.

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 9 members: Representatives Haigh, Chair; Miloscia, Vice Chair; Armstrong, Ranking Minority Member; Shabro, Assistant Ranking Minority Member; Hunt, McDermott, Nixon, Tom and Wallace.

Public works projects include construction, building, renovation, remodeling, alteration, repair or improvement of real property. Contracts of a medium estimated cost are awarded based on the traditional design-bid-build process, in which the public entity retains an architectural firm to design the facility, puts the construction phase of the project out for competitive bid, and awards the contract to the lowest responsible bidder. Under the traditional bid-build process, the public entity must publicize a request for bids in the official newspaper or a newspaper of general circulation at least 13 days prior to the date bids are due. The notice must state the nature of the work to be done, and the date that sealed bids must be filed with the public entity. Each bid must be accompanied by a deposit of at least 5 percent of the amount of the bid. The public entity must award the contract to the lowest responsible bidder.

However, several state and local government bodies are authorized to use alternative public works contracting procedures for projects valued over $10 million. One procedure is the design-build procedure and the other is the general contractor/construction manager (GC/CM) procedure. The following government entities are eligible to use either procedure:

• cities with over 70,000 people and public authorities chartered by those cities;

• public utility districts with revenues from energy sales over $23 million per year; and

Under the GC/CM procedure, a contract is awarded to a single firm for a guaranteed construction cost after competitive selection. The contract is to provide services during the design phase, and to act as both the construction manager and the general contractor during the construction phase. Use of the GC/CM procedure requires that the project meet specified criteria, such as the success of the project necessitates involvement of the GC/CM during the design stage. Following an extensive evaluation process, the government entity must award the contract to the firm that submits the final proposal scoring the highest based on outlined evaluation factors. The maximum construction cost guaranteed by the GC/CM is negotiated between the parties after the scope of the project is adequately determined.

If a municipality receives a written protest from a bidder, the municipality may not award the public works contract to anyone other than the protesting bidder without first providing at least five business days' notice of the municipality's intent to award the contract.

A low bidder who claims error and fails to enter into a contract is prohibited from bidding on the same project again if a second or subsequent call for bids for the project is made.

If a GC/CM building a public works project receives a written protest from a subcontractor bidder, the GC/CM may not award the subcontract bid package to anyone other than the protesting bidder without first providing at least five business days' notice of the GC/CM's intent to award the subcontract bid package.

The substitute bill applies the protesting bidder rule to a GC/CM building a public works project.

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

Testimony For: This is a good bill that prevents public entities from rushing to award a contract, precluding a protesting bidder from having his concerns addressed. The same protections should be extended to subcontractors who protest the bidding process on a GC/CM project. The proposed amendment would require general contractors in the GC/CM process to abide by the same rule.

Testified: Representative Haigh, prime sponsor; Duke Schaub, Associated General Contractors; and Dave Ducharme, Utility Contractors Association of Washington; and Larry Stevens, Mechanical Contractors Association and Electrical Contractors Association.