Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Labor & Workforce Development Committee

HB 2526

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Bill

Provides that noncompliance with the apprenticeship utilization requirements is one of the violations that count towards debarring a contractor from bidding on public works;
Provides that, for purposes of meeting the responsible bidder criteria, the bidder must not have been found out of compliance with the apprenticeship utilization requirements;
Requires the Department of Enterprise Services to monitor contractors' compliance with apprenticeship utilization requirements;
Provides that, for purposes of determining the lowest responsible bidder on a public works contract, a bid will be decreased by five percent if the bidder employs apprentices, subject to certain requirements.

Background:

Apprenticeships: Apprenticeship programs offer on-the-job training under the supervision of journey level workers and require a certain number of instructional hours, usually at a community or technical college. Apprenticeships can last from one to six years. During the apprenticeship, apprentices are paid lower wages than journey level workers.

The Washington State Apprenticeship and Training Council (Council), which is part of the Department of Labor & Industries (L&I), establishes apprenticeship program standards, approves apprenticeship training programs, and otherwise governs the programs. Apprenticeship standards address the ratio of apprentices to journey level workers allowed, the type of work apprentices may do, and the required supervision of apprentices.

Employers may partner with an approved apprenticeship program to offer apprenticeships, or develop its own apprenticeship program that is approved by the Council.

Apprenticeship utilization requirements: Public works that are estimated to cost $1 million or more must require that at least 15 percent of the labor hours be performed by apprentices enrolled in approved apprenticeship training programs. This requirement applies to contracts awarded by the state, school districts, and state four-year higher education institutions. For the Department of Transportation, apprenticeship utilization requirements apply to public works estimated to cost $2 million or more.

Awarding agencies may adjust the apprentice utilization requirements on specific projects for certain reasons, such as if there is a lack of apprentices in a specific geographic area.

The Department of Enterprise Services must provide information and technical assistance to affected agencies and collect certain data from agencies for projects subject to the apprenticeship utilization requirements.

Public works bidding: A contractor bidding on a public works contract must meet certain criteria to be considered a "responsible bidder" qualified to bid. The contractor must, for example, be registered with the L&I and have industrial insurance coverage for its employees. In addition, the contractor must not have been found noncompliant by the Council for working apprentices out of ratio, without supervision, or outside their approved work processes, for the one-year period immediately preceding the date of the bid solicitation.

A contractor is barred from bidding on any public works contract for one year if the contractor has committed any two of the following violations within a five-year period: (1) failing to register as a contractor; (2) filing false payroll reports; (3) failing to obtain industrial insurance coverage; or (4) working apprentices out of ratio, without supervision, or outside their approved work processes.

Summary of Bill:

Apprenticeship utilization requirements: The Department of Enterprise Services (Department) must monitor contractors' compliance with the apprenticeship utilization requirements. The Department must maintain on its web site a list of contractors that have been found to be out of compliance with the percentage of labor hours required to be performed by apprentices. The Department may adopt rules to implement the requirement to monitor contractors.

Public works bidding: Noncompliance with the percentage of labor hours required under the apprenticeship utilization requirements is a violation that counts towards a contractor being debarred from bidding on public works contracts. In addition, to be considered a responsible bidder, a contractor must not have been found noncompliant with the percentage of labor hours required to be worked by apprentices under the apprenticeship utilization requirement.

When determining the lowest responsible bidder on a public works contract, the state or municipality must decrease a bidder's bid by five percent if the bidder is employing a trade on the project, the trade is one for which there is an approved apprenticeship program, and the bidder is a party to an apprenticeship agreement for that trade. If the bidder employs more than one trade for which there is a registered apprenticeship program, the bidder must be a party to an apprenticeship agreement for each trade it is employing on the project in order to receive the five percent decrease. The preference granted by the decrease does not reduce the contract amount awarded.

The bidder must provide written proof of being a party to an apprenticeship agreement, at the time of submitting a bid. After being awarded the contract, if the bidder at any time is no longer a party to a registered apprenticeship agreement for each apprenticed trade the bidder is employing on the project, the bidder must notify the state or municipality within 30 days. The state or municipality may include in its contract sanctions for a bidder failing to remain a party to a registered apprenticeship agreement during the duration of the contract. The sanctions may include temporary or permanent cessation of the work without recourse to breach of contract claims by the bidder or restitution for nonperformance.