AN ACT Relating to the prequalification of highway contractors; amending RCW 42.17.310, 47.28.075, and 47.28.090; adding new sections to chapter 47.28 RCW; and repealing RCW 47.28.070.

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

NEW SECTION. Sec. 1. No contract for the construction, improvement, or repair of any state highway or other public highway to be awarded and administered by the department of transportation may be awarded to any contractor who has not first been prequalified to perform the work by the department. No bid or proposal for such a contract may be received from a contractor who has not first been prequalified to perform the work by the department of transportation.

NEW SECTION. Sec. 2. The secretary of transportation shall adopt rules prescribing standards and criteria to assure that each highway construction and repair contract described in section 1 of this act shall be awarded to a competent and responsible contractor who has all of the following qualifications:

(1) Adequate financial resources, which may take into account the ability of the contractor to secure such resources;

(2) The necessary organization, personnel, equipment, facilities, experience, and technical qualification to perform highway construction and repair contracts generally and with respect to any specific contract such additional special qualifications as may be necessary to perform the contract;

(3) The ability to comply with the department's performance schedules taking into account the outstanding work on all of the contractor's construction and repair contracts;

(4) A satisfactory record of performing previous contracts;

(5) A satisfactory record of integrity, judgment, and skills; and

(6) Such other qualifications as the secretary may prescribe to assure that prequalified contractors are competent and responsible.

NEW SECTION. Sec. 3. Any contractor desiring to submit bids or proposals for highway construction or repair contracts as described in section 1 of this act shall file an application for prequalification with the department. The application shall be on a standard form supplied by the department. The form shall require a complete statement of the applicant's financial ability, including a statement of the applicant's current net assets and working capital. The form shall require such additional information as may be necessary for the department to determine whether or not the applicant is entitled to be prequalified in accordance with sections 1 through 8 of this act and the rules adopted thereunder.

NEW SECTION. Sec. 4. Upon request by the department an applicant for prequalification shall authorize the department to obtain any information pertinent to the application from third persons, including information relating to the applicant's net worth, assets, and liabilities, from banks or other financial institutions, surety companies, and material and equipment suppliers.

NEW SECTION. Sec. 5. Upon receipt of an application by a contractor for prequalification to perform highway construction and repair contracts, the department shall conduct such additional investigation as it deems necessary. If it finds that the applicant is qualified in accordance with the rules adopted by the secretary, the department shall prequalify the contractor to perform the contracts for a period of one year. The prequalification shall fix the aggregate dollar amount of work, including any contract let by the department, that the contractor may have under contract and uncompleted at any one time and may limit the contractor to the submission of bids or proposals upon a special class of work. Subject to any restrictions on the dollar amount or class of work specified thereunder, the prequalification shall authorize a contractor to bid or submit proposals on highway construction and repair contracts mentioned in section 1 of this act except contracts requiring special prequalification.

NEW SECTION. Sec. 6. A contractor may apply annually for renewal of its prequalification by submission of a renewal application on standard forms provided by the department. Based upon information received at the time of renewal or at any other time the department may amend the prequalification of the contractor as to the dollar amount or class of work that the contractor may perform or may refuse to renew the prequalification or may revoke a prequalification previously approved, all in accordance with the same standards and criteria used for considering an original application for prequalification.

NEW SECTION. Sec. 7. If the department finds, after the opening of bids, that facts exist that would disqualify the lowest bidder, or that the lowest bidder is not competent or responsible in accordance with the standards and criteria for prequalifying contractors, the department shall reject the bid despite the prior prequalification of the bidder. No contract may be awarded to a bidder not qualified to bid on it at the time fixed for receiving bids.

NEW SECTION. Sec. 8. If the department determines that a contractor should be denied prequalification, or that a contractor's prequalification should not be renewed, or that a contractor's prequalification should be revoked, the department shall give written notice of its determination to the contractor by mail properly addressed with postage prepaid. The intended action set forth in the written notification shall become final fifteen days after mailing unless within such time the contractor serves upon the assistant secretary of transportation for highways a written request for a hearing. Upon receipt of such a request, the department shall afford the contractor a hearing in accordance with the provisions of chapter 34.04 RCW relating to contested cases.

NEW SECTION. Sec. 9. The department of transportation may, at its option, terminate a contract awarded to the lowest responsible bidder based upon the following:

(1) The bidder's false or misleading answer to the standard form of questionnaire and financial statement required by sections 3 and 6 of this act;

(2) The bidder's failure to comply with the applicable federal or state prevailing wage rates;

(3) The bidder's quality of performance of the contract or previous contracts; or

(4) The bidder's ability, capacity, or skill to perform or complete the contract within the time specified.

Sec. 10. Section 31, chapter 1, Laws of 1973 as last amended by section 21, chapter 143, Laws of 1984 and RCW 42.17.310 are each amended to read as follows:

(1) The following are exempt from public inspection and copying:

(a) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, welfare recipients, prisoners, probationers, or parolees.

(b) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy.

(c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would violate the taxpayer's right to privacy or would result in unfair competitive disadvantage to the taxpayer.

(d) Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy.

(e) Information revealing the identity of persons who file complaints with investigative, law enforcement, or penology agencies, other than the public disclosure commission, if disclosure would endanger any person's life, physical safety, or property: PROVIDED, That if at the time the complaint is filed the complainant indicates a desire for disclosure or nondisclosure, such desire shall govern: PROVIDED, FURTHER, That all complaints filed with the public disclosure commission about any elected official or candidate for public office must be made in writing and signed by the complainant under oath.

(f) Test questions, scoring keys, and other examination data used to administer a license, employment, or academic examination.

(g) Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, but in no event shall disclosure be denied for more than three years after the appraisal.

(h) Valuable formulae, designs, drawings, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss.

(i) Preliminary drafts, notes, recommendations, and intra-agency memorandums in which opinions are expressed or policies formulated or recommended except that a specific record shall not be exempt when publicly cited by an agency in connection with any agency action.

(j) Records which are relevant to a controversy to which an agency is a party but which records would not be available to another party under the rules of pretrial discovery for causes pending in the superior courts.

(k) Records, maps, or other information identifying the location of archaeological sites in order to avoid the looting or depredation of such sites.

(l) Any library record, the primary purpose of which is to maintain control of library materials, or to gain access to information, which discloses or could be used to disclose the identity of a library user.

(m) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (a) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (b) highway construction or improvement as required by ((~~RCW 47.28.070~~)) sections 1 through 8 of this 1985 act.

(n) Railroad company contracts filed with the utilities and transportation commission under RCW 81.34.070, except that the summaries of the contracts are open to public inspection and copying as otherwise provided by this chapter.

(2) The exemptions of this section are inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. No exemption may be construed to permit the nondisclosure of statistical information not descriptive of any readily identifiable person or persons.

(3) Inspection or copying of any specific records exempt under the provisions of this section may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.

(4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld.

Sec. 11. Section 1, chapter 215, Laws of 1981 and RCW 47.28.075 are each amended to read as follows:

The department of transportation shall not be required to make available for public inspection and copying financial information supplied by any person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for highway construction or improvement as required by ((~~RCW 47.28.070~~)) sections 1 through 8 of this 1985 act.

Sec. 12. Section 47.28.090, chapter 13, Laws of 1961 as last amended by section 17, chapter 120, Laws of 1983 and RCW 47.28.090 are each amended to read as follows:

(1) At the time and place named in the call for bids the department of transportation shall publicly open and read the final figure in each of the bid proposals properly filed and read only the bid items on the three lowest bids, and shall award the contract to the lowest responsible Washington bidder if the bid is not more than five percent higher than the lowest responsible nonresident bidder's, and unless the department has, for good cause, continued the date of opening bids to a day certain, or rejected said bid: PROVIDED, That any bid may be rejected if the bidder has previously defaulted in the performance of and failed to complete a written public contract, or has been convicted of a crime arising from a previous public contract. If the lowest responsible bidder fails to meet the provisions or specifications requiring compliance with chapter 39.19 RCW and the rules adopted to implement that chapter, the department may award the contract to the next lowest responsible bidder which does meet the provisions or specifications or may reject all bids and readvertise. All bids shall be under sealed cover and accompanied by deposit in cash, certified check, cashier's check, or surety bond in an amount equal to five percent of the amount of the bid and no bid shall be considered unless the deposit is enclosed therewith.

(2) The lowest responsible bidder shall be based upon the following elements, none of which shall be given more consideration than another:

(a) The ability, capacity and skill of the bidder to perform the contract;

(b) The character, integrity, reputation, judgment, experience, and efficiency of the bidder;

(d) The quality of performance of previous contracts;

(e) The previous and existing compliance by the bidder with laws relating to the contract;

(f) Adherence to the bid specifications;

(g) Financial capability;

(h) The price bid; and

(i) Such other information relevant to a decision to award the contract.

(3) A Washington bidder is a bidder who:

(a) Holds a certificate of registration by the state department of labor and industries;

(b) Submits a bid under the name appearing on the certificate of registration; and

(c) Has maintained a place of business within the state for a period of six months immediately preceding the date of the bid.

NEW SECTION. Sec. 13. Sections 1 through 9 of this act are each added to chapter 47.28 RCW.

NEW SECTION. Sec. 14. Section 47.28.070, chapter 13, Laws of 1961, section 39, chapter 145, Laws of 1967 ex. sess., section 169, chapter 7, Laws of 1984 and RCW 47.28.070 are each repealed.