AN ACT Relating to prequalification of highway contractors; amending RCW 47.28.030, 47.28.050, 47.28.075, 18.27.090, 39.06.010, and 47.28.170; reenacting and amending RCW 42.17.310; 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, and no contract for the construction, improvement, or repair of any 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 which 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 is 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 for the department of transportation including the timely submission by the contractor of final contract voucher certifications and other documents required for the final acceptance of contracts;

(5) A satisfactory record of cooperation with the owner in the performance of previous contracts;

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

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

(8) Such other qualifications and eligibility to receive a contract award as may be required under applicable laws and regulations.

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 questionnaire form supplied by the department and sworn to before a notary public or other person authorized to take acknowledgment of deeds. 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, employers, 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 finds necessary. If it finds that the applicant is qualified in accordance with the rules as 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 the 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 specific 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 new or supplemental questionnaire and financial statement 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 or suspend a prequalification previously approved, all in accordance with the rules adopted under section 2 of this act.

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 or suspended, 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 ten days after mailing unless within such time the contractor serves upon the state construction engineer of the department 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.

Sec. 9. Section 47.28.030, chapter 13, Laws of 1961 as last amended by section 1, chapter 194, Laws of 1984 and RCW 47.28.030 are each amended to read as follows:

A state highway shall be constructed, altered, repaired, or improved, and improvements located on property acquired for right of way purposes may be repaired or renovated pending the use of such right of way for highway purposes, by contract or state forces. The work or portions thereof may be done by state forces when the estimated costs thereof is less than thirty thousand dollars: PROVIDED, That when delay of performance of such work would jeopardize a state highway or constitute a danger to the traveling public, the work may be done by state forces when the estimated cost thereof is less than fifty thousand dollars. When the department of transportation determines to do the work by state forces, it shall enter a statement upon its records to that effect, stating the reasons therefor. To enable a larger number of small businesses, and minority, and women contractors to effectively compete for highway department contracts, the department may adopt rules providing for bids and award of contracts for the performance of work, or furnishing equipment, materials, supplies, or operating services whenever any work is to be performed and the engineer's estimate indicates the cost of the work would not exceed fifty thousand dollars. The rules adopted under this section:

(1) Shall provide for competitive bids to the extent that competitive sources are available except when delay of performance would jeopardize life or property or inconvenience the traveling public; and

(2) Need not require the furnishing of a bid deposit nor a performance bond, but if a performance bond is not required then progress payments to the contractor may be required to be made based on submittal of paid invoices to substantiate proof that disbursements have been made to laborers, materialmen, mechanics, and subcontractors from the previous partial payment; and

(3) May establish prequalification standards and procedures as an alternative to those set forth in ((~~RCW 47.28.070~~)) sections 1 through 8 of this 1987 act, but the prequalification standards and procedures under ((~~RCW 47.28.070~~)) sections 1 through 8 of this 1987 act shall always be sufficient.

The department of transportation shall comply with such goals and rules as may be adopted by the office of minority and women's business enterprises to implement chapter 39.19 RCW with respect to contracts entered into under this chapter. The department may adopt such rules as may be necessary to comply with the rules adopted by the office of minority and women's business enterprises under chapter 39.19 RCW.

Sec. 10. Section 47.28.050, chapter 13, Laws of 1961 as last amended by section 16, chapter 120, Laws of 1983 and RCW 47.28.050 are each amended to read as follows:

Except as may be provided by rules and regulations adopted under RCW 47.28.030 as now or hereafter amended the department of transportation shall publish a call for bids for the construction of the highway according to the maps, plans, and specifications, once a week for at least two consecutive weeks, next preceding the day set for receiving and opening the bids, in not less than one trade paper of general circulation in the state. The call shall state the time, place, and date for receiving and opening the bids, give a brief description of the location and extent of the work, and contain such special provisions or specifications as the department deems necessary. Bid proposals upon any construction or improvement of any state highway shall be made only upon contract proposal forms supplied by the department. When necessary to implement chapter 39.19 RCW and the rules adopted to implement that chapter, the department shall include in its call for bids provisions or specifications requiring bidders to comply with chapter 39.19 RCW and the rules adopted to implement it: PROVIDED, That when the estimated cost of any contract to be awarded is less than fifty thousand dollars, the call for bids need only be published in at least one paper of general circulation in the county where the major part of the work is to be performed: PROVIDED FURTHER, That when the estimated cost of a contract to be awarded is seven thousand five hundred dollars or less, including the cost of materials, supplies, engineering, and equipment, the department of transportation need not publish a call for bids: PROVIDED FURTHER, That after a bid call has been advertised for two consecutive weeks it may be postponed and the bids opened one week later.

Sec. 11. Section 31, chapter 1, Laws of 1973 as last amended by section 7, chapter 276, Laws of 1986 and by section 25, chapter 299, Laws of 1986 and RCW 42.17.310 are each reenacted and 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 (i) be prohibited to such persons by RCW 82.32.330 or (ii) violate the taxpayer's right to privacy or 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 1987 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.

(o) Financial and commercial information and records supplied by private persons pertaining to export services provided pursuant to chapter 53.31 RCW.

(p) Financial disclosures filed by private vocational schools under chapter 28C.10 RCW.

(2) Except for information described in subsection (1)(c)(i) of this section and confidential income data exempted from public inspection pursuant to RCW 84.40.020, 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. 12. 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 1987 act.

Sec. 13. Section 2, chapter 25, Laws of 1974 ex. sess. as last amended by section 1, chapter 4, Laws of 1983 and RCW 18.27.090 are each amended to read as follows:

This chapter shall not apply to:

(1) An authorized representative of the United States government, the state of Washington, or any incorporated city, town, county, township, irrigation district, reclamation district, or other municipal or political corporation or subdivision of this state;

(2) Officers of a court when they are acting within the scope of their office;

(3) Public utilities operating under the regulations of the utilities and transportation commission in construction, maintenance, or development work incidental to their own business;

(4) Any construction, repair, or operation incidental to the discovering or producing of petroleum or gas, or the drilling, testing, abandoning, or other operation of any petroleum or gas well or any surface or underground mine or mineral deposit when performed by an owner or lessee;

(5) The sale or installation of any finished products, materials, or articles of merchandise which are not actually fabricated into and do not become a permanent fixed part of a structure;

(6) Any construction, alteration, improvement, or repair of personal property;

(7) Any construction, alteration, improvement, or repair carried on within the limits and boundaries of any site or reservation under the legal jurisdiction of the federal government;

(8) Any person who only furnished materials, supplies, or equipment without fabricating them into, or consuming them in the performance of, the work of the contractor;

(9) Any work or operation on one undertaking or project by one or more contracts, the aggregate contract price of which for labor and materials and all other items is less than five hundred dollars, such work or operations being considered as of a casual, minor, or inconsequential nature. The exemption prescribed in this subsection does not apply in any instance wherein the work or construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made into contracts of amounts less than five hundred dollars for the purpose of evasion of this chapter or otherwise. The exemption prescribed in this subsection does not apply to a person who advertises or puts out any sign or card or other device which might indicate to the public that he is a contractor, or that he is qualified to engage in the business of contractor;

(10) Any construction or operation incidental to the construction and repair of irrigation and drainage ditches of regularly constituted irrigation districts or reclamation districts; or to farming, dairying, agriculture, viticulture, horticulture, or stock or poultry raising; or to clearing or other work upon land in rural districts for fire prevention purposes; except when any of the above work is performed by a registered contractor;

(11) An owner who contracts for a project with a registered contractor;

(12) Any person working on his own property, whether occupied by him or not, and any person working on his residence, whether owned by him or not but this exemption shall not apply to any person otherwise covered by this chapter who constructs an improvement on his own property with the intention and for the purpose of selling the improved property;

(13) Owners of commercial properties who use their own employees to do maintenance, repair, and alteration work in or upon their own properties;

(14) A licensed architect or civil or professional engineer acting solely in his professional capacity, an electrician licensed under the laws of the state of Washington, or a plumber licensed under the laws of the state of Washington or licensed by a political subdivision of the state of Washington while operating within the boundaries of such political subdivision. The exemption provided in this subsection is applicable only when the licensee is operating within the scope of his license;

(15) Any person who engages in the activities herein regulated as an employee of a registered contractor with wages as his sole compensation or as an employee with wages as his sole compensation;

(16) Contractors on highway projects who have been prequalified as required by ((~~chapter 13 of the Laws of 1961, RCW 47.28.070~~)) sections 1 through 8 of this 1987 act, with the department of transportation to perform highway construction, reconstruction, or maintenance work.

Sec. 14. Section 3, chapter 70, Laws of 1967 as amended by section 43, chapter 7, Laws of 1984 and RCW 39.06.010 are each amended to read as follows:

No agency of the state or any of its political subdivisions may execute a contract with any contractor who is not registered or licensed as may be required by the laws of this state other than contractors on highway projects who have been prequalified as required by ((~~RCW 47.28.070~~)) sections 1 through 8 of this 1987 act, with the department of transportation to perform highway construction, reconstruction, or maintenance.

Sec. 15. Section 1, chapter 89, Laws of 1971 ex. sess. as amended by section 175, chapter 7, Laws of 1984 and RCW 47.28.170 are each amended to read as follows:

(1) Whenever the commission finds that as a consequence of accident, natural disaster, or other emergency, an existing state highway is in jeopardy or is rendered impassible in one or both directions and the commission further finds that prompt reconstruction, repair, or other work is needed to preserve or restore the highway for public travel, the commission may authorize the department to obtain at least three written bids for the work without publishing a call for bids and award a contract forthwith to the lowest responsible bidder.

The department shall notify any association or organization of contractors filing a request to regularly receive notification. Notification to an association or organization of contractors shall include: (a) The location of the work to be done; (b) the general anticipated nature of the work to be done; and (c) the date determined by the department as reasonable in view of the nature of the work and emergent nature of the problem after which the department will not receive bids.

(2) Whenever the commission finds it necessary to protect a highway facility from imminent damage or to perform emergency work to reopen a highway facility, the commission may authorize the department to contract for such work on a negotiated basis not to exceed force account rates for a period not to exceed thirty working days.

(3) When the engineer's estimate of the cost of work authorized in either subsections (1) or (2) of this section is less than one hundred thousand dollars, the secretary may make findings as provided hereinabove, and pursuant thereto the department may award contracts as authorized by this section.

(4) Any person, firm, or corporation awarded a contract for work must be prequalified pursuant to ((~~RCW 47.28.070~~)) sections 1 through 8 of this 1987 act and may be required to furnish a bid deposit or performance bond.

NEW SECTION. Sec. 16. Sections 1 through 8 of this act are each added to chapter 47.28 RCW.

NEW SECTION. Sec. 17. 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.