HOUSE BILL REPORT

HB 2584

BYRepresentatives Haugen, Nealey, Nutley, Ferguson, Nelson, Zellinsky, Wood, Phillips and Raiter

Raising public utility district internal job value limits and creating a small works roster.

House Committe on Local Government

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass. (11)

      Signed by Representatives Haugen, Chair; Cooper, Vice Chair; Ferguson, Ranking Republican Member; Horn, Kirby, Nealey, Nelson, Nutley, Phillips, Raiter and Rayburn.

Minority Report:  Do not pass.  (2)

      Signed by Representatives Wolfe and Zellinsky.

House Staff:Steve Lundin (786-7127)

AS REPORTED BY COMMITTEE ON LOCAL GOVERNMENT JANUARY 30, 1990

BACKGROUND:

Public utility districts (PUD's) may choose to have work done by their own employees using equipment of a worth not exceeding $30,000, but not including the value of equipment used as "one unit of a project."  Such a limitation is referred to as a day labor limit.

PUD's are required to use a formal competitive bidding procedure, that involves the publishing of notices requesting the submission of sealed bids, to award contracts for work if the value of the work exceeds $10,000, not including sales taxes.  Such a limitation is referred to as a public works bid limit.

PUD's are required to use a formal competitive bidding procedure, that involves the publishing of notices requesting the submission of sealed bids, to purchase materials, equipment, or supplies if the estimated cost is in excess of $5,000.  Such a limitation is referred to as a purchase bid limit.

However, when an emergency arises endangering the public safety, or threatening property damage, a PUD commission may choose not to conform with these requirements and have its own employees perform the work, award a contract for work without using the formal public works bid limit process, or make purchases without using the formal purchasing bid limit process.

SUMMARY:

SUBSTITUTE BILL:  The day labor limitation for PUD's is increased from $30,000 to $50,000.

PUD's are permitted to use a small works roster process to award contracts for work with an estimated value of less than $100,000.  The small works roster must be revised once a year, and shall consist of all responsible contractors who request to be on the list.  A procedure shall be authorized to secure telephone and/or written quotations from contractors on the small works roster to assure establishing a competitive price and to award the contracts to the lowest responsible bidder.  A good-faith effort shall be made to request quotations from all contractors on the small works roster.

The description of what constitutes an emergency is altered that permits a PUD to disregard day labor limits, public works bid limits, and purchasing bid limits.  The requirement that such an emergency must endanger the public safety or threaten property damage, is altered to an emergency when the public interest or property of the district would suffer material injury or damage by delay associated with formal bidding requirements.  In such instances the PUD must take precautions to secure the lowest possible price practicable under the circumstances.

Additionally, a PUD may waive bidding requirements relating to purchases and negotiate the purchase price directly if, at a public meeting, the commission determines that a particular purchase is limited clearly and legitimately to a single source of supply.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  (1) The new day labor ceiling was reduced from $110,000 to $50,000.  (2) Language is deleted permitting contractors on the small works roster to be prequalified.  (3) During emergencies, when purchasing bid limits may be dispensed with, an attempt must be made to secure the lowest price practicable under the circumstances.  (4) The single source of supply exception for dispensing with formal purchasing bid procedures is limited so that a decision to use this exception must be made in public for each purchase.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Phyllis McGavick and Charlie Earl, Snohomish PUD; and Steve Duncan, Washington Public Utility Districts.

House Committee - Testified Against:      (Original Bill) Larry Stevens, National Electrical Contractors Association; Duke Schaub, Associated General Contractors; and Dick Ducharme, Utility Contractors Association of Washington.

House Committee - Testimony For:    This will keep costs down.  The $30,000 figure is decades old, so an inflation adjustment would make it much more than $50,000.

House Committee - Testimony Against:      This existing language is too complicated and should be changed.  We can't support the original bill without changes.