Z-0634.1  _______________________________________________

 

                          HOUSE BILL 1093

          _______________________________________________

 

State of Washington      54th Legislature     1995 Regular Session

 

By Representatives K. Schmidt, Johnson, Romero and Wolfe; by request of Department of General Administration

 

Read first time 01/12/95.  Referred to Committee on Transportation.

 

Revising bidding procedures for public agencies.



    AN ACT Relating to streamlining purchasing provisions for state agencies including Washington state ferries; amending RCW 43.19.1906, 43.19.1911, and 47.60.140; and repealing RCW 47.60.651, 47.60.653, 47.60.655, 47.60.657, 47.60.659, and 47.60.661.

 

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

 

    Sec. 1.  RCW 43.19.1906 and 1994 c 300 s 1 are each amended to read as follows:

    Insofar as practicable, all purchases ((and sales)) of materials, supplies, equipment, and services shall be based on a competitive ((bids)) process, and a formal sealed invitation for bid procedure ((shall)), or a request for proposal process may be used ((as standard procedure)) for all purchases and contracts ((for purchases and sales)) executed by the state purchasing and material control director ((and)) under the powers granted by RCW 43.19.190 through 43.19.1939.  This requirement also applies to purchases and contracts ((for purchases and sales)) executed by agencies((, including educational institutions,)) under any delegated authority granted in accordance with provisions of RCW 43.19.190 ((or)), and to educational institutions under RCW 28B.10.029.  ((However,))

    A formal sealed invitation for bid shall include the specifications or purchase description for the services or items to be procured and the bid evaluation factors and criteria as described in RCW 43.19.1911(1).

    A request for proposal solicitation shall include a functional description of the needs and requirements of the state and the significant proposal evaluation factors and criteria as described in RCW 43.19.1911(1).

    A formal ((sealed bidding)) competitive process is not necessary for:

    (1) Emergency purchases made ((pursuant to RCW 43.19.200 if the sealed bidding procedure would prevent or hinder the emergency from being met appropriately)) in response to unforeseen circumstances beyond the control of the agency that present a real, immediate, and extreme threat to the proper performance of essential functions or that may reasonably be expected to result in excessive loss or damage to property, bodily injury, or loss of life.  The purchase file shall contain a written description of the emergency and the circumstances leading up to the emergency and an explanation of why the circumstances required an emergency purchase;

    (2) Purchases not exceeding ((thirty-five thousand dollars,)) the sealed bid limitation or subsequent limits ((as calculated by the office of financial management)) established pursuant to subsection (8) of this section:  PROVIDED, That the state director of general administration shall establish procedures to assure that purchases made by or on behalf of the various state agencies shall not be made so as to avoid the ((thirty-five thousand dollar)) sealed bid limitation((, or subsequent bid limitations as calculated by the office of financial management)):  PROVIDED FURTHER, That the state purchasing and material control director is authorized to reduce the ((formal)) sealed bid ((limits of thirty-five thousand dollars, or subsequent limits as calculated by the office of financial management,)) limit to a lower dollar amount for purchases by individual state agencies if considered necessary to maintain full disclosure of competitive procurement or otherwise to achieve overall state efficiency and economy in purchasing and material control.  Quotations from ((four)) two thousand five hundred dollars to thirty-five thousand dollars, or subsequent limits ((as calculated by the office of financial management)) established pursuant to subsection (8) of this section, shall be secured from at least three vendors to assure establishment of a competitive price and may be obtained by telephone or written quotations, or both.  The agency shall invite at least one quotation each from a certified minority and a certified women-owned vendor who shall otherwise qualify to perform such work.  Immediately after the award is made, the bid quotations obtained shall be recorded and open to public inspection and shall be available by telephone inquiry.  A record of competition for all such purchases from ((four)) two thousand five hundred dollars to thirty-five thousand dollars, or subsequent limits ((as calculated by the office of financial management)) established pursuant to subsection (8) of this section, shall be documented for audit purposes.  Purchases up to ((four)) two thousand five hundred dollars may be made without competitive bids based on buyer experience and knowledge of the market in achieving maximum quality at minimum cost((:  PROVIDED, That this four hundred dollar direct buy limit without competitive bids may be increased incrementally as required to a maximum of eight hundred dollars with the approval of at least ten of the members of the state supply management advisory board, if warranted by increases in purchasing costs due to inflationary trends));

    (3) Purchases which are clearly and legitimately limited to a single source of supply and purchases involving special facilities, services, or market conditions, in which instances the purchase price may be best established by direct negotiation;

    (4) Purchases of insurance and bonds by the risk management office under RCW 43.19.1935;

    (5) Purchases and contracts for vocational rehabilitation clients of the department of social and health services:  PROVIDED, That this exemption is effective only when the state purchasing and material control director, after consultation with the director of the division of vocational rehabilitation and appropriate department of social and health services procurement personnel, declares that such purchases may be best executed through direct negotiation with one or more suppliers in order to expeditiously meet the special needs of the state's vocational rehabilitation clients;

    (6) Purchases by universities for hospital operation or biomedical teaching or research purposes and by the state purchasing and material control director, as the agent for state hospitals as defined in RCW 72.23.010, and for health care programs provided in state correctional institutions as defined in RCW 72.65.010(3) and veterans' institutions as defined in RCW 72.36.010 and 72.36.070, made by participating in contracts for materials, supplies, and equipment entered into by nonprofit cooperative hospital group purchasing organizations;

    (7) Purchases by institutions of higher education not exceeding thirty-five thousand dollars or subsequent limits established pursuant to subsection (8) of this section:  PROVIDED, That for purchases between two thousand five hundred dollars and thirty-five thousand dollars or subsequent limits established pursuant to subsection (8) of this section quotations shall be secured from at least three vendors to assure establishment of a competitive price and may be obtained by telephone or written quotations, or both.  For purchases between two thousand five hundred dollars and thirty-five thousand dollars or subsequent limits established pursuant to subsection (8) of this section, each institution of higher education shall invite at least one quotation each from a certified minority and a certified women-owned vendor who shall otherwise qualify to perform such work.  A record of competition for all such purchases made from two thousand five hundred to thirty-five thousand dollars or subsequent limits established pursuant to subsection (8) of this section shall be documented for audit purposes; and

    (8) Beginning on July 1, 1995, and on July 1 of each succeeding odd-numbered year, the dollar limits specified in this section shall be adjusted as follows:  The office of financial management shall calculate such limits by adjusting the previous biennium's limits by the appropriate federal inflationary index reflecting the rate of inflation for the previous biennium.  Such amounts shall be rounded to the nearest one hundred dollars.

 

    Sec. 2.  RCW 43.19.1911 and 1989 c 431 s 60 are each amended to read as follows:

    (1) When purchases are made through ((competitive bidding)) a formal sealed invitation for bid procedure, the contract shall be ((let)) awarded to the lowest responsible and responsive bidder, subject to any preferences provided by law to and for Washington products and vendors ((and)) pursuant to RCW 43.19.704 or for recycled materials or products pursuant to chapter 43.19A RCW, and taking into consideration the quality of the articles proposed to be supplied, their conformity with specifications, the purposes for which required, and the times of delivery:  PROVIDED, That the state may reject any and all bids.  Whenever ((there is reason to)) the state believes that the lowest ((acceptable)) responsible and responsive bid is not the best price obtainable, ((all bids may be rejected and)) the division of purchasing may call for new bids or enter into direct negotiations to achieve the best possible price.  Each bid with the name of the bidder shall be entered of record and each record, with the successful bid indicated, shall, after ((letting)) notice of ((the)) contract award, be open to public inspection.  In determining "lowest responsible and responsive bidder", in addition to price, the following elements ((shall)) may be given consideration, at the discretion of the purchaser:

    (((1))) (a) The ability, capacity, and skill of the bidder to perform the contract or provide the service required;

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

    (((3))) (c) Whether the bidder can perform the contract within the time specified;

    (((4))) (d) The quality of performance of previous contracts or services;

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

    (((6))) (f) Objective, measurable criteria defined in the invitation for bid to be used at the discretion of the purchaser.  These criteria may include but are not limited to items such as discounts, delivery costs, maintenance services costs, installation costs, transportation costs, life cycle cost, and any other factors that may affect the bid price; and

    (g) Such other information as may be secured having a bearing on the decision to award the contract((:  PROVIDED, That in considering bids for purchase, manufacture, or lease, and in determining the "lowest responsible bidder," whenever there is reason to believe that applying the "life cycle costing" technique to bid evaluation would result in lowest total cost to the state, first consideration shall be given by state purchasing activities to the bid with the lowest life cycle cost which complies with specifications.  "Life cycle cost" means the total cost of an item to the state over its estimated useful life, including costs of selection, acquisition, operation, maintenance, and where applicable, disposal, as far as these costs can reasonably be determined, minus the salvage value at the end of its estimated useful life.  The "estimated useful life" of an item means the estimated time from the date of acquisition to the date of replacement or disposal, determined in any reasonable manner.  Nothing in this section shall prohibit any state agency, department, board, commission, committee, or other state-level entity from allowing for preferential purchase of products made from recycled materials or products that may be recycled or reused)), at the discretion of the purchaser.

    (2) The request for proposal shall contain the significant factors, including price, to be considered in evaluating the proposals received and the relative weight to be given such factors.  Factors that may be considered in evaluating proposals include but are not limited to:  Maintainability, reliability, commonality, performance levels, life cycle cost, public/private partnerships, research and development capability, technological superiority, and the criteria listed in subsection (1) (a) through (g) of this section.  When purchases are made through a request for proposal process, proposals received shall be evaluated based on the evaluation factors set forth in the request for proposal.  No criteria may be used in evaluating a proposal that is not listed in the request for proposal.  The purchaser may reject any and all proposals received.  If the proposals are not rejected, the award shall be made to the proposer whose proposal is most advantageous to the purchaser, considering the evaluation factors set forth in the request for proposal.

    (3) A life cycle cost analysis  may, in the sole discretion of the purchaser, be used in evaluating the factors in responses to an invitation for bid or a request for proposal process.

 

    Sec. 3.  RCW 47.60.140 and 1987 c 69 s 1 are each amended to read as follows:

    (1) The department is empowered to operate such ferry system, including all operations, whether intrastate or international, upon any route or routes, and toll bridges as a revenue-producing and self-liquidating undertaking.  The department has full charge of the construction, rehabilitation, rebuilding, enlarging, improving, operation, and maintenance of the ferry system, including toll bridges, approaches, and roadways incidental thereto that may be authorized by the department, including the collection of tolls and other charges for the services and facilities of the undertaking.  The department has the exclusive right to enter into leases and contracts for use and occupancy by other parties of the concessions and space located on the ferries, wharves, docks, approaches, and landings, but, except as provided in subsection (2) of this section, no such leases or contracts may be entered into for more than ((five years, nor without public advertisement for bids as may be prescribed by the department.  However, except as provided in subsection (2) of this section, the Colman Dock facilities may be leased for a period not to exceed)) ten years, nor without a competitive contract process, except as otherwise provided in this section.  The competitive process shall be either an invitation for bids (IFB) or a request for proposals (RFP) process.  The department has the sole discretion to select the actual contract process used for any such contract.

    (2) As part of a joint development agreement under which a public or private developer constructs or installs improvements on ferry system property, the department may lease all or part of such property and improvements to such developers for that period of time, not to exceed fifty-five years, or not to exceed thirty years for those areas located within harbor areas, which the department determines is necessary to allow the developer to make reasonable recovery on its initial investment.  Any lease entered into as provided for in this subsection that involves state aquatic lands shall conform with the Washington state Constitution and applicable statutory requirements as determined by the department of natural resources.  That portion of the lease rate attributable to the state aquatic lands shall be distributed in the same manner as other lease revenues derived from state aquatic lands as provided in RCW 79.24.580.

 

    NEW SECTION.  Sec. 4.  The following acts or parts of acts are each repealed:

    (1) RCW 47.60.651 and 1987 c 183 s 1;

    (2) RCW 47.60.653 and 1987 c 183 s 2;

    (3) RCW 47.60.655 and 1987 c 183 s 3;

    (4) RCW 47.60.657 and 1987 c 183 s 4;

    (5) RCW 47.60.659 and 1987 c 183 s 5; and

    (6) RCW 47.60.661 and 1987 c 183 s 6.

 


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