HOUSE OF REPRESENTATIVES

                      Olympia, Washington

Bill Analysis      Bill No.  HB 1070

Authorizing the general contractor/construction Hearing Date:  1/26/99

manager contracting procedure for school

district capital projects

Brief Title

Reps. Romero and D. Schmidt               Staff:  Steve Lundin

Sponsor(s)                          State Government Committee

                                              Phone:  786-7127

BACKGROUND:

1) Standard procedures to award contracts for public works projects.

Differing procedures are established for state agencies and various local governments to award contracts for public works projects.

Frequently, three different sets of procedural requirements have been established for state agencies and local governments to award public works contracts, depending on the estimated cost of the project and with varying requirements, as follows:

     oAn agency or local government may award contracts for public works projects of a relatively small estimated cost in any manner it chooses.

     oAn agency or local government may award contracts using a small works roster bidding process to award contracts on projects of up to a medium estimated cost.  Under this process a limited number of contractors are contacted and asked to submit bids.  The contract is awarded to the lowest responsible bidder.

oAn agency or local government may award contracts using a formal competitive bidding process normally to award contracts of a higher estimated value, where a notice is published requesting sealed bids and the sealed bids are opened at a designated time and place.  The contract is awarded to the lowest responsible bidder.

2. Alternative public works contracting procedure.

Several different state agencies and local governments have been authorized to use alternative public works contracting procedures to award contracts on certain public works contracts of a very large dollar value.  One alternative procedure is the Adesign-build@ procedure.  Another alternative procedure is the Ageneral contractor/construction manager@ procedure.  Authority to use these alternative procedures terminates on July 1, 2001.   A temporary independent oversight committee is created to review these alternative bidding procedures and recommend changes in contracting laws to the legislature.

The Ageneral contractor/construction manager@ procedure involves the following steps:

oPublishing a notice announcing that the procedure will be used, with opportunity for public comments.

oPublishing a notice calling for bids, that includes a description of the process and relative weight of factors that will be used to evaluate proposals.

oCreation of a committee to evaluate bid proposals that uses this process to select between three and five finalists to submit best and final proposals that include sealed bids for: (1) The percentage amount on the project that the general contractor/contract manager will take as overhead and profit; and (2) the fixed amount for the detailed specified general conditions of work.

oScoring the final and best proposals that are submitted that measures quality and technical merits on a unit price basis and selecting the finalist on the basis of responsiveness and lowest price from among those finalists who are able to produce plans and specifications meeting project requirements.

oDirectly negotiating with the selected contractor to establish a satisfactory maximum allowable construction cost.  Negotiations may be terminated with the selected contractor if an agreement is not reached and opened with the next highest scored firm until an agreement is reached or the process terminated.

oContracts for subcontractors are awarded to the responsible bidder submitting the lowest responsive bid.

The Department of General Administration, University of Washington, Washington State University; every county with a population of greater than 450,000 (King, Pierce, and

Snohomish Counties), every city with a population in excess of 150,000 (Seattle, Tacoma, and Spokane), port districts with a population in excess of 500,000 (Port of Seattle, and Port of Tacoma), and a public facilities district constructing a baseball stadium may use the Ageneral contractor/construction manager@ process on any project with an estimated cost of $10 million or more.  In addition, those entities may also use the  Ageneral contractor/construction manager@ process on several demonstration projects of between $3 million and $10 million in estimated cost.

SUMMARY:

School districts are allowed to use the Ageneral contractor/construction manager@ process to award contracts for public works projects in excess of $10 million that are approved by the school district project review board.  In addition, the school district project review board may allow contracts to be awarded by school districts using the Ageneral contractor/construction manager@ process on up to five demonstration projects with an estimated cost of between $5 million and $10 million.  A single school district may not use this process on more than one demonstration project unless a variety of factors are met, including consideration of the overall demand for the demonstration projects.

The school district project review board is established to approve school district use of the Ageneral contractor/construction manager@ process in awarding contracts for public works projects.  The board consists of eight persons selected by the independent oversight committee and consists of one representative from each of the following groups: (1) The Office of the Superintendent of Public Instruction; (2) the Office of Financial Management; (3) the construction industry; (4) the specialty contracting industry; (5) the design industry; (6) a public body that has used the alternative contracting procedures; (7) school districts with 10,000 or more annual average full-time equivalent students; and (8) school districts with less than 10,000 or more annual average full-time equivalent students.

A variety of factors are established for the school district project review board to authorize school districts to use the Ageneral contractor/construction manager@ process, including past construction activity and an explanation of why the use of this process is in the public interest.  The school district project review board must prepare a report reviewing school district use of this process.

FISCAL NOTE:  Not requested.

EFFECTIVE DATE:  Ninety days after adjournment of session in which bill is passed.