HOUSE OF REPRESENTATIVES

                      Olympia, Washington

Bill Analysis      Bill No.  HB 1653

Raising the limit on agency direct buy authority without competitive bids.

Brief Title                              Hearing Date: 2/17/99

Reps. Kenney and Miloscia                  Staff: Steve Lundin

Sponsor(s)                          State Government Committee

                                              Phone:  786-7127

BACKGROUND:

State agencies and institutions purchase personal property following three different procedures, depending on the value of the items that are purchased, as follows:

oSmall-valued purchases may be made without competitive bids based upon buyer experience and knowledge of the market in achieving maximum quality at minimum cost, if the value of items purchased does not exceed $400.

oMedium-valued purchases may be made using an informal competitive procedure where telephone or written quotations are secured from at least three vendors.  At least one quotation must be solicited from a certified minority and a certified women-owned vendor.  This procedure may be used by state agencies when the value of the items that are purchased are from $400 to $35,000 and may be used by institutions of higher education for purchases between $2,500 and $35,000.

oHigh-valued purchases of items must be made using a formal sealed bidding procedure.  This procedure must be used by state agencies for purchasing items with a value of more than $35,000 and by institutions of higher education for purchasing items with a value of $35,000 or more.

Commencing on July 1, 1995, the Office of Financial Management adjusts these dollar values once every other year using an appropriate federal inflationary index, with amounts rounded up to the nearest hundred dollars.  However, the $400 limit on the maximum value of items that may be purchased by state agencies without using any procedure may not be increased to more than $800.

Certain exceptions are made from these purchasing procedures, such as emergency purchases, purchases clearly and legitimately limited to a single source of supply, purchases involving special facilities, services, or market conditions.

SUMMARY:

The minimum dollar value of purchases that may be made by state agencies and institutions of higher education, without using any procedure, is increased from $400 to $3000 and the limitation on how much this minimum figure may be adjusted for inflation is eliminated.

The minimum dollar value of a purchase that may be made using the informal competitive bidding procedure, where at least three quotations must be solicited from vendors, is increased from $400 to $3,000 for state agencies and from more than $2,500 to more than $3,000 for institutions of higher education.

FISCAL NOTE:  Not requested.

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