HOUSE BILL REPORT

HB 1693

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Bill

Repeals provisions related to terminating and repealing the alternative process as of June 30, 2015, and includes an emergency provision to make this effective immediately.
Adjusts the $5 million cap for using the alternative process for awarding medical construction contracts for inflation.
Requires the University of Washington (UW) to review postselection processes to improve postselection startup of construction activities, prevent delays, and capture potential cost savings.
Requires the UW to provide biennial training and support to help certified minority or certified woman-owned contractors (MWBEs) qualify for subcontracting work, and report on outreach to and participation by the MWBEs.
Requires the Joint Legislative Audit and Review Committee to conduct an evaluation of the alternative process, including any improvement to participation by the MWBEs, and any time and cost savings to the university by December 1, 2019, and every five years thereafter.

Background:

The Legislature created an alternative process in 2010 that allows the University of Washington (UW) to pre-qualify contractors for certain critical patient care facility construction projects. These projects must cost $5 million or less. The alternative process allows the UW to limit distribution of bid solicitations to contractors that have demonstrated their ability to complete complex projects in a patient care environment.

The Legislature enacted the alternative process with a June 30, 2015 termination date under the provisions of Washington's Sunset Law. The Sunset Law requires the responsible organization to develop performance measures and to collect data to demonstrate how well the program is performing. In 2014 the Joint Legislative Audit and Review Committee (JLARC) conducted a performance audit to verify the program's performance in the year preceding the termination date and made recommendations on whether to continue the program. The JLARC recommended that the Legislature continue the alternative process because its use is reducing contracting time, and contractor quality ratings have improved. The report also included three recommendations for the UW, two to improve the timeliness of these projects at Harborview Medical Center, and one to improve tracking the use of minority-owned and woman-owned subcontractors (MWBEs).

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Summary of Bill:

The $5 million cap for using the alternative process for awarding medical construction contracts is adjusted for inflation from the 2015 fiscal year as determined by the Office of Financial Management in the capital budget cost estimating instructions.

The UW must review postselection processes with any entities for which it operates medical and hospital facilities subject to this law, in order to improve postselection startup of construction activities, prevent delays, and capture potential cost savings. The UW must provide at least biennial training and support to help certified MWBEs qualify for subcontracting work on a roster project. The UW must report to the Capital Projects Advisory Review Board a description of outreach to the MWBEs, and a description of participation by the MWBEs as contractors or subcontractors in projects using the alternative process.

The JLARC must conduct an evaluation of the alternative process, including any improvement to participation by the MWBEs, and any time and cost savings to the university by December 1, 2019, and every five years thereafter.

Provisions related to termination and repealing of the alternative process for awarding medical construction contracts are repealed. An emergency provision is included to make the repealer section of the bill take effect June 29, 2015.

Staff Summary of Public Testimony:

(In support) The audits and recommendations by the JLARC should be brought before the Legislature so that the Legislature can act on them. The construction of medical facilities is unique. The UW has a strong commitment to working with the MWBEs in the prequalification process. By maintaining a roster of over 12 contractors, the UW is able to work with these contractors to identify quality subcontractors appropriate for the contract. This process allows the UW to work with a more diverse group of contractors than under a traditional process. The benefit to removing the $5 million cap allows projects to grow with inflation. It is important to remove the sunset to provide assurance that the UW can use the process in the future.

(Opposed) None.

(Information Only) The JLARC reviewed the alternative process as part of the sunset review and provided some recommendations to the Legislature.

Persons Testifying: (In support) Representative Pollet, prime sponsor; Genesee Adkins and Alan Nygaard, University of Washington.

(Information only) Valerie Whitener, Joint Legislative Audit and Review Committee.