Public Works Projects. Public work is all work, construction, alteration, repair, or improvement, other than ordinary maintenance, executed at the cost of the state or of any municipality.
 
Every city, county, town, port district, district, or other public agency authorized to execute public work must follow specified requirements for competitive bidding for public works projects. Specific requirements vary by the type of municipality and certain exemptions are provided.
 
State agencies and local governments may create a small works roster of contractors for certain work estimated to cost $350,000 or less. Bids may be solicited from contractors on the appropriate small works roster to assure that a competitive price is established and to award contracts to the lowest responsible bidder.
 
In lieu of the small works roster process, local governments may award a contract for certain public works projects estimated to cost less than $50,000 by soliciting bids from a minimum of three contractors from the appropriate small works roster. State law requires local agencies to award public works contracts to a responsible bidder with the lowest responsive bid, otherwise referred to as the lowest responsible bidder.

2023 Legislative Updates to Local Government Procurement Rules. In 2023, the Legislature passed HB 1621, amending the following provisions governing local procurement rules:

• beginning June 30, 2024, for public utility districts:
  1. the amount for which any work ordered by a PUD commission must be by contract is increased from $50,000 to $150,000 if more than a single craft or trade is involved, or to $75,500 if only a single craft or trade is involved; and
  2. a definition of lowest responsible bidder is added;
• beginning June 30, 2024, for water-sewer districts:
  1. the amount for work for which water-sewer districts must solicit bids and award contracts is increased from $50,000 to $150,000 if more than a single craft or trade is involved, or to $75,500 if only a single craft or trade is involved; 
  2. a water-sewer district may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract; and
  3. a definition of lowest responsible bidder is added;
• beginning June 30, 2024, for first class cities:
  1. a first-class city may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract; and
  2. a definition of lowest responsible bidder is added;
• beginning June 30, 2024, for second-class cities or towns:
  1. the amount for which a second-class city may contract for public works that involve more than one craft or trade without a competitive bidding process is increased from $116,155 to $150,000;
  2. any purchase of supplies, material, or equipment, except for public works improvements, with an estimated cost over $40,000 must be by contract;
  3. any purchase of materials, supplies, or equipment with an estimated cost of less than $50,000 must be made using the process for limited public works projects; and
  4. a second-class city or town may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract; and
• beginning June 30, 2024, for fire protection districts:
  1. the amount for projects and materials for which formal sealed bids are not required is increased from $40,000 to $75,500;
  2. the amount for projects for which the limited public works process may be used is increased from $75,000 to $150,000 if more than a single craft or trade is involved, or to $75,500 if only a single craft or trade is involved;
  3. a fire protection district may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract; and
  4. a definition of lowest responsible bidder is added. 

Capital Projects Advisory Review Board. The Capital Projects Advisory Review Board (CPARB), in the Department of Enterprise Services, provides evaluations of public capital projects construction processes, including the impact of contracting methods on project outcomes, and advises the Legislature on policies related to public-works delivery methods and alternative public-works contracting procedures. In December 2023, CPARB completed its review of the provisions of HB 1621 and distributed the report to the Legislature.

The implementation timeline for certain provisions included in HB 1621 is amended as follows:

• for public utility districts:
  1. until July 1, 2026, the amount for which any work ordered by a PUD commission must be by contract is $150,000 if more than a single craft or trade is involved, or to $75,500 if only a single craft or trade is involved:
     • upon expiration, beginning July 1, 2026, any work ordered must be by contract if greater than $50,000; and
  2. beginning July 1, 2025, a definition of lowest responsible bidder is added;
• for water-sewer districts:
  1. until July 1, 2026, the amount for work for which water-sewer districts must solicit bids and award contracts is $150,000 if more than a single craft or trade is involved, or to $75,500 if only a single craft or trade is involved:
     • upon expiration, beginning July 1, 2026, any work ordered must be by contract and competitive bidding if greater than $50,000;
  2. beginning July 1, 2025, a water-sewer district may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract; and
  3. beginning July 1, 2025, a definition of lowest responsible bidder is added;
• for first class cities:
  1. beginning July 1, 2025, a first-class city may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract; and
  2. beginning July 1, 2025, a definition of lowest responsible bidder is added;
• for second-class cities or towns:
  1. until July 1, 2026, the amount for which a second-class city may contract for public works that involve more than one craft or trade without a competitive bidding process is $150,000:
     • upon expiration, beginning July 1, 2026, work may be by contract or day labor if costs are less than $116,155 if two or more trades are involved, or $75,500 if one trade is involved; and
  2. beginning July 1, 2025, a second-class city or town may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract; and
• for fire protection districts:
  1. until July 1, 2026, a formal sealed bid is not required for projects the amount for projects with costs less than $150,000 if more than a single craft or trade is involved, or to $75,500 if only a single craft or trade is involved:
     • upon expiration, beginning July 1, 2026, formal sealed bidding is not required for contracting for work if costs do not exceed $30,000;
  2. beginning July 1, 2025, a fire protection district may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract; and
  3. beginning July 1, 2025, a definition of lowest responsible bidder is added.

CPARB must review the provisions of this bill and make recommendations to the appropriate committees of the legislature no later than October 31, 2024.

PRO: HB 1621 (2023) was passed unanimously through the Legislature last year but there were some concerns from certain stakeholders, so the bill was delayed until 2026. CPARB did an analysis of the bill and built consensus about the contracting requirements. CPARB assembled a committee and reached unanimous consensus of the requirements reflected in this bill. This bill reflects the threshold levels that area appropriate for each local government. The adjusted thresholds will allow local governments to be nimble and respond to emergency situations if needed. Stakeholders needed a better definition of prudent utility management.

CON: This bill needs to better define prudent utility management. Small fire districts are working to update the complicated legal and policy updates based upon HB 1621. The updates take a lot of time, effort, and resources to implement. This bill would require another quick turnaround for small districts with limited resources to implement. The committee that CPARB put together did not include fire protection districts or water-sewer districts and they did not have formal input into this bill. HB 1621 was passed unanimously and deserves to be implemented before its amended.

PRO: Senator Bob Hasegawa, Prime Sponsor; Brandy DeLange, Association of Washington Cities; Janice Zahn; Keith Michele; Michael Transue, Mechanical Contractors Association of SWestern WA.