HOUSE BILL REPORT

HB 186

BYRepresentatives Haugen, Brough, Nutley, May, Hine, L. Smith, Zellinsky, Braddock and Crane

Raising amounts over which public contracts must be sent out for competitive bids.

House Committe on Local Government

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (12)

     Signed by Representatives Haugen, Chair; Cooper, Vice Chair; Beck, Ferguson, Hine, Madsen, Nealey, Nelson, Nutley, Rayburn, L. Smith and Zellinsky.

Minority Report:     Do not pass.  (1)

     Signed by Representative Bumgarner.

House Staff:Steve Lundin (786-7127)

AS REPORTED BY COMMITTEE ON LOCAL GOVERNMENT MARCH 6, 1987

BACKGROUND:

First-class cities, and code cities with a population of 20,000 or more, may construct public works projects with their own labor forces if the project is of a value of $10,000 or less, or $15,000 of less for water mains.  All public works projects in excess of these amounts must be put out to contract.  Any public works project within these limits may be put out to contract. First-class city public works projects on their electrical generating or distribution systems are not subject to these restrictions.

Second-class cities, third-class cities, towns, and code cities with a population of less than 20,000 may construct public works projects with their own labor forces if the project is of a value of $15,000 or less.  All public works projects in excess of this value must be put out to contract.  Any public works project within this limit may be put out to contract.

Second-class cities, third-class cities, towns, and code cities with a population of less than 20,000 may make purchases of $2,000 or less without using competitive bidding procedures. Purchases of between $2,000 and $4,000 may be made with a modified competitive bidding procedure with prices solicited by telephone or in writing.  Purchases of $4,000 or more must be made through a formal competitive bidding procedure.

SUMMARY:

SUBSTITUTE BILL:  The laws for city and town public works projects and purchasing are changed as follows:

(1)  First-class cities, and code cities with a population of 20,000 or more, may construct public work projects within any year of a value not exceeding ten percent of the average annual value of public works in the last two years and the lesser of the current year's public works budget or the actual amount of public works that year.  If an amount in excess of this amount is performed in any year, the excess amount is subtracted for the succeeding years amount that may be performed by city employees. The exemption from these requirements is retained for public works projects on electrical generating or distribution systems.

(2)  Second-class cities, third-class cities, towns and code cities with a population of less than 20,000 may have their labor forces perform any public works project of a value of $25,000 or less, instead of $15,000 or less.

(3)  Second-class cities, third-class cities, towns, and code cities with a population of less than 20,000 may make purchases of $7,500 or less without competitive bidding instead of $2000 or less, may make purchases between $7,500 and $15,000 with a modified competitive bidding procedure instead of between $2,000 and $4,000, and must make purchases of $15,000 and more by formal competitive bidding instead of $4,000 or more.  Purchases may be made from single source suppliers without formal competitive bidding.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Eliminates all provisions concerning local governments other than cities and towns.  Reduces the percentage and dollar figure for city and town day labor limits.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Stan Finkelstein, Association of Washington Cities; Gary Zarker, City of Seattle; Sam Kinville, Washington State Council of County and City Employees.

House Committee - Testified Against: Luther Carr, private contractor; Dick Ducharme, Utility Contractors Association of Washington; Larry Stevens, National Electrical Contractors Association; Duke Schaub, Associated General Contractors; and Bob Dilger, Washington State Building Trades Association.

House Committee - Testimony For:     These decisions should be made locally.  The issue is how to obtain the lowest costs, not who should do the work.  Flexibility is needed.  Most construction is already contracted out and would continue to be.  These values are artificial, and in real terms reduce every year.  The increases merely keep up with inflation. About 10% of construction work is done by city employees in larger cities anyway, so no net change in work will result.  Some work can be done for less cost by city employees.  Small cities cannot get reasonable bids on may projects.  It costs too much to move personnel and equipment to get reasonable prices in remote cities.  A compromise is close to being consumated.  This is a vehicle that needs to be kept alive so the compromise which will probable be worked out can be enacted.

House Committee - Testimony Against: All construction and maintenance work should be done by private enterprise.  The only changes that should be made are to reduce or eliminate work by public employees.  We may lose jobs. Cost is not the issue.  In all instances private enterprise can do things cheaper than government.  We go any where for jobs.