PUBLIC WORKS PROCUREMENT

1. PUBLIC WORKS PROCUREMENT Department of Enterprise Services

2. Project Overview PUBLIC WORKS PROCUREMENT • ESB 6074 (Capital Appropriations Bill) Section 1022: The Department of Enterprise Services is directed to conduct a review of the state’s public works procurement process and provide a report to the legislature by December 15, 2012. The report is to include procurement reform recommendations and draft legislation needed to implement the recommendations. • Project must include three state agencies including: • One natural resource agency (Department of Fish and Wildlife) • One research university (University of Washington) • One general government agency (Department of Enterprise Services) • Report provides historical data on: • Use of change orders • Use of Job order contracting • How competitive public works contracts are advertised • Contract closeout procedures • Study focuses on the state’s current PW procurement processes • State transportation project procurement will not be included • Procurement processes of other municipalities, special districts, etc. are not be addressed

3. Thank You!! PUBLIC WORKS PROCUREMENT • Thank you to all the individuals who participated in preliminary interviews and, particularly to the members of our Advisory Team:

4. ISSUES AND RECOMMENDATIONS PUBLIC WORKS PROCUREMENT PROJECT DEFINITION: • Issue: The Alternative Public Works Statute will expire in 2013 unless the Legislature acts to reauthorize. • We recommend reauthorization of the Alternative Public Works statute, including Job Order Contracting, and we support the modifications recommended by CPARB. • Issue: Other alternative procurement methods continue to emerge and may represent positive innovations in public works. • When there is sufficient evidence that new alternative delivery methods may be effective, we believe the framework we have in place through CPARB has proven successful and should continue to be used. PROJECT DESIGN: • Issue: A/E firms are concerned that some public agencies do not comply with current statutory selection requirements – qualifications-based selection. • The state should make training on the appropriate use of QBS a core component of a basic set of staff public works procurement training curriculum.

5. ISSUES AND RECOMMENDATIONS PUBLIC WORKS PROCUREMENT BIDDING: • Issue: Some public agencies feel the cost of print advertising is too high today. And, contractors want a single, web-based location where they can go to find all available public bidding opportunities. • No modifications to the advertising statutes are recommended. Carefully monitor the aggregate Website being developed by the state’s newspaper industry. • Issue: Concerns have been raised that agencies may manipulate the advertising process to hire a preferred contractor. • Owners and contractors agree this is not in keeping with current statutes and the state’s competitive bidding environment. State agency management should be actively monitoring staff to ensure that proper procurement standards and practices are being met. • Issue: State construction offices would like explicit statutory authority to prequalify contractors on certain projects, but contractors are concerned that prequalification could introduce an unacceptable subjectivity to the selection process. • No recommendation at this time.

6. ISSUES AND RECOMMENDATIONS PUBLIC WORKS PROCUREMENT BIDDING (continued): • Issue: Some states have some authority to prevent a contractor from bidding on all contracts for a specified period of time if the contractor has committed certain criminal or unlawful acts. • Recommend the Legislature authorize the director of DES to debar public works contractors for criminal or otherwise illegal conduct. This debarment authority should extend only to state public works procurement, except transportation which has debarment authority under a separate statutory authority. • Issue: A number of states have started using electronic bidding in public works procurement because it has the potential to reduce the time and cost of bidding processes. • State agencies should be authorized to conduct public works bidding processes electronically. • We recommend that electronic signatures be authorized and deemed presumptively valid in court.

7. ISSUES AND RECOMMENDATIONS PUBLIC WORKS PROCUREMENT BIDDING (continued): • Issue: Creating expanded opportunities for minority-, women-, and veteran-owned businesses to participate in public works projects has been a long-standing challenge. • Major state construction offices such as DES, the UW, and WSU should maintain robust outreach programs, and possible program components are provided. CONSTRUCTION MANAGEMENT: • Issue: While change orders are a fact of life in construction, because they modify an existing contract change orders do not get the same public scrutiny as a procurement process and may be used inappropriately. • State construction offices should continue to implement industry best practices related to change order management, including periodic review of change orders across the agency’s portfolio of projects.

8. ISSUES AND RECOMMENDATIONS PUBLIC WORKS PROCUREMENT PROJECT CLOSEOUT: • Issue: The project close-out process in place today needs to be reviewed to determine whether modifications to our current procedures and processes meet our needs in today’s complex construction environment. • A multi-disciplinary task force should be tasked with reviewing the existing close-out process and make recommendations regarding improvements to procedures, incentives, and project budgeting. OTHER ISSUES: • Best practices, training and transparency: DES, as the state’s construction office, should take the lead in convening all state construction teams and industry partners to regularly share information, and to develop and disseminate to all state agencies technical advisories that provide guidelines for state construction that adhere to industry best practices. • Consolidating Public Works Statutes: Beyond the scope of the study.