Purchasing and Bidding: Definitions, Exemptions and Auctions
Contents
Purchasing and Bidding
Units of local government in Washington must accomplish projects and purchase goods and services in the course of doing business. Statutes governing purchasing are intended to insure that quality projects, goods and services are purchased at the least cost. Other goals are to reduce, if not eliminate, the impact of favoritism and cronyism in purchasing and to prevent fraud. Competitive bidding, which requires open advertisement to all qualified bidders and public opening of bids, has been determined by the legislature to be the best way to accomplish these goals.
All units of local government may use competitive bidding for purchasing everything from paper clips to multi-million dollar bridges and any kind of material, supplies or equipment. Unfortunately, following competitive bid laws is often counterproductive for small projects and material, supplies or equipment purchases and can be more expensive and time consuming. Recognizing this problem, the state legislature has, over the years, established and modified dollar amounts (commonly referred to as bid limits) below which competitive bids are not required for public works projects and equipment or supply purchases and has provided exemptions and alternatives to the competitive bidding process.
Local government purchases are generally categorized as:
- services
- equipment, material and supply purchases
- public works contracts.
Requirements for purchasing are different for each of these three categories, as shown in the Purchasing and Bidding Chart for Local Agencies in Washington State (
). Also note the Purchasing in Washington Counties (Flow Chart). (
) This Web page presents information on purchasing for all three categories, either directly or by reference to one or more of these documents:
- Washington State Small Works Roster Manual (small public works contracts)
- Washington State Model Design and Construction Management Manual (public works contracts)
- The Bidding Book for Washington Cities and Towns, Report No. 52, Revised () (overview, but also bidding and award of public works contracts)
- The Bidding Book for Washington Counties, Report No. 56 Revised, November 2009 ()
Definitions
Descriptions and definitions of key purchasing and bidding terms used in this and related Web documents are as follows:
Bid Limits (BL)- Dollar amounts below which competitive bids or the small works roster process are not required for the purchase of equipment, supplies or materials or for public works projects.
Competitive Bids (CB) - A process through which there is competition following advertisement in designated legal newspapers and other media for equipment, supply, material and public works contracts, open to all suppliers, vendors, and contractors, and in which price is the primary basis for consideration and contract award.
Small Works Roster (SWR) - A process through which there is competition following notification to some or all public works contractors who have requested placement on a roster kept by the local government agency, in which price is the primary basis for consideration and contract award.
Small Public Works Contracts (SPWC) - A process through which written or electronic quotes are solicited from contractors for public works contracts with total estimated costs below the bid limits following notification as established by local agency policies, if any, and in which price is the primary basis for consideration and contract award.
Quotes (Q) - A process through which written or electronic quotes are solicited from suppliers and vendors for equipment, supply and material contracts with total estimated costs below the bid limits following notification as established by local agency policies, if any, and in which price is the primary basis for consideration and contract award.
Competitive Negotiations (CN) - A process through which there is competition following advertisements in designated legal newspapers and other media for equipment, supply, material and public works contracts, open to suppliers, vendors and contractors, in which factors other than price may be the primary basis for consideration and contract award.
Vendor Lists (VL) - A process in which there is competition for equipment and supply contracts through notification to some or all suppliers and vendors who have requested placement on a roster kept by the local government agency in which price is the primary basis for consideration and contract award.
Public Agency Work or Day Labor Limits - Limits set by the Legislature on the amount of public works that can be accomplished using the agency's own work force or by hiring day laborers. (Note: Day labor as used in the County road fund statutes refers specifically to the County's own forces.) Limits are expressed as specific dollar amounts for single or multiple craft projects and/or as percentages of the public works or road fund budgets.
Services - Services are non-public works activities requiring labor, equipment, supplies and materials for which an agency contracts, on a periodic, routine basis. Professional services are defined as activities such as consulting that have a primarily intellectual final product.
Public Works - RCW 39.04.010 defines the term "public work" to include all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality, or which is by law a lien or charge on any property therein.
Exemptions
In the 1998 legislative session a new section, RCW 39.04.280, was added to Ch. 39.04 RCW which consolidates and provides uniform exemptions to municipal competitive bidding requirements when awarding contracts for public works and purchases. Competitive bidding procedures may now be waived by resolution of the governing body of the municipality for:
- purchases that are clearly and legitimately limited to a single (sole) source of supply;
(Note the City of Everett Purchasing Policy Excerpt: Section 6.0 - Sole Source Procurements) - purchases involving special facilities or market conditions;
- purchases in the event of an emergency;
- purchases of insurance or bonds; and
- public works contracts in the event of an emergency.
Competitive bidding procedures may be waived under the above circumstances by adopting either a resolution at the time of contracting or by written policies before hand. A resolution must state the factual basis for the exception. If written policies are used to waive competitive bidding requirements, the contract and the factual basis for the exception must be recorded and open to public inspection immediately after the contract is awarded.
An emergency is defined, uniformly for all classes and types of municipalities, as unforeseen circumstances beyond the control of the municipality that either: (1) present a real, immediate threat to the proper performance of essential functions; or (2) will likely result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken.
This new section is intended to supplement and not to limit the current powers of any municipality to provide exemptions from competitive bidding requirements. Note that statutes governing a specific type of municipality may also include other exemptions from competitive bidding requirements.
Auctions
RCW 39.30.045 allows local governments to purchase any supplies, equipment, or materials at auctions conducted by the government of the United States or any agency thereof, any agency of the state of Washington, any municipality or other government agency, or any private party without being subject to public bidding requirements if the items can be obtained at a competitive price. The governing body should either pre-authorize the purchase or pass a resolution sanctioning it at the next legislative board meeting.
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