WSDOT proposes mandatory small-business and vet-owned subcontracting goals

 

WSDOT recently aired a proposal to have fixed small business and Veteran business enforceable contract goals on all solely state funded projects. The goals would be enforceable as a condition of award of a contract.

AGC expressed several concerns about the proposal to WSDOT, such as the fact that it will incur additional costs for transportation projects even though no evidence has been shown that a problem exists with regard to subcontracting opportunities for small and veteran-owned businesses. Plus, AGC believes the proposal needs to go through proper, public rule-making processes.

Under the proposal, general contractors could receive a multiplied credit for utilizing small businesses that fall into certain categories. For example, small and Veteran businesses that have not worked with WSDOT previously would be credited at five times the actual dollars paid.

The determination of whether or not a firm qualifies as a small business would follow the definition currently in statute, meaning firms are self-certified. Qualified veteran-owned firms are certified by the Department of Veterans Affairs.

The proposal says that prior to award of a contract the contractor shall submit a Small and Veteran’s Business Inclusion Plan. The plan must demonstrate specifically how the contractor will meet the goal. As part of the plan a Good Faith Effort (GFE) may be submitted in lieu of participation in the event the contractor believes they are unable to meet the contract goal in whole or part. The contractor shall not be awarded the project until the plan is approved or a GFE is demonstrated. It also includes a formula for payment of overhead expenses incurred by general contractors in meeting the goals.

Click here to see WSDOT’s proposal. AGC expressed concerns about the proposal in a letter to WSDOT. Click here to view AGC’s response.

For more information, contact AGC Chief Lobbyist Jerry VanderWood, 360.352.5000.