(Editor’s Note: AGC members who have concerns about supplemental responsible bidder criteria found in bid notices should contact Rick Slunaker AGC’s Director of Government Affairs at firstname.lastname@example.org or 360-352-5000.)
Let’s say you were bidding on a public works project and the owner intended to select the winning bidder based in part on this supplemental criterion: “Integrity reputation character judgment experience and efficiency of the respondents.” Would you know what the owner meant and how he would judge whether or not you met that criterion?
That line is from a City of Tacoma bid notice and it exemplifies the concern many contractors have had with local agencies’ implementation of the “Responsible Bidder” legislation passed by the Legislature in 2007. Part One of the law helpfully aggregates the mandatory requirements for bidders (eg have a business license and workers’ comp insurance). Part Two gives public agencies the option of using supplemental criteria applicable to the project. Since passage of the bill language has appeared in some local agencies’ bid notices that contractors believe goes too far.
The intent behind the Responsible Bidder law is one most everyone can agree with: public agencies should be able to get the best deal for taxpayers. And some projects require special skills.
“Harborview and the Medical Center at UW use supplemental criteria” says Mike Purdy Contracts Manager for the University of Washington’s Capital Projects Office. “These projects require contractors with experience and the ability to manage work immediately adjacent to occupied patient care areas and to implement critical infection control measures. This work takes a different kind of contractor so there are valid reasons for special criteria.”
According to Rodney Eng Contracts Director for the Seattle City Attorney’s Office and a member of the State’s Capital Projects Advisory Review Board (CPARB) “Most responsible owners recognize the tension of wanting as many bidders as possible but only wanting those who are qualified. Most jobs don’t need supplemental criteria but as they get larger and more complex public owners can’t afford to have a contractor who can’t do them both in terms of the construction itself and in the managing of large numbers of subcontractors. No one likes to be told you can’t do this job especially in this economy but owners have a responsibility to get it right.”
Somewhere between the two extremes of “no contractors can qualify” and “low bid masks questionable abilities” is a happy medium in which the marketplace is open for all qualified bidders. Contractors are concerned that some public agencies don’t calibrate correctly and miss that happy medium using supplemental criteria that unfairly keep contractors out of the process and unnecessarily raise the price of a project.
“I represent a public owner and I believe it is a good tool but contractors and agencies have to agree on a framework” says Purdy. “It has to be fair and equitable for everybody.” In addition to his work with UW Purdy publishes a Public Contracting Blog through which he has discussed his skepticism about some ways the responsible bidder law has been implemented.
AGC is working on a task force gathered by the Utility Contractors Association to help public agencies use supplemental criteria as effectively as possible. Purdy representatives from the American Public Works Association (APWA) and others are also on the task force. Among the concerns raised by contractors are:
Too much subjectivity:
As the City of Tacoma example illustrates some criteria although well intentioned are vague and therefore give agencies a means to unnecessarily disqualify contractors.
“I want the public agency to get the best contractor but I’m not sure the language is allowing them to make the best choice” says Mike Myette Executive Director of the Utility Contractors Association of Washington.
“The intention of the law was clarity” says Purdy. “There can be some subjectivity but criteria should be written in such a way that any reasonable person could look at it and determine if the bidding contractor meets the criteria.”
Sometimes the supplemental criteria include a description of building features and a request that bidders describe their experience with those features. Of course every construction project is different so using supplemental criteria that is overly specific could prevent perfectly capable contractors from bidding on a job.
“Projects that involve say 5000 feet of 12-inch ductile pipe don’t come around very often” says Myette. “So to write that sort of information in the supplemental criteria would bar many quality contractors from the work.”
Dan Absher President of Absher Construction and member of CPARB agrees. “We don’t want owners to carve out such a unique set of criteria that only a certain contractor could apply” he says.
Absher notes that CPARB with its mission to guide policymakers on public works issues and its membership mix of public owners and contactors is the entity to address responsible bidder controversies. CPARB with significant help from UW’s Purdy produced the document Suggested Guidelines for Bidder Responsibility to help public agencies find that happy medium when using supplemental criteria.
Among other things these guidelines suggest that public agencies include elements that may reduce the risk of protests and legal challenges including information about the relevance of the criteria to the project the necessity for the criteria and clarity of the criteria.
Since the guidelines were updated last year there seems to be fewer controversies regarding supplemental criteria but they do exist.
Purdy offers advice to contractors who are concerned about supplemental criteria they find in bid notices. “If a contractor is concerned about criteria used by an agency it should request in writing that the agency change the criteria and get a written not verbal response” Purdy says.
It is possible that the agency may change the language once a concern is brought to its attention.
Purdy says that in addition contractors should bring the issue to the attention of AGC which can collate and funnel concerns to the new task force and to CPARB. “More discussion is needed between contractors and owners” Purdy says. “If we can’t work something out together the frustration level may build and detrimental legislation could be adopted. This would be unfortunate because the responsible bidder concept when implemented appropriately is in the public’s best interests.”