Mike Purdy's Public Contracting Blog

10 Keys to Establishing a Contractor Performance Evaluation Program

noreply@blogger.com (Mike Purdy) — Wed, 25 Jan 2012 10:12:00 PST

It's important for public agencies to provide systematic and consistent feedback to contractors and consultants. Such feedback, if structured and documented properly, can be used when considering future awards.

10 Keys: What does an effective performance evaluation program look like? Here are a ten items for you to consider as you develop or revise a contractor performance evaluation program:

Written Program: Establish an written and objective evaluation program.
Criteria and Form: Use standard evaluation criteria and a standard evaluation form. Evaluation criteria may differ between construction and consultant contracts, or perhaps for different types of construction contracts.
Training: Provide training to your agency staff on how to use the performance evaluation program.
Using Results: Define how the results of the performance evaluations will be used in future award decisions. Will you debar contractors who receive a certain number of poor performance ratings? Will you use the ratings to determine a bidder is not responsible, or to impact evaluation of a consultant's qualifications?
Publish Program in Solicitation Documents: Publish the evaluation program, form, and how the evaluations will be used in the bidding and solicitation documents. Contractors and consultants should be aware ahead of time how you will measure their performance.
Use Consistently: Use the performance evaluation program consistency on all projects, not just on projects where the contractor's performance is not acceptable.
Include Written Comments: Include written comments from evaluators to support the ratings. Ensure the comments are professional.
Give Contractor a Copy of Scores and Comments: Provide a written copy of the completed performance evaluation form to the contractor (or consultant).
Appeal Process: Establish a fair process for the contractor to appeal the evaluation.
Keep Records: Maintain a database of historical ratings to be used in evaluating qualifications and responsibility on future projects.

Example: The Seattle Housing Authority has a Contractor Performance Evaluation Program. Click here to review their program. Click here to review a copy of the evaluation form.

Protecting Your Contract Boilerplate Language

noreply@blogger.com (Mike Purdy) — Tue, 24 Jan 2012 10:36:00 PST

Standard contract language has a way of inadvertently changing over time based on modifications made for previous projects, or changes someone might think are appropriate for a current project.

Copying From Previous Contracts: When it comes time to signing a contract, for many public agencies, the standard practice is to copy the most recent contract used. Over time, however, this practice can lead to the deterioration of standards and to inappropriate provisions in contracts. What is a good change for one project may not be applicable for all projects.

Practical Tips: When managing standard contract language, here are a couple of tips that will help ensure that the language does not become accidentally corrupted or changed over time, without deliberate action:

PDFs Online: Include only a PDF version of the standard contract on your agency's website and intranet website.
Password Protected in Track Changes: Do not send an electronic copy of the contract to anyone (internal agency staff, contractors, consultants) unless it is a Word document with track changes turned on and it is password protected. That way, any additions or deletions will automatically be marked in track changes and you can preserve the integrity of the document.
Limited Access to Unprotected Documents: Designate only one or two people as responsible for managing the standard contract and for making any changes to it. These should be the only individuals with access to a password unprotected version of the contract.
Update Log: Establish an online log to notify others in your agency or contractors of the date, section, and nature of changes made to the standard contract.

Establish Standard Contracts: If you agency does not have standard contracts, consider developing them. Contracts for construction, consultant services, and vendors supplying goods and equipment are all different and will have different contract provisions. Federal or other grant funding will also impact contract language.

New Jersey to Revamp Contracting Process

noreply@blogger.com (Mike Purdy) — Mon, 23 Jan 2012 09:46:00 PST

Gov. Chris Christie

New Jersey Governor Chris Christie has ordered state officials to fix and simplify the state's public procurement and contracting processes.

Critical Audit: The governor's order stemmed from a critical review and report from the state Comptroller's Office that showed errors, violations of state law, and illegal practices on major state and local contracts. "You have to react to it," Christie stated after learning about the problems.

Negligence, Corruption, and Lack of Training: Christie placed the blame for the problems on a combination of negligence and corruption. "Some of it is corruption, but I think even more of it is negligence," the governor noted. He also expressed concern that "we don't have enough people who are expert in this [public procurement] to do it the right way."

Review and Report Due This Spring: The focus of the review by the state treasurer's office will be to simplify the procurement process, and provide sufficient training for both state and local agencies in public procurement. A report is expected to reach the governor's desk sometime in the spring with recommendations.

More Information: For more information, click here to read an article from www.nj.com.

Audio Conference Training: Job Order Contracting Fundamentals

noreply@blogger.com (Mike Purdy) — Mon, 23 Jan 2012 08:46:00 PST

Audio Conference Training: Job Order Contracting Fundamentals

When: February 9, 2012 (10:00 a.m. Pacific Time)

Lisa Cooley

Instructor: Lisa Cooley, Senior Manager of Strategic Development, Centennial Contractors Enterprises, Inc.

Cost: $219

Sponsored by: Lorman Education Services

Information and Registration: Click here.

Reminder of Another JOC Event...Job Order Contracting Symposium in Bellevue, Washington on February 2, 2012. Click here for my previous blog entry on this event.

Mike Purdy's Public Contracting Blog

http://PublicContracting.blogspot.com

State Agency Acts to Protect Social Security Numbers on Contractor Payroll Reports

noreply@blogger.com (Mike Purdy) — Sun, 22 Jan 2012 09:46:00 PST

In response to security concerns, the Washington State Department of Labor and Industries recently adopted a policy permitting the inclusion of only the last four digits of workers' Social Security numbers on payrolls submitted to L&I in response to a request by an interested party. Other information is still required on the payrolls.

When L&I is conducting an investigation, they will still require that the payrolls submitted include the complete Social Security number of the workers.

Click here to read L&I's November 29, 2011 policy on "Social Security Number Requirements for Certified Payroll Record Reports."

2012 Design-Build Annual Conference in Phoenix

noreply@blogger.com (Mike Purdy) — Sun, 22 Jan 2012 08:09:01 PST

WATER/WASTEWATER CONFERENCE

When: April 23-25, 2012

Where: Phoenix, Arizona

Sponsored by: Design-Build Institute of America (DBIA)

Information and Registration: Click here.

TRANSPORTATION CONFERENCE

When: April 25-27, 2012

Where: Phoenix, Arizona

Sponsored by: Design-Build Institute of America (DBIA)

Information and Registration: Click here.

Missouri Proposes to Eliminate Prevailing Wage Requirements

noreply@blogger.com (Mike Purdy) — Wed, 18 Jan 2012 09:28:01 PST

A bill has been introduced in the Missouri House of Representatives that would eliminate Missouri's prevailing wage law for public works projects. It adopted, it would become effective on August 28, 2012.

Rep. Bill White

Federal Exemption: HB 1089, in addition to deleting all prevailing wage provisions from state law, adds the following statement: "Except for federally-funded projects and services provided to the federal government, no person in this state shall be paid a prevailing hourly wage."

For 2012 Action: The bill was pre-filed in mid-December 2011 for the 2012 legislative session by Representative Bill White from Joplin, Missouri. Joplin suffered catastrophic damage from a tornado on May 22, 2011.

Construction Owners Workshop

noreply@blogger.com (Mike Purdy) — Wed, 18 Jan 2012 09:13:00 PST

Workshop Agenda:

Adapting Existing Design Protocols to Accommodate BIM (Dennis Neeley of SmartBIM)

Risk Management: Global Incidence's Impact on Local Projects (Walter Tarr of Tarr Whitman and Associates, LLC)

When: February 15, 2012, from 9:00 a.m. to noon

Cost: $35 COAA members; $40 non-members

Sponsored by: Washington Chapter of the Construction Owners Association of America (COAA)

Where: Seattle, Washington (Graham Visitors Center, Seattle Arboretum, 2300 Arboretum Dr. E.)

Register: Click here.

Survey Results: Cost Estimates for Public Works Projects

noreply@blogger.com (Mike Purdy) — Tue, 17 Jan 2012 20:24:00 PST

Late last fall, I conducted an online survey of the practices of public agencies relating to cost estimates on public works projects.

Here are the results from the 75 respondents:

1. Does your agency develop cost estimates for your public works projects?

80.0% - Yes
14.7% - Sometimes
4.0% - No
1.3% - Other: 1.3%

2. Who usually prepares your agency's cost estimate?

57.3% - Architect or engineer who designed project
20.0% - Agency staff
13.3% - Varies - Either A&E or agency staff
4.0% - Independent cost estimator
2.7% - Don't do cost estimates
2.7% - Other

3. Does your agency include the cost estimate in the newspaper advertisement for the project?

38.7% - Yes - we publish a dollar range on either side of the estimate
12.0% - Yes - we publish the exact cost estimate
9.3% - Sometimes - depending on the project
5.3% - We include the estimate in the bidding documents
32.0% - No - we never publish the cost estimate
2.7% - Other

4. Does your agency disclose the cost estimate upon request?

29.3% - Yes - we provide the cost estimate if anyone asks for it - at anytime
10.7% - Yes - but we require a formal public records request
10.7% - Yes - we provide at the bid opening
22.7% - The cost estimate is already included in the advertisement or bidding documents
9.3% - No - we never disclose the cost estimate
17.3% - Other

Demographics: There were 75 responses from across the United States, with 61 responses from agencies in the State of Washington. There were also responses from ten other states: Arkansas, California, Florida, Georgia, Michigan, North Carolina, Nevada, Oklahoma, Oregon, South Carolina, and one response from Ontario (Canada).

Public Works Legislation Introduced in Washington State

noreply@blogger.com (Mike Purdy) — Mon, 16 Jan 2012 21:08:29 PST

The Washington State Legislature, which convened on January 9, 2012, is considering the following legislation related to public works:

Evaluation Criteria for Design-Build and GC/CM: HB 2327 would add to the list of required evaluation criteria to be considered in selecting a contractor for a Design-Build or GC/CM project. The added criterion relates to the firm's outreach plan to small, economically and socially disadvantaged, and Washington state certified minority and women business enterprises, and the firm's past performance in the utilization of small, economically and disadvantaged businesses.

Use of Design-Build: HB 2327 would also clarify the use of Design-Build projects. It would permit Design-Build to be used for the erection of portable facilities as defined in WAC 392-343-018, and would restrict the use of Design-Build modular buildings to "not more than five prefabricated modular buildings per installation site."

Changes to Job Order Contracting: HB 2328 would do the following:

Authorized Agencies: Permit additional agencies to use Job Order Contracting (regional universities, The Evergreen State College, and Sound Transit as a regional transit authority). In a separate bill relating to Job Order Contracting, HB 2369 would add all regional transit authorities to the list of agencies authorized to use Job Order Contracting.
Yearly Dollar Threshold: Raise from $4 million per year to $6 million per year the total dollar amount of work orders an agency could execute under Job Order Contracting.
Contract Term: Clarify that work orders executed within the contract term can be completed after the end of the contract term.
Subcontracted Percentage: Change the amount of work to be subcontracted from 90% of the actual work in a Job Order Contract to 60% of the Job Order Contract total.
Work Order Threshold: Increase the maximum amount of each work order from $300,000 to $350,000.
Reporting Year: Standardize reporting to be based on a July 1st to June 30th year, rather than a contract year basis in order to make aggregation of statewide reports easier.

Streamlining Small Public Works Projects: HB 1970, which was introduced in the 2011 legislative session but did not receive a hearing then, would:

Waive Bonding and Retainage: Permit public agencies to waive bonding and retainage on public works projects of $5,000 or less. Agencies would pick up liability for any claims filed on these projects. The Small Works Roster process would not need to be followed to qualify for these waivers.
Increase Threshold on Prevailing Wage Forms: Increase from $2,500 to $5,000 the amount at which an agency could accept Statements of Intent to Pay Prevailing Wages without certification by the Department of Labor and Industries.

No Retainage on Federally Funded Transit Projects: SB 6063 would fix legislation adopted in 2011 that responded to U.S. Department of Transportation regulations. The response of WSDOT to the federal prompt pay regulations was to propose amendments to RCW 60.28.011 mandating that on federally funded highway, road, or street projects, no retainage could be withheld, but that the parties protected by retainage would instead rely on the protection of the payment bond. SB 6063 corrects an oversight of the 2011 legislation by adding federally funded transit facilities to the list of projects for which no retainage would be withheld. See my July 21, 2011 and July 25, 2011 blog entires on the 2011 legislation for additional background information.

Small Works Roster and Small Businesses: SHB 1173, which was introduced in the 2011 legislative session, in addition to some minor stylistic changes, relates to the use of small businesses on Small Works Roster projects. It is a confusing and poorly written piece of legislation, and appears to have a negative impact on small businesses.

Threshold Increase for Small Businesses: Under the current law, for a limited public works project (less than $35,000), a public agency may solicit bids from small businesses with gross revenues less than $1 million. Under SHB 1173, this threshold increases to $7 million by tying in the definition of small business to that found in RCW 39.29.006.
Unnecessary Micro and Mini Business Definitions: The bill also includes new definitions for microbusinesses and minibusinesses, but the only way these definitions are used is giving agencies the authority to adopt "additional procedures to encourage" their use on limited public works projects, something that a law is not necessary for.
In-State Business Definition Conflicts with Existing Law: The bill also includes a definition, from RCW 39.29.006, of "in-state business" meaning one that "has its principal office located in Washington," a potential conflict with the 2011 adopted bidder preference legislation in RCW 39.04.380 that defines "nonresident contractor" as one without a "physical office located in Washington."

2012 NIGP Annual Forum in Seattle

noreply@blogger.com (Mike Purdy) — Wed, 11 Jan 2012 10:11:00 PST

It's not too early to begin making plans to attend NIGP's 2012 Annual Forum to be held this year in Seattle.

The Forum is the largest North American educational conference exclusively for individuals in public procurement.

When: August 18-22, 2012

Where: Seattle, Washington (Washington State Convention and Trade Center)

More Information: Click here.

Washington State Chapter NIGP: The Washington State chapter of NIGP will hold its annual business meeting on Tuesday, January 31, 2012 at Seattle City Hall from 8:30 a.m. to 3:30 p.m. Click here for more information and to register. At the meeting, you will also learn out about opportunities to volunteer for helping with the Annual Forum in Seattle this summer.

Colorado Considers Bid Preference Bill

noreply@blogger.com (Mike Purdy) — Tue, 10 Jan 2012 08:46:00 PST

Following a growing national trend of providing bid preferences for in-state businesses and workers, Colorado is poised to consider a bid percentage preference law for Colorado firms. Senate Bill 1 will be considered when the Colorado General Assembly convenes on January 11, 2012.

Construction and Service Contracts Affected: The percentage preference for Colorado firms would vary based on the type of contract and what commitments the bidders make. Here's a summary of the percentage preferences proposed:

Award Amounts Could Be Higher: Under the proposed legislation, a Colorado business could be awarded a contract even if their bid price was not the low bid. If they qualified for enough of a percentage preference, their bid could be deemed to be lower than an out-of-state firm. The Colorado business would be awarded the project at their actual, higher bid price.

More Information:

Click here to read an article from The Colorado Statesman on December 16, 2011.

Visit the Bid Preferences subject index of my blog for additional blog entries about bid preferences across the country: http://publiccontracting.blogspot.com/search/label/Bid%20Preferences.

Training: Prevailing Wage Law in Washington

noreply@blogger.com (Mike Purdy) — Tue, 10 Jan 2012 08:34:01 PST

Prevailing Wage Law in Washington

When: January 20, 2012 (8:30 a.m. to 4:30 p.m.)

Where: Seattle, Washington (Washington State Convention Center)

Cost: $359

Speakers:

Laura Herman, Department of Labor and Industries
Judd H. Lees, Williams Kastner PLLC
David J. Soma, Retired, Department of Labor and Industries
Suzanne J. Thomas, K&L Gates LLP

Sponsored by: Lorman Education Services

Information and Registration: Click here.

Not All Agencies Adopt the IRS Mileage Reimbursement Rate

noreply@blogger.com (Mike Purdy) — Mon, 09 Jan 2012 20:45:31 PST

In a recent blog entry, I noted that the IRS has decided to maintain 55.5 cents per mile as the business mileage reimbursement rate through 2012.

Some Agencies Set Own Rate: It's a good thing to remember, however, that not all state and local agencies have adopted this standard on their contracts. For example, the Washington State Department of Transportation (WSDOT) is maintaining a 51 cents per mile rate through September 2012 for their contracts.

Check Invoices and Contracts: If you're a public agency, make sure you check invoices carefully so that you pay the contractual mileage reimbursement rate you've agreed to. If you're a contractor doing business with the government, review your contract before submitting an invoice so that you submit the correct rate on your invoices.

Link to Previous Blog: Click here to read my previous blog entry on the subject.

Job Order Contracting (JOC) Symposium

noreply@blogger.com (Mike Purdy) — Mon, 09 Jan 2012 08:43:00 PST

Job Order Contracting (JOC) Symposium

When: Thursday, February 2, 2012 (8:30 a.m. to 4:30 p.m.)

Where: Bellevue, Washington (Bellevue City Hall, 450 110th Avenue NE)

Agenda:

History of JOC (Harry Mellon)
Explanation of JOC in Washington State (Mike Purdy)
OMWBE and JOC (Cathy Canorro)
Labor and Industries and JOC
An Owner's Perspective (Panel discussion)
A Contractor's Perspective (Panel discussion)
Piggybacking

Cost: $15.00

Information and Registration: Click here. Attendance is limited to 60 participants.

IRS Keeps Mileage Reimbursement Rate the Same in 2012

noreply@blogger.com (Mike Purdy) — Sun, 08 Jan 2012 09:48:02 PST

The IRS announced that the business mileage reimbursement rate of 55.5 cents per mile will remain unchanged in 2012 - a rate that has been in effect since July 1, 2011.

Click here to read the IRS announcement.

Mike Purdy's Public Contracting Blog

http://PublicContracting.blogspot.com

Job Opening: Contract Compliance Administrator

noreply@blogger.com (Mike Purdy) — Sun, 08 Jan 2012 09:28:02 PST

Pierce Transit

Position: Contract Compliance Administrator

Location: Lakewood, Washington

Closing Date: Wednesday, January 24, 2012

Salary: $56,223 to $68,339 annually

Job Summary: Under direction from the Procurement Manager, coordinates and organizes the contract administration function of the agency; provides technical assistance to departments purchasing a wide variety of goods and services; monitors and resolves problems related to compliance with established contracts and agreements; participates in the development and fulfillment of agency contract requirements; manages the relationship between Pierce Transit and contractors during contract performance to ensure that both parties fulfill their contractual obligations and that Pierce Transit receives that the contract states.

For More Information and To Apply: Click here.

Free Purchasing Card Webinar

noreply@blogger.com (Mike Purdy) — Wed, 04 Jan 2012 11:14:00 PST

Free Purchasing Card Webinar: Ins and Outs of Rebate

When: January 25, 2011 (11:00 a.m. - 12:00 p.m. - PDT)

Where: Olympia, Washington (1500 Jefferson Street, Room 2208)

Sponsored by: Washington State Department of Enterprise Services, Office of State Procurement, is hosting this National Association of Purchasing Card Professionals (NAPCP) webinar

Instructor: Lynn Larson, NAPCP

Cost: Free for those attending in Olympia, Washington. There is a cost for those attending from another location ($99 for NAPCP members; $199 for non-NAPCP members)

Agenda:

The connection between interchange and rebate (and why interchange has been in the news)
Factors that impact the extent to which an end-user's card program is profitable for the card provider
Common elements of revenue sharing incentives and strategies to optimize these incentives
How rebate compares to other P-Card benefits
Considerations for internal accounting treatment of rebate

Information and Registration: Click here for more information.

E-mail Neva Peckham at neva.peckham@des.wa.gov to register for attending at the free Olympia location.
Click here for signing up (with cost) for attending the webinar through NAPCP from your own location.

Training: Design Management Fundamentals

noreply@blogger.com (Mike Purdy) — Wed, 04 Jan 2012 10:36:00 PST

1 Day Training: Design Management Fundamentals

When: Friday, January 13, 2012 (7:15 a.m. to 5:00 p.m.)

Where: Seattle, Washington (Lease Crutcher Lewis, 107 Spring Street)

Sponsored by: Northwest Region of DBIA (Design-Build Institute of America)

Cost:

$375 - DBIA member
$675 - Non-DBIA member

Description: With increasing reliance on Design-Build project delivery, Design-Build projects are coming to the forefront of the design and construction industry. The value, cost, and time savings derived from integrating design and construction services is now widely accepted. Yet many design and construction practitioners lack a basic understanding of each others role, business approaches, and work cultures. Without an understanding of the motivations and challenges driving each member of the project team, it is difficult to effectively manage the Design-Build process. This class lays out the processes associated with successful management of design within an integrated delivery framework.

Information and Registration: Click here.

2 Day Training on GC/CM

noreply@blogger.com (Mike Purdy) — Tue, 03 Jan 2012 07:00:07 PST

The alternative public works contracting delivery method known as GC/CM (General Contractor/Construction Manager) is continuing to find popularity with public agencies in the State of Washington.

GC/CM Nationally: Across the country, GC/CM is known by different names such as Construction Manager (CM) at Risk, or CM/GC. Regulations and practices differ by state.

Training on Washington's GC/CM Law: In Washington state, GC/CM is authorized and regulated by RCW 39.10. Public agencies and contractors interested in finding out more about GC/CM may be interested in this two day training event. I will be part of a panel discussion on the second day of the training.

When: January 12-13, 2012 (8:00 a.m. to 5:00 p.m.)

Where: Seattle, Washington (AGC Building, 1200 Westlake Ave. North)

Sponsored by:

Cost: $350

Information and Registration: Click here. Only 33 seats still available.

More GC/CM Information: Visit the GC/CM subject index of my blog.

Job Opening: Cost Price Analyst - Deadline Extended

noreply@blogger.com (Mike Purdy) — Mon, 02 Jan 2012 21:12:01 PST

Port of Seattle

Position: Cost Price Analyst

Location: Seattle, Washington

Closing Date: Extended from December 30, 2011 to Monday, January 9, 2012

Salary: Minimum $69,108 to Midpoint $86,366

Job Summary: Perform a full range of complex professional duties related to the analysis of cost elements and overhead rates to achieve fair and reasonable prices for Port services. Analyze consultant billing rates and cost proposals for reasonableness of costs and compliance with FAR requirements. Prepare negotiation strategy memos based on research. Develop training materials related to negotiations. Create and update Port database of billing rates by classification.

For More Information and To Apply: Click here.

Job Opening: Cost Price Analyst (Port of Seattle)

noreply@blogger.com (Mike Purdy) — Sun, 18 Dec 2011 16:20:00 PST

Last week in my holiday greeting blog post, I said I would take a break from blogging until the new year.

However, the Port of Seattle has just posted a newly created position that for which applications close on December 30th. The job might be a nice late Christmas present for someone - so I couldn't resist the opportunity to let you know about it. The Port is recruiting externally for this position and has not identified any internal candidates for the job.

Port of Seattle

Position: Cost Price Analyst

Location: Seattle, Washington

Closing Date: Friday, December 30, 2011 (midnight)

Salary: Minimum $69,108 to Midpoint $86,366

Job Summary: Perform a full range of complex professional duties related to the analysis of cost elements and overhead rates to achieve fair and reasonable prices for Port services. Analyze consultant billing rates and cost proposals for reasonableness of costs and compliance with FAR requirements. Prepare negotiation strategy memos based on research. Develop training materials related to negotiations. Create and update Port database of billing rates by classification.

For More Information and To Apply: Click here.

Merry Christmas!

noreply@blogger.com (Mike Purdy) — Thu, 15 Dec 2011 08:05:00 PST

The holiday season is often accompanied by even more busyness than what we usually experience during the year. But it would be nice if it were a quieter time - a time to wait and prepare, a time to reflect and rejoice, a time to spend away from work and with family and friends.

And so in that spirit, I will take a break from writing this blog for a couple of weeks. I know that many of you will also be taking time off over the holidays, and I don't want to clutter your in-box with yet more e-mails to read come the first of the year. I'll resume writing this blog in early January.

Until then, step back from your routines and enjoy the sights, smells, tastes, and meaning of this season, savoring each relationship, and remembering that each day we experience is a gift of grace.

Merry Christmas and a Happy New Year!

Inadequate Plans and Specifications Results in Significant Change Orders and Audit Finding

noreply@blogger.com (Mike Purdy) — Wed, 14 Dec 2011 09:11:00 PST

The Public Utility District No. 1 of Klickitat County (WA) contracted with an engineering firm to design the expansion of its landfill gas project, originally estimated at $55 million. During construction, the District realized that the plans and specifications were incomplete and inadequate in a number of areas.

$12 Million in Change Orders: As a result, the District negotiated numerous change orders to the construction contract, significantly increasing the contract amount. The following chart is from an audit report issued by the Washington State Auditor's Office indicating the number and amount of change orders for a couple of the separate contracts that were awarded for the project:

Pricing Change Order Work: The auditor issued a finding, noting that by executing the change orders, "the District cannot ensure it received the best possible price for these components of the project." Of course, all change orders are negotiated amounts and not competitively bid, so it is hard to know whether any change order amount is the best possible price. It is incumbent on public agencies to ensure they have a rigorous process for negotiating change order amounts, consistent with the methodology that should be described in the contract.

Separate Bidding Not Practical: The District commented that the change orders were executed only after determining that it was "the most cost efficient path for our rate payers," and that the change orders were "very thoroughly reviewed." The audit report does not include sufficient details, but presumably it would not have been practicable or advisable for the project to competitively bid the work that was not originally specified, since it was probably an integral part of the entire project.

Audit Recommends Careful Review of Plans and Specs: The main criticism in the audit finding, however, related to the core issue that caused the problem: the lack of adequately reviewed plans and specifications. The audit recommended that the District ensure "project plans and specifications are detailed enough to allow for accurate and complete bidding." The District acknowledged the weakness in their approach that that they "need to take additional steps to ensure the completeness of specifications we receive, even from qualified engineers."

Audit Finding: Click here to read the audit finding from the State Auditor's Office.

Lessons Learned: The following are some of the impacts of inadequate plans and specifications:

Bidders may bid based on different assumptions if the documents are not complete
Significant change order amounts that are not competitively established
Inability of the agency to meet its project objectives since they are not defined in detail
Potential disputes and litigation over additional work

Public agencies have a responsibility to carefully review plans and specifications from architects and engineers to ensure completeness and that the documents meet the agency's objectives.

El Paso Adopts Bid Preference Law

noreply@blogger.com (Mike Purdy) — Tue, 13 Dec 2011 08:19:00 PST

The City of El Paso, Texas approved a new law in early November 2011 providing a local preference of between 3% and 5% (depending on circumstances) on construction projects of $100,000 or less.

To qualify as a local business, a contractor must have an office in the city limits and have at least three full-time employees.

Click here for more information.