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Competitive Bidding Exemptions

This page provides a basic overview of competitive bidding exemptions for local governments in Washington State, including emergencies, sole source purchases, special market conditions, auctions, and other situations.

It is part of MRSC’s series on Purchasing and Contracting.

Overview

Washington statutes provide exemptions from competitive bidding in a number of situations, meaning that local governments do not have to follow the normal competitive processes.

Some of these exemptions apply broadly to almost all local government agencies, while others apply more narrowly.

To see your agency's possible exemptions for a particular type of contract, use MRSC's Find Your Contracting Requirements tool.

Uniform Exemptions for Public Works and Purchases

RCW 39.04.280 provides uniform exemptions for public works and purchases, including:

  • Emergency public works and purchases
  • Sole source purchases
  • Purchases involving special facilities or market conditions
  • Purchase of insurance or bonds

These exemptions are discussed in more detail below and apply to all municipalities as defined in RCW 39.04.010, as long as the governing body formally approves and documents the exemption. (Also see RCW 36.32.270 for counties.)

Note: These competitive bidding exemptions only apply if a jurisdiction has either:

  • Adopted a resolution at the time of contracting, or
  • Adopted written policies beforehand that apply to that particular situation, in which case the contract and the factual basis for the exemption must be recorded and open to public inspection immediately after the contract is awarded

Emergency Public Works and Purchases

RCW 39.04.280(1)(c) and (1)(e) provide uniform exemptions for emergency purchases and public works projects, respectively. Some agencies also have similar emergency exemptions specifically written into their enabling statutes.

Practice Tip: Any contract for which a competitive process is waived must be an explicit necessity and directly related to the emergency.

“Emergency” as defined in RCW 39.04.280(3) means any unforeseen circumstances beyond the control of the municipality that either present a real, immediate danger to the proper performance of essential functions, or will likely result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken. This includes declared federal or state disasters, as well as local agency-declared emergencies.

If an emergency exists, the appropriate individuals – either the governing body, or an individual designated by the governing body to act in the event of an emergency – may declare that an emergency exists, waive competitive bidding requirements, and award all necessary contracts to address the emergency. If a federal or state emergency has been declared, the governing body should pass a resolution acknowledging the declaration and invoking RCW 39.04.280 as well.

In the event of a true emergency, governing bodies are generally exempt from the normal notice requirements of the Open Public Meetings Act under RCW 42.30.070 and RCW 42.30.080(4).

If an emergency contract is awarded without competitive bidding, the governing body or its designee must enter a written finding of an emergency into the public record no later than two weeks following the contract award.

Practice Tips for Emergency Public Works Contracts

  • If possible, your agency should create a standard, short-form contract to use in the event of an emergency. However, a fully-executed contract is not required before the contractor begins emergency work.
  • Your agency still must require retainage, prevailing wages, and performance and payment bonds.
  • Although you may already have an emergency contractor in mind, you might want to check your small works roster (if applicable) to see if there are any other contractors that could mobilize quickly and already have insurance certificates and other documents on file.
  • Emergency contractors must be responsible contractors as defined in RCW 39.04.350(1).
  • You do not need to obtain bids before starting the project, but it is a good idea to agree on a general plan of work before the contractor starts, including material sources and costs.
  • If force account is the only practical way to proceed, meaning that you have not agreed to a cost ahead of time, get the contractor to agree to use Section 1-09.6 of the current edition of the Standard Specifications for Road, Bridge, and Municipal Construction, making sure to tailor it to your agency.
  • Your agency should obtain a certificate of insurance as soon as possible, naming the agency as additional insured. If your agency does not have standard insurance requirements, you may use Section 1-07.18 (Public Liability and Property Damage Insurance) of the Local Agency General Special Provisions supplement to the Standard Specifications for Road, Bridge, and Municipal Construction, making sure to tailor it to your agency.

Examples of Emergency Public Works/Purchases

Sole Source Purchases

RCW 39.04.280(1)(a) allows agencies to waive competitive bidding if a purchase is clearly and legitimately limited to a single supplier. These situations often arise when an agency has specific technological requirements. Examples include:

  • Licensed, copyrighted, or patented products or services that only one vendor provides
  • New equipment or products that must be compatible with existing equipment or products
  • Proprietary or custom-built software or information systems that only one vendor provides
  • Products or services where only one vendor meets the required certifications or statutory requirements

Agencies should base these decisions on an objective review of the required product or service, making sure to document why that particular product or service is mandatory and whether efforts were made to find other vendors.

Examples of Sole Source Request/Justification Forms

Examples of Sole Source Resolutions/Notice

Purchase of Insurance or Bonds

RCW 39.04.280(1)(d) allows agencies to waive competitive bidding for the purchase of insurance or bonds.

Purchases Involving Special Facilities or Market Conditions

RCW 39.04.280(1)(b) allows agencies to waive competitive bidding for purchases involving special facilities or market conditions. These are generally limited to good deals that are available for a short time, such as a very good price on an exceptional piece of used equipment, or the chance to buy supplies at a going-out-of-business sale or similar event.

Auctions

RCW 39.30.045 allows any municipality, as defined in RCW 39.04.010, to purchase any supplies, equipment, or materials at auctions without following public bidding requirements if the items can be obtained at a competitive price.

And while there is no specific statute regarding the purchase of real estate at auction, any local government that is empowered by law to acquire real estate in general may purchase real estate at auction. A purchase of real estate at auction still must meet the legal requirements for local government land acquisition, including a proper public purpose for the acquisition.

Practice Tip: For auction purchases, the appropriate manager, council, or commission should pre-approve an upper bidding limit for the person doing the bidding.

For real estate auctions, where publicly disclosing the upper limit could cause a likelihood of increased price, we recommend that the legislative body authorize participation in the auction during an open session, establish the maximum price it is willing to pay during a closed executive session (RCW 42.30.110(1)(b)), and then (after the sale) ratify the transaction in an open session.

See the following example:

  • Wenatchee Resolution No. 2017-14 (2017) – Authorizes mayor, finance director, and accountant to submit bids on city's behalf to buy a federal property being sold at online auction. Maximum dollar limit was set during executive session under RCW 42.30.110(1)(b) and remains confidential to avoid likelihood of price increase.

Community Service Group Contracts

RCW 35.21.278 allows selected municipalities to enter into contracts with community service groups for certain types of public works projects without following competitive bidding requirements and to reimburse the community service groups for their expenses.

These community service contracts may be used to design, install, improve, or maintain:

  • Parks,
  • School playgrounds,
  • Public squares or other public spaces,
  • Port habitat sites,
  • Equipment or artwork,
  • Facilities as a community or neighborhood project, or
  • Environmental justice stewardship or sustainability projects.

This exemption applies to:

  • Cities and towns
  • Counties
  • Metropolitan park districts, park and recreation districts, and park and recreation service areas
  • Port districts
  • School districts

Examples of community service groups include chambers of commerce, service organizations, community, youth, or athletic associations, or other similar organizations.

The statute says that the contracting association "may use volunteers to whom no wage or salary compensation is paid in the project," but it does not require the use of volunteers. The statute also allows the community service groups to provide the volunteers with certain tools, materials, food and drink, and insurance coverage.

The benefit received by the municipality must be at least two times the amount of the payment to the community group. Municipalities may not spend more than $75,000 or $2 per resident, whichever is greater, on all of these types of contracts combined within a single year.

Examples of Community Service Group Contracts

Pollution Control Facilities: Cities, Counties, Ports

RCW 70A.210.110 (recodified in 2020; previously RCW 70.95A.090) provides a broad competitive bidding exemption for pollution control facilities constructed or improved by cities, towns, counties, or port districts. It states:

[Pollution control] facilities shall be constructed, reconstructed, and improved … in the manner determined by the governing body in its sole discretion and any requirement of competitive bidding, lease performance bonds or other restriction on the procedure for the award of contracts for such purpose … is not applicable.”

RCW 70A.210.020 defines pollution broadly to include “any form of environmental pollution, including but not limited to water pollution, air pollution, land pollution, solid waste disposal, thermal pollution, radiation contamination, or noise pollution.”

It also defines facility as “any land, building, structure, machinery, system, fixture, appurtenance, equipment or any combination thereof, or any interest therein … to be used … in furtherance of the purpose of abating, controlling, or preventing pollution.”

This statute appears to be far-reaching, but eligible agencies should use caution before proceeding and ask the Department of Ecology to certify that the facility is indeed designed to abate, control, and/or prevent pollution.

In addition, cities, towns, and counties have their own statutory exemptions for water pollution control facilities/services and solid waste handling facilities/services:

Water Pollution Control Facilities: All Agencies

Chapter 70A.140 RCW (recodified in 2020; formerly chapter 70.150 RCW) allows agencies to contract for water pollution facilities and operation using the competitive bidding requirements of RCW 70A.140.040.

For more information, download the Department of Ecology’s publication on Service Provider Agreements for Water Pollution Control Facilities.


Last Modified: July 16, 2024