2023 Legislative Session Outcomes for Procurement and Contracting, Part 1

The 2023 legislative session saw many bills pass that impact procurement and contracting in the state. This blog is the first in a two-part series on procurement legislation and will focus on bills that specifically affect local government procurement and those that impact MRSC’s programs and training related to procurement and contracting.

SB: 5268: Modifications to Small Works Roster Requirements

SB 5268 makes several amendments, adds new sections, and repeals multiple RCWs related to small public works roster projects. Key updates of SB 5268 are listed below in order of effective date.

Effective July 1, 2023: Port districts and irrigation districts may now use a small works roster process for projects up to $350,000, like all other local governments (see sections 31 and 35 of the bill).

The following items will be effective July 1, 2024:

• Local government authorization to use small works rosters will expand. Many local government agencies are specifically authorized to use the small works roster process in their enabling statutes. There are also some local governments without this authorization in the enabling statute. SB 5268 updates the definition of all “authorized local governments,” defined in the legislation as “a political subdivision of the state, school district, or special purpose district with public works authority.” (See section 2).
• Small businesses bidding on public works now have a common definition (See section 2).
• The Office of Minority and Women’s Business Enterprises (OWMBE) will house a new small business certification program (See section 3).
• MRSC Rosters will become the designated statewide roster. (See section 14).
• The small works roster contracting process in RCW 39.04.155 will be updated. The previous limited public works threshold of $50,000 is replaced by a new threshold of $150,000, and the change also allows for direct contracting under certain conditions. A state agency or local government will notify all contractors in the roster category for projects with an estimated cost of $150,000-$350,000 (See section 15).
• There is no requirement for retainage or performance bonds for small public works contracts under $5,000 (See section 15). For contracts under $150,000, agencies can still allow 10% retainage in lieu of bonds, as provided in RCW 39.08.010.
• The Department of Enterprise Services (DES) will make available templates for bid invitations, bidding, and contracting (See section 15).

This legislation was proposed by the Capital Projects Advisory Board (CPARB). CPARB has provided the following resources to provide additional details regarding SB 5268:

• Fact Sheet
• Overview and FAQ

HB 1050: Apprenticeship Utilization Expanded

HB 1050 expands apprenticeship utilization requirements to ‘municipalities’, as defined in RCW 39.04.010, including cities, counties, towns, port districts, or other public agencies authorized by law to require the execution of public work projects, except for various diking/drainage/irrigation districts.

The apprentice utilization requirements of RCW 39.04.320 currently apply to school districts, four-year institutions of higher education, and certain state agencies, and they require apprentices contribute a minimum of 15% of total labor hours on:

• Public works projects estimated to cost $1 million or more, and
• Washington State Department of Transportation projects estimated to cost $2 million or more.

The expanded requirements do not apply to contracts awarded by state agencies headed by a separately elected public official or housing authorities as defined in RCW 35.82.020.

Key updates of HB 1050 are covered below in order of effective date.

Effective July 1, 2023: The Department of Labor and Industries (L&I) and MRSC must provide training, information, and ongoing technical assistance to local governments in order to help them comply with apprenticeship utilization requirements. Training must include reporting requirements, sample contract language, and best practices on adopting apprenticeship guidelines — including ensuring compliance related to a contractor that seeks a good faith waiver.

Effective July 1, 2024: Public works contracts awarded by a local government estimated to cost more than $2 million must require no less than 15% of total labor hours be performed by apprentices.

Effective July 1, 2026, and until July 1, 2028: Public works contracts awarded by a local government estimated to cost more than $1.5 million must require no less than 15% of total labor hours be performed by apprentices.

Effective July 1, 2028: Public works contracts awarded by a local government estimated to cost more than $1 million must require no less than 15% of total labor hours be performed by apprentices.

Since MRSC is involved with outcomes in both the small works roster implementation and expanded apprenticeship utilization for local government, we are currently planning to provide in-person and virtual training on these topics starting in the fall. As these opportunities become available, they will be posted on our Upcoming Trainings page.

Other 2023 Legislation

In Part 2 of this blog series, I will review these additional bills:

• SB 5342: Offers exemptions for transit agencies for certain interlocal agreements;
• HB 1086: Increases annual value for community service organization contracts without competitive bidding; 
• SB 5088: Expands contractor registration requirements for plumbing, electrical, and elevator contractors; 
• HB 1777: Introduces performance-based contracts for energy equipment; and
• HB 1621: Increases limits for procurement contracts that require competitive bidding.