Training presentation on 2009 legislation passed by the Washington State Legislature affecting Public Works contracting.

1. Michael E. Purdy
Contracts Manager
University of Washington
John W. Carpita
Public Works Consultant
Municipal Research and Services Center
June, 2009

2. I have come to the
conclusion that the making
of laws is like the making
of sausages—the less you
know about the process
the more you respect the
result.
[John Godfrey Saxe in The Daily Cleveland
Herald, Mar. 29, 1869]
quot;No man's life, liberty, or
property are safe while
the legislature is in
session.quot;
[Often attributed to Mark Twain]

3.  Terminology Effective Date of
 HB = House Bill Legislation
 SHB = Substitute House Bill July 26, 2009
 ESHB = Engrossed
Substitute House Bill
 SB = Senate Bill
 SSB = Substitute Senate Bill
 ESSB = Engrossed Substitute
Senate Bill
 Look up Bills
 http://apps.leg.wa.gov/billinfo/
6/4/2009

4.  Bid and Purchase Limits
 HB 1196 – Increasing the Dollar Limit For Small Works Roster
Projects
 ESHB 1847 – Bid Limits
 SB 5228 – Construction Projects by County Forces
 Apprenticeship
 SB 5873 – Apprenticeship Utilization
 Bidder Responsibility
 Debarment
 Prevailing Wages
 SB 5903 – Public Works Contracts for Residential Construction
 SSB 5904 – Independent Contractor
4 4

5.  Contracting
 HB 1195 – Payment of Undisputed Amounts on Change Orders
 Retainage
 HB 1199 – Retainage of Funds on Public Works Projects
 HB 1555 – Underground Economy in the Construction Industry
 Alternative Public Works Contracting
 HB 1197 – Alternative Public Works Contracting
 Bills of Note That Didn’t Pass
 Latecomer Agreements
 EHB 1513 – Allowing Municipalities to Participate in Financing the
Development of Water or Sewer Facility Projects
 Sales Taxes
 SB 6173 – Improving Sales Tax Compliance
5 5

6. HB 1196 – Small Works Roster
 Upper limit for a small public works roster process
is raised from $200,000 to $300,000
 If you choose to solicit bids from less than all the
appropriate contractors on the roster, then the
amount requiring notification of all contractors on
the roster is changed from between $100,000 and
$200,000 to between $150,000 and $300,000.
 Amends RCW 39.04.155 (all authorized agencies)
and RCW 53.08.120 (Ports)
6 6

7. ESHB 1847 – Bid Limits
Bid Limits
Cities and Towns Single Craft Multiple Crafts
Old New Old New
First Class Cities Over 150,000 $35,000 $45,000 $70,000 $90,000
First Class City Under 150,000 $30,000 ---- $50,000 ----
Code Citiesy Over 20,000 $30,000 $40,000 $50,000 $65,000
Code City Under 20,000 $30,000 ---- $45,000 ----
2nd Class Cities & Towns $30,000 $40,000 $45,000 $65,000
Single Craft Bid Limits Multiple Craft Bid Limits
Counties Old New Old New
Over 1 M 400 K w/ Purchasing
$25,000 $45,000 $70,000 $95,000
Department
Over 400 K w/o Purchasing
---- $40,000 ---- $40,000
Department
Under 1 M 400 K w/ Purchasing
$10,000 $40,000 $10,000 $40,000
Department
Under 1 M 400 K w/o Purchasing
$10,000 $40,000 $10,000 $40,000
Department
7 7

8. ESHB 1847 – Bid Limits
Bid Limits
Other Agencies Old
Single Craft
New
Multiple Crafts
Old New
Water & Sewer Districts (Title 57 RCW) $10,000 $20,000 $10,000 $20,000
Metropolitan Park Districts (Ch. 35.61 RCW) $5,000 $20,000 $5,000 $20,000
Fire Districts (Title 52 RCW) $2,500 $20,000 $2,500 $20,000
Public Hospital Districts (Ch. 70.44 RCW) $50,000 $75,000 $50,000 $75,000
Housing Authorities (Ch. 35.82 RCW) ?? ?? ?? ??
School Districts (RCW 28A.335.190) $40,000 $40,000 $40,000 $40,000
Higher Education (RCW 28B.10.3.50) $35,000 $45,000 $55,000 $90,000
Port Districts (Title 53 RCW) $200,000, except note RCW 53.08.135
Public Utility Districts (Title 54 RCW) See RCW 54.04.070 & 54.04.082
8 8

9. Bid Limits for Selected Authorized Agencies
(Includes ESHB 1847 Changes, Effective July 26, 2009)
Bid Limits
Cities and Towns Single Craft Multiple Crafts
First Class City $45,000 (1) $90,000 (1)
Code City $40,000 $65,000
2nd Class City & Towns $40,000 $65,000
Counties
Over 400 K w/ Purchasing
$45,000 (2,3) $90,000 (2,3)
Department (RCW 36.32.235)
Over 400 K w/o Purchasing
$40,000 (3,4) $40,000 (3,4)
Department (RCW 36.32.240,250)
Under 400 K w/ Purchasing
$40,000 (3,4) $40,000 (3,4)
Department (RCW 36.32.240,250)
Under 400 K w/o Purchasing
$40,000 (3,4) $40,000 (3,4)
Department (RCW 36.32.250)
Water & Sewer Districts (Title 57 RCW) $20,000 $20,000
Metropolitan Park Districts (Ch. 35.61 RCW) $20,000 $20,000
Fire Districts (Title 52 RCW) $20,000 $20,000
Port Districts (Title 53 RCW) $200,000, except note RCW 53.08.135
Public Utility Districts (Title 54 RCW) See RCW 54.04.070 & 54.04.082
Public Hospital Districts (Ch. 70.44 RCW) $75,000 $75,000
Housing Authorities (Ch. 35.82 RCW) ?? ??
School Districts (RCW 28A.335.190) $40,000 $40,000
1) RCW 35.22.620(2) further limits the dollar value of public works performed by city employees or day
labor to ten (10) percent of the total public works construction budget in a given budget period. Work
performed within a city by county employees under an interlocal agreement is to be included in this limit.
2) Also subject to annual limit of 10% of public works construction budget (RCW 36.32.235).
3) Also subject to county road force limitations for road funds under RCW 36.77.065.
4) Not a bid limit, per se, but is a limit below which informal contracting procedures may be used.
6/4/2009 9

10. SB 5228 - Construction Projects by County Forces
 The term quot;day laborquot; is removed from the statutes and
replaced with quot;county forces”
Multiplied by the
Basic Dollar
Previous Year's Motor
Volume Total Dollar Volume
County Population Vehicle Fuel Tax
County Forces County Forces Construction
Distribution Factor
Construction
(DF)
Under 30,000 $ 0.7 M DF $ 0.7 M + (DF x $ 0.7 M)
30,000 to 150,000 $ 1.15 M DF $ 1.15 M +(DF x $ 1.15 M)
150,000 to 400,000 $ 1.75 M DF $ 1.75 M +(DF x $ 1.75 M)
Over 400,000 $ 3.25 M DF $ 3.25 M + (DF x $ 3.25 M)
10 10

11. SB 5873 – Apprenticeship Utilization
 Topics addressed:
1. Apprenticeship Utilization for higher education
2. Bidder Responsibility
3. Debarment
 RCWs affected:
1. 39.04.320 (apprenticeship)
2. 39.04.350 (bidder responsibility)
3. 39.12.055 (debarment)
11 11

12. SB 5873 – Apprenticeship Utilization
 RCW 39.04.320
 Agencies Covered by Apprenticeship Requirements:
• School districts
• WSDOT
• State Department of General Administration
• Four-year institutions of higher education
• (added by SB 5873)
12 12

13. SB 5873 – Apprenticeship Utilization
• Date: Effective for projects bid after Jan. 1, 2010
• Registration: Apprentices must be registered in a state-
approved apprenticeship program
• Percentage requirements for use of apprentices
Estimated to cost Bid after Percentage Required
$3 million January 1, 2010 10%
$2 million January 1, 2011 12%
$1 million January 1, 2012 15%
13 13

14. SB 5873 – Apprenticeship Utilization
• RCW 39.04.350
• Mandatory Bidder Responsibility Criteria
• Adds apprenticeship compliance as mandatory
criteria:
1. Registered contractor
 At time of bid submittal (RCW 18.27.020)
2. Current UBI number
3. Industrial insurance coverage
4. Employment security department number
5. State excise tax registration number
6. Not disqualified from bidding
7. Not in violation of apprenticeship requirements
14 14

15. SB 5873 – Apprenticeship Utilization
• RCW 39.04.350
 Applicability: Mandatory Bidder Responsibility Criteria
for violation of apprenticeship requirements applies
only:
 a) Agencies: To the following agencies
1. Four-year institutions of higher education
2. School districts
3. WSDOT
4. State Department of General Administration
 b) With Requirements: And when apprenticeship
requirements apply to a project
15 15

16. SB 5873 – Apprenticeship Utilization
RCW 39.04.350
 Violation of Apprenticeship requirements:
1. Working apprentices out of ratio
2. Working apprentices without appropriate supervision
3. Working apprentices outside their approved work
processes (scope and standards)
 Non-compliance:
 By State Apprenticeship and Training Council
 For 1 year immediately preceding the date of the bid
solicitation
16 16

17. SB 5873 – Apprenticeship Utilization
RCW 39.12.055
Debarment
 Apprenticeship Violations: Adds apprenticeship
violations to list of reasons for “debarment” (not
being allowed to bid)
 Working apprentices out of ratio
 Working apprentices without appropriate supervision
 Working apprentices outside their approved work
processes
 Applicability: Applies to public works projects by all
public agencies
 Not just those subject to RCW 39.04.320
(apprenticeship)
 Not part of bidder responsibility that references
debarment under RCW 39.04.065 (3) for prevailing wage
violations
17 17

18. SB 5873 – Apprenticeship Utilization
• RCW 39.12.055
• Debarment
 “A contractor shall not be allowed to bid on any public works
contract for one year from the date of a final determination that
the contractor has committed any combination of two of the
following violations or infractions within a five-year period:
1. Workers Compensation: Violated RCW 51.48.020(1) or
51.48.103;
2. Contractor Registration: Committed an infraction or violation
under chapter 18.27 RCW for performing work as an
unregistered contractor; or
3. Apprenticeship: Determined to be out of compliance by the
Washington state apprenticeship and training council for
working apprentices out of ratio, without appropriate
supervision, or outside their approved work processes as
outlined in their standards of apprenticeship under chapter
49.04 RCW.”
18 18

19. SB 5873 – Apprenticeship Utilization
RCW 39.12.055
Debarment
 Outstanding Issues:
1. Information not readily available for violations:
 Workers Compensation
 Contractors Registration
2. Labor & Industries should be developing website for
access on Apprenticeship violations
19 19

20. 1. SB 5903
 Residential Construction Wage Rates
2. SSB 5904
 Defining Independent Contractors
20 20

21. SB 5903 – Residential Wages
 What is residential construction?
 quot;Residential constructionquot; means construction,
alteration, repair, improvement, or maintenance of
single family dwellings, duplexes, apartments,
condominiums, and other residential structures not to
exceed four stories in height, including basement, when
used solely as permanent residences. It does not include
the utilities construction (water and sewer lines), or
work on streets, or work on other structures (e.g., for
recreation and business.)
WAC 296-127-010 (9)
21 21

22. SB 5903 – Residential Wages
 Amends RCW 39.12.030
 Specs: Public Works specs must:
1. Include applicable prevailing wage rates
2. Require that workers be paid not less than
the prevailing wage rate
3. If work is subject to residential prevailing
wage rates, include that information
22 22

23. SB 5903 – Residential Wages
 SB 5903 addresses the following:
1. Residential wage rates are to be listed in
the contract documents
2. If it is later determined that commercial
wages apply, the public agency must pay
the difference
23 23

24. SSB 5904 – Independent Contractor
 Problem:
 Misclassification of workers as independent
contractors instead of employees
 Example: Carpet installation
 Abuse:
 By misclassifying workers as independent contractors,
contractors avoid paying:
 Workers Compensation
 Prevailing Wages
 Solution:
 Provide standards for when an individual is an
independent contractor and not considered a worker
subject to prevailing wages
24 24

25. SSB 5904 – Independent Contractor
 Summary:
 If an individual has various characteristics typical of a
business then he/she may be considered a business
(independent contractor) and not a worker subject to
prevailing wages
 Impact on Public Agencies:
 L&I enforcement issue
 Contract L&I if you have concerns
 Awareness as part of monitoring prevailing wages
25 25

26. SSB 5904 – Independent Contractor
 Not considered to be a worker (and therefore
considered a independent contractor) when:
1. Independence: Individual is free from control or
direction in performing the work
– A worker receives direction; an independent
contractor receives general direction with
respect to compliance with specifications
– Are there multiple independent contractors
working under one contractor or subcontractor,
or should they be workers subject to prevailing
wages?
– Does the worker provide their own tools or does
employer provide them?
26 26

27. SSB 5904 – Independent Contractor
 Not considered to be a worker (and therefore
considered a independent contractor) when:
2. What’s Normal? Work performed by individual is:
 Outside usual course of business for the
contractor the individual performs services for,
or
 Outside of all places of business of the
enterprise the individual performs services for,
or
 Individual is responsible for costs of principal
place of business from which the service is
performed.
27 27

28. SSB 5904 – Independent Contractor
 Not considered to be a worker (and therefore considered a
business) when:
3. Separate Business: Individual:
 “Is customarily engaged in an independently established
trade…of the same nature” as the services provided, or
 Has a principal place of business that is eligible for a
business deduction for federal income tax purposes
4. Tax Filings: Individual is responsible for filing a schedule
of expenses with the IRS for the type of business
individual is conducting.
5. State Registrations: Individual is registered with
Department of Revenue, has UBI number, and has active
and valid accounts with other applicable state agencies.
28 28

29. SSB 5904 – Independent Contractor
 Not considered to be a worker (and therefore
considered a business) when:
6. Separate Books: The individual maintains a separate set
of books or records reflecting income and expenses of
the business which the individual is conducting.
7. Registered as a Contractor: Nature of work performed
requires registration as a contractor and the individual is
registered.
29 29

30. HB 1195 – Payment on Change Order Work
 Problem being addressed:
 Agencies that do not execute change orders (or pay on
change order work) until the end of the project
 New Requirement in RCW 39.04:
 No later than 30 days after satisfactory completion of
 Any additional work, or
 Portion of additional work
 Agency shall issue a change order for the full dollar amount of
the work not in dispute
 If such change order not issued within 30 days
 Interest accrues on amount satisfactorily completed and not in
dispute
 Additional work “is work beyond the scope defined in the
contract.” Does not sanction cardinal changes.
30 30

31. HB 1195 – Payment on Change Order Work
 Scenario:
 Additional work performed
 Through field order authorization
 Based on unit prices
 All work satisfactorily completed
 How much is owed
 Owner and Contractor agree on $85,000
 Owner and Contractor in dispute about value of remaining
portion of work
 Issue change order for the $85,000
 Resolve the disputed amount
 Who defines “satisfactorily completed”?
 Owner – normally don’t pay if work not satisfactory
 Both parties must agree on amount or it’s in dispute
31 31

32. HB 1199 – Retainage Clean-up
 Repeals various laws that relate to public works
contracts entered into prior to September 1, 1992
 Changes references in other laws
Old Laws Repealed Current Law Subject
RCW 60.28.010 RCW 60.28.011 Retainage
RCW 60.28.020 RCW 60.28.021 Retainage
RCW 60.28.050 RCW 60.28.051 Retainage
RCW 39.76.010 RCW 39.76.011 Prompt Payment
32 32

33. SHB 1555 - Underground Economy
1. Purpose of Retainage
2. Notification to State Agencies
3. Obtaining State Releases
4. Priority of Claims Against Retainage
5. Outstanding Issues
6. Business Licenses & Contractor Registration
33 33

34. SHB 1555 - Underground Economy
Purpose of Retainage
Current Law New Law
Prevailing Wage workers Prevailing Wage workers
Subcontractors and Suppliers Subcontractors and Suppliers
Department of Revenue Department of Revenue
Employment Security Dept.
Dept. of Labor & Industries
34 34

35. SHB 1555 - Underground Economy
Notification to State
Current Law New Law
Department of Revenue Department of Revenue
Employment Security Dept. Employment Security Dept.
- Through Revenue
Dept. of Labor & Industries
35 35

36. SHB 1555 - Underground Economy
Obtaining State Releases
Current Law New Law
Department of Revenue Department of Revenue
Employment Security Dept. Employment Security Dept.
- By practice
Dept. of Labor & Industries Dept. of Labor & Industries
- By practice
- Employer Liability Certificate
printed online by awarding agency or
contractor
36 36

37. SHB 1555 - Underground Economy
Revised Priority of Claims
# Current law New law
1 Workers not paid prevailing Workers not paid prevailing
wages wages
2 Dept. of Revenue – taxes due on Dept. of Revenue – taxes due on
public works project public works project
3 Subcontractors and suppliers Dept. of Revenue – taxes due on
other projects
4 Other taxes due – Dept of ESD and L&I for taxes due on
Revenue for other projects, ESD, public works project
L&I, IRS, etc.
5 The Owner Subcontractors and suppliers
6 Other taxes due (ESD, L&I for
taxes due on other projects; other
taxes)
37 7 The Owner 37

38. SHB 1555 - Underground Economy
Outstanding Issues
1. L&I Release: L&I doesn’t issue a release certificate, but
new law requires it
 L&I, ESD, and Revenue are meeting to coordinate actions regarding
notification and certificates
2. Access to Retainage: L&I and ESD have long claimed to
be able to collect from public agencies for unpaid
premiums directly and not from retainage
 RCW 51.12.050 (Workers Compensation)
 RCW 50.24.130 (Unemployment Compensation)
3. Subcontractor Concerns: Subcontractors and Suppliers
may push for amended legislation
38 38

39. SHB 1555 - Underground Economy
Outstanding Issues
4. Conflict between $35,000 vs. $20,000
 Dept. of Revenue Threshold for Priority of Claims:
 Only for Revenue claims on this project, not other
projects
Current Law HB 1199 SHB 1555
$20,000 $35,000* $20,000
*Clean-up legislation of what should have been addressed in 2007
39 39

40. SHB 1555 - Underground Economy
Outstanding Issues
4. Conflict between $35,000 vs. $20,000 – SHB 1555, section 7
 (1) Subject to subsection (5) of this section, the amount of all taxes,
increases, and penalties due or to become due under Title 82 RCW, from
a contractor or the contractor’s successors or assignees with respect to a
public improvement contract wherein the contract price is twenty
thousand dollars or more, shall be a lien prior to all other liens upon the
amount of the retained percentage withheld by the disbursing officer
under such contract
 (2) Subject to subsection (5) of this section, after payment of all taxes,
increases, and penalties due or to become due under Title 82 RCW, from
a contractor or the contractor’s successors or assignees with respect to a
public improvement contract wherein the contract price is twenty
thousand dollars or more, the amount of all other taxes, increases, and
penalties under Title 82 RCW, due and owing from the contractor, shall
be a lien prior to all other liens upon the amount of the retained
percentage withheld by the disbursing officer under such contract.
Subsection 1 Subsection 2 Subsection 3
Revenue – this project Revenue – this project ESD and L&I
$20,000 (SHB 1555) $20,000 (SHB 1555)* $20,000 (SHB 1555)
$35,000 (HB 1199) * Referring back to this project mentioned in Subsection 1
40 40

41. SHB 1555 - Underground Economy
Outstanding Issues
4. Conflict between $35,000 vs. $20,000
 Notification Responsibilities: SHB 1555 requires
public agencies to only notify Revenue, ESD, and
L&I of projects over $35,000 (RCW 60.28.051)
 Claim Rights of State Agencies: SHB 1555 only
gives them claim rights for contracts of $20,000 or
more, leaving gap between $20,000 and $35,000
when awarding agencies must notify State
agencies.
 Current ESD Threshold: SHB 1555 uses $20,000 for
Employment Security and L&I releases when
current practice is $35,000 for ESD.
41 41

42. SHB 1555 - Underground Economy
Business Licenses & Contractor Registration
 List of Subcontractors: “A contractor must maintain and have
available for inspection by the department a list of all direct
subcontractors and a copy of their certificate of registration.”
(RCW 18.27)
 Verify Registration Before Business License: An agency “that
issues a business license to a person required to be registered
under chapter 18.27 RCW may verify that the person is registered
under chapter 18.27 RCW and report violations to the department
of labor and industries.”
 Agencies Affected:
 Cities: RCW 35.21 (cities and towns), 35A.21 (code cities)
 Counties: RCW 36.01
 “The department of licensing shall conduct the verification for
cities that participate in the master license system.
42 42

43. HB 1197 – Alternative Public Works
 Design-Build
 Threshold Amount: Allows for 10 Design-Build projects
with a total project cost between $2 and $10 million
 June 2010 report to CPARB due
 DBOM: Allows for 2 Design-Build projects that include
procurement of operations and maintenance services
for a period longer than 3 years
 Honorarium: Allows honorarium payments to Design-
Build finalists submitting “responsive” proposals,
rather than “best and final.”
 Owner may not always use “best and final” process
43 43

44. HB 1197 – Alternative Public Works
 GC/CM
 Requires public bid openings for GC/CM submission of their
prices
 Previous scores must be open for public review at bid
opening
 Job Order Contracting
 Allows UW, GA, and WSU to issue job order contract work
orders for regional universities and The Evergreen State
College
44 44

45. HB 1197 – Alternative Public Works
 Certification of Public Bodies
 GC/CM: For GC/CM certification, must demonstrate
successful management of at least one GC/CM project
within last 5 years.
 Design-Build: For Design-Build certification, must
demonstrate successful management of at least one
Design-Build project within last 5 years.
45 45

46. Attorney General Opinion on Housing Authorities
 Are Housing Authorities subject to RCW 39.10?
 Definition of Public Body: Housing Authorities are a quot;public
body“
 Exemption? Housing authorities have pointed to RCW
35.82.070, arguing they are not subject to various state laws
quot;unless the legislature shall specifically so state.quot;
 Limited application of Exemption: Provision only applies to
laws quot;with respect to the acquisition, operation or disposition
of property.“
 Exemption not applicable to Alternative Public Works:
Attorney General stated that chapter 39.10 RCW is quot;not a
statute relating to the acquisition, operation, or disposition of
property, and therefore, RCW 35.82.070(10) does not exempt
public housing from the provisions of RCW 39.10.“
Attorney General Opinion 2009, No. 2, issued on April 24, 2009
46 46

47.  HB 1200 – Bid Negotiation: Would have
permitted municipalities (not just the State) to
negotiate an adjustment to the bid price with the
low responsive bidder subject to various
conditions.
 EHB 1836 – Off-Site Prefabrication: Would have
required reporting by agencies of information
related to out-of-state off-site prefabrication.
 SSB 5969 – Listing of Subcontractors: Would
have removed requirement that substituted
subcontractor prove that they were substituted
“in furtherance of bid shopping.” Added other
reasons for legitimate substitution.
47

48.  HB 1690 – Applicability of Alternative Public
Works: Would have clarified the intent of the
legislature that only the Alternative Public Works
Contracting procedures outlined in chapter 39.10
RCW were authorized.
 HB 1830 – Small Works Roster Use of Small
Businesses: Would have defined
microbusiness, minibusiness, and small business
based on gross revenue and permitted solicitation
of only these businesses when using the Limited
Public Works process under the Small Works
Roster.
48

49. EHB 1513 – Municipality Financing Participation
RCW 35.91.020
 This RCW is known as the Municipal Water and Sewer
Facilities Act
 Applies to cities, towns, counties, water-sewer
districts, and drainage districts (“municipalities”)
 Allows developers to be reimbursed by subsequent
developers for constructing water, sewer and stormwater
facilities that serve undeveloped property
 EHB 1513 allows a municipality to initiate a latecomer
agreement on its own or to contribute funds to a
developer project and to be reimbursed proportionately
6/4/2009 49

50. EHB 1513 – Municipality Financing Participation
 Ch. 35.72 RCW is a similar statute that provides for
reimbursement for transportation facilities
 Ch 35.72 RCW already allows a city, town, or county to
initiate a latecomer agreement on its own or to contribute
funds to a developer transportation facilities project and to
be reimbursed proportionately
6/4/2009 50

51. EHB 1513 – Municipality Financing Participation
 Neither EHB 1513 nor the existing ch. 35.73 RCW address the
fundamental issues of public works contracting and prevailing
wages
 If a municipality participates in a latecomer agreement, does that
participation make the work included in the latecomer agreement a public
works project?
 MRSC suggested the additional language on the next slide to
address this issue, but it was not included in the bill
 AWC will seek to have this language included in then 2010
session
6/4/2009 51

52. EHB 1513 – Municipality Financing Participation
 MRSC suggested the following additional language:
 If a municipality joins in the financing of an improvement project for water or
sewer facilities, but construction is done by an owner of real estate,
construction of the facilities is subject to prevailing wages under chapter 39.12
RCW, but is not subject to public works bid law. If a municipality creates an
assessment reimbursement area on its own initiative, without the participation
of a private property owner, then construction of the facilities is subject to
prevailing wages under chapter 39.12 RCW, and subject to public works bid
law.
 If a county, city or town joins in the financing of a transportation
improvement project , but construction is done a by an owner of real estate,
construction of the facilities is subject to prevailing wages under chapter 39,12
RCW, but is not subject to public works bid law. If a county, city or town
creates an assessment reimbursement area on its own initiative, without the
participation of a private property owner, then construction of the
improvement project is subject to prevailing wages under chapter 39,12 RCW,
and subject to public works bid law.
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53.  SB 6173 - Improving Sales Tax Compliance
 Makes the purchase of materials and subcontractor services for
construction retail sales
 Requires contractors and other construction businesses to pay
retail sales tax after January 1, 2010.
 Construction businesses would be allowed to claim a credit on
their excise tax returns for the amount of retail sales or use
taxes already paid on the purchase or use of materials or paid by
subcontractors.
 The bill provides sales and use tax exemptions to maintain
eligibility for construction projects under sales and use tax
deferral certificates or specific exemptions.
 Does not directly impact agencies in terms of reporting,
but may impact costs.
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54. Experience: Mike Purdy has more than 29 years of experience as a
manager in public contracting and procurement in Seattle. He is the Contracts
Manager for the University of Washington’s Capital Projects Office and is
responsible for managing design and construction contracts for more than $1
billion worth of projects at the University. Before joining the UW in 2005, he
spent five years at the Seattle Housing Authority where he served as
Contracting and Procurement Manager, overseeing all of the contracting and
purchasing (construction, design consultants, other consultants, goods,
supplies, and services) for the largest residential landlord in the state. Prior to
that he worked for the City of Seattle for more than 21 years, where he
administered the City’s construction and consultant contracts as the City’s
Contracting Manager.
He is also the principal of Michael E. Purdy Associates
(www.mpurdy.com), a consultant firm established in 2005 to help public
agencies and businesses develop and implement effective contracting
strategies, solve complex contracting problems, and obtain tailored training in
contract administration. He maintains the popular Public Contracting Blog at
http://PublicContracting.blogspot.com.
Education: He has a bachelor’s degree in business and public
administration and an MBA, both from the University of Puget Sound, and a
master of divinity degree from Fuller Theological Seminary.
6/4/2009 54

55. Michael E. Purdy
Contracts Manager
University of Washington
Capital Projects Office
(206) 221-4235
mpurdy@u.washington.edu
55 55

56. John W. Carpita
Public Works Consultant
Municipal Research and Services Center
(206) 625-1300
jcarpita@mrsc.org
56 56