GOVERNMENT CONTRACTS, CONSTRUCTION AND PROCUREMENT POLICY PRACTICE GROUP
E-NEWS — JUNE 23, 2005
Public Projects in Washington State Will Be Affected
Recent developments in the use of General Contractor/Construction Manager (GC/CM) contracting procedures for public projects in the state of Washington will soon affect public owners. A recently issued legislative report together with a newly created oversight committee may result in expansion, modification or elimination of a public owner’s authority to use GC/CM project delivery method.
The GC/CM approach has been used extensively in the private sector for decades. In an effort to expedite prison construction and ease overcrowding in 1991, the state legislature first authorized use of the GC/CM contracting method on public works, while limiting the authority to General Administration and the Department of Corrections. The authority has since been expanded to include four state agencies and several large local governments, ports, public utility districts, school districts and hospital districts. Without legislative action, the statutory authorization allowing public owners to utilize GC/CM as well as design-build project delivery methods will expire in 2007. Several efforts are currently underway to assist the legislature in making its decision as to the future of alternate procurement methods in Washington.
During the 2005 session, the Legislature passed Engrossed Substitute House Bill 1830, establishing the Capital Projects Review Board (Board). The Board is charged with evaluating various methods of delivering public works projects and will ultimately advise the Legislature on policies related to:
- criteria to use in assessing the effective and feasible use of such alternative methods;
- qualification standards for general contractors bidding on alternative public works projects;
- increasing the "quality, efficiency and accountability" of capital construction projects;
- the "expansion, continuation, elimination or modification" of the alternative public works authority; and
- other potential alternative contracting procedures, including competitively negotiated contracts.
The Board is also charged with evaluating and making recommendations regarding traditional project delivery methods. The Board will be comprised of gubernatorial appointees, including four legislators; representatives from the design, contracting and insurance communities; two representatives of local public owners; and nonvoting members from the public hospital district and school district project review boards. The Board is scheduled to convene later this summer.
The Board's work will no doubt be influenced by a report which was recently issued by a legislative committee. Specifically, the 2003-05 Capital Budget directed the Joint Legislative Audit and Review
Committee (JLARC) to evaluate the use of GC/CM contracting procedures in major public works projects in order to provide a better understanding of Washington State's GC/CM experience. JLARC's
Preliminary Report, entitled "An Assessment of General Contractor/Construction Manager Contracting
Procedures" is now available for review on JLARC's website: http://jlarc.leg.wa.gov. This report
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contains detailed findings and recommendations regarding the GC/CM contracting method. It also highlights various concerns raised by contractors and subcontractors.
JLARC considered the report's findings and recommendations at its June 22, 2005 meeting. Several of the legislators serving on JLARC expressed interest in requiring local public agencies that utilize the
GC/CM and other alternative contracting methods to report cost and other project performance data to the Office of Financial Management. At this time, only state agencies are required to report such information. JLARC ultimately approved the report and authorized its distribution. Given the report’s recommendations as well as the overlap of the representatives on JLARC and the legislative members of the Board, the report's recommendations will undoubtedly impact the scope of the Board's work and accordingly, the future of the GC/CM contracting method.
We encourage all public owners to review the report. Comments can be directed to Ann Daley at
JLARC.
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