HB 1897 — Concerning ensuring fairness and compliance with public works and procurement practices.

H-4284.1SUBSTITUTEH-1369.1HOUSE HOUSE BILL 18971897State (Corrected Copy)State of Washington65th Legislature2018Legislature2017 Regular SessionBy House Technology & Economic Development (originally sponsored by Representatives Gregerson, Santos, and Stanford)READStanfordRead FIRSTfirst TIMEtime 01/31/18.AN02/02/17. ACT Relating to ensuring fairness and compliance with public works and procurement practices;

amendingReferred RCWto 39.19.020,Committee 39.19.060,on 39.19.080,Technology 39.19.090,& 39.19.200,Economic 39.19.250,Development.AN 39.04.155,ACT Relating to ensuring fairness and 39.12.040;compliance with public works and procurement practices;

amending RCW 39.19.020, 39.19.060, 39.19.080, 39.19.090, 39.19.200, 39.19.250, and 39.04.155;

For limited public works projects, a state agency or authorized local government may waive the payment and performance bond requirements of chapter 39.08 RCW and the retainage requirements of ((chapterchapter 60.28))60.28 RCWRCW, 60.28.011(1)(a), thereby assuming the liability for the contractor's nonpayment of laborers, mechanics, subcontractors, materialpersons, suppliers, and taxes ((imposed under Title)), increases, and penalties imposed under TitlesTitle 50, 51, and 82 RCW that may be due from the contractor for the limited public works project, however the state agency or authorized local government shall have the right of recovery against the contractor for any payments made on the contractor's behalf.(4) The breaking of any project into units or accomplishing any projects by phases is prohibited if it is done for the purpose of avoiding the maximum dollar amount of a contract that may be let using the small works roster process or limited public works process.(5)(((a) A state agency or authorized local government may use the limited public works process of subsection (3) of this section to solicit and award small works roster contracts to small businesses that are registered contractors with gross revenues under one million dollars annually as reported on their federal tax return.(b) A state agency or authorized local government may adopt additional procedures to encourage small businesses that are registered contractors with gross revenues under two hundred fifty thousand dollars annually as reported on their federal tax returns to submit quotations or bids on small works roster contracts.(6) As used in this section,)) A state agency or authorized local government may use the limited public works process in this section to solicit and award small works roster contracts to minibusinesses and microbusinesses as defined under RCW 39.26.010 that are registered contractors.(6) The department of enterprise services shall work with the municipal research and services center to notify local governments authorized to use small works rosters of this authority and to provide guidance on how to use the authority.

The guidance may take the form of a manual provided to local governments.(7) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.(a) "Equitably distributes" means that a state agency or authorized local government may not favor certain contractors on the appropriate small works roster over other contractors on the same roster who perform similar services.(b) "State agency" means the department of enterprise services, the state parks and recreation commission, the department of natural resources, the department of fish and wildlife, the department of transportation, any institution of higher education as defined under RCW 28B.10.016, and any other state agency delegated authority by the department of enterprise services to engage in construction, building, renovation, remodeling, alteration, improvement, or repair activities.(8) The joint legislative audit and review committee must review the implementation of the changes to the small works roster and limited public works processes in this section and report to the governor and appropriate committees of the legislature by December 1, 2019.2018.

and(b) Barriers to improving the participation rate of qualified minority and women-owned and controlled businesses and the growth of minibusinesses and microbusinesses in the small works roster and limited public works contracting processes.Sec. 9.  RCWprocesses.NEW 39.12.040SECTION.  Sec. 9.  The andfollowing 2013acts cor 113parts sof 5acts are each amendedrepealed:(1) toRCW read39.19.100 as(Enforcement follows:(1)(a) Except as provided in subsection (2) of this section, before payment is made by orattorney ongeneral—Injunctive behalfrelief) of the state, or any county, municipality, or political subdivision created by its laws, of any sum or sums due on account of a public works contract, it is the duty of the officer or person charged with the custody and disbursement1987 ofc public328 fundss to12; require the contractor and each and every subcontractor from the contractor or a subcontractor to submit to such officer a "Statement of Intent to Pay Prevailing Wages".

For a contract in excess of ten thousand dollars, the statement of intent to pay prevailing wages must include:(i) The contractor's registration certificate number;

and(ii) The prevailing rate of wage for each classification of workers entitled to prevailing wages under RCW 39.12.020 and the estimated number of workers in each classification.(b) Each statement of intent to pay prevailing wages must be approved by the industrial statistician of the department of labor and industries before it is submitted to the disbursing officer.

Unless otherwise authorized by the department of labor and industries, each voucher claim submitted by a contractor for payment on a project estimate must state that the prevailing wages have been paid in accordance with the prefiled statement or statements of intent to pay prevailing wages on file with the public agency.

Following the final acceptance of a public works project, it is the duty of the officer charged with the disbursement of public funds, to require the contractor and each and every subcontractor from the contractor or a subcontractor to submit to such officer an affidavit of wages paid before the funds retained according to the provisions of RCW 60.28.011 are released to the contractor.

On a public works project where no retainage is withheld ((pursuant to RCW 60.28.011(1)(b))), the affidavit of wages paid must be submitted to the state, county, municipality, or other public body charged with the duty of disbursing or authorizing disbursement of public funds prior to final acceptance of the public works project.

If a subcontractor performing work on a public works project fails to submit an affidavit of wages paid form, the contractor or subcontractor with whom the subcontractor had a contractual relationship for the project may file the forms on behalf of the nonresponsive subcontractor.

Affidavit forms may only be filed on behalf of a nonresponsive subcontractor who has ceased operations or failed to file as required by this section.

The contractor filing the affidavit must accept responsibility for payment of prevailing wages unpaid by the subcontractor on the project pursuant to RCW 39.12.020 and 39.12.065.

Intentionally filing a false affidavit on behalf of a subcontractor subjects the filer to the same penalties as are provided in RCW 39.12.050.

Each affidavit of wages paid must be certified by the industrial statistician of the department of labor and industries before it is submitted to the disbursing officer.(2) As an alternate to the procedures provided for in subsection (1) of this section, for public works projects of two thousand five hundred dollars or less and for projects where the limited public works process under RCW 39.04.155(3) is followed:(a) An awarding agency may authorize the contractor or subcontractor to submit the statement of intent to pay prevailing wages directly to the officer or person charged with the custody or disbursement of public funds in the awarding agency without approval by the industrial statistician of the department of labor and industries.

The awarding agency must retain such statement of intent to pay prevailing wages for a period of not less than three years.(b) Upon final acceptance of the public works project, the awarding agency must require the contractor or subcontractor to submit an affidavit of wages paid.

Upon receipt of the affidavit of wages paid, the awarding agency may pay the contractor or subcontractor in full, including funds that would otherwise be retained according to the provisions of RCW 60.28.011.

Within thirty days of receipt of the affidavit of wages paid, the awarding agency must submit the affidavit of wages paid to the industrial statistician of the department of labor and industries for approval.(c) A statement of intent to pay prevailing wages and an affidavit of wages paid must be on forms approved by the department of labor and industries.(d) In the event of a wage claim and a finding for the claimant by the department of labor and industries where the awarding agency has used the alternative process provided for in this subsection (2), the awarding agency must pay the wages due directly to the claimant.

If the contractor or subcontractor did not pay the wages stated in the affidavit of wages paid, the awarding agency may take action at law to seek reimbursement from the contractor or subcontractor of wages paid to the claimant, and may prohibit the contractor or subcontractor from bidding on any public works contract of the awarding agency for up to one year.(e) Nothing in this section may be interpreted to allow an awarding agency to subdivide any public works project of more than two thousand five hundred dollars for the purpose of circumventing the procedures required by subsection (1) of this section.NEW SECTION.  Sec. 10.  The following acts or parts of acts are each repealed:(1) RCW 39.19.100 (Enforcement by attorney general—Injunctive relief) and 1987 c 328 s 12;