Public procurement service contract

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What are Purchased Services?

State law does not provide an overarching definition of “purchased services” for local governments, as there are generally few specific statutory requirements. However, there is a definition in RCW 53.19.010 (in the context of personal services for port districts) that is still useful for other types of government agencies:

“Purchased services” means services provided by a vendor to accomplish routine, continuing, and necessary functions. […]

Purchased services mostly relate to physical activities that are usually repetitive, routine, or mechanical in nature, support the agency’s day-to-day operations, involve the completion of specific tasks or projects, and involve minimal decision-making. Examples include, but are not limited to:

Practice Tip: There are some gray areas between purchased services and public works that can cause confusion, as discussed later on this page. Purchased services should also not be confused with personal services & consultant contracts, which are mostly intellectual in nature and usually tailored to the unique needs of each organization.

Competitive Process

Local governments in Washington have no statutory requirements for soliciting purchased service contracts. This means that the state has not established bid limits, advertising, bonding, retainage, or responsibility requirements when procuring and contracting for purchased services. As a result, local governments generally have significant flexibility in determining competitive requirements.

However, if the project includes federal funding, the funding conditions may require a specific solicitation process. Even with no statutory requirements for competition, some purchased service contracts require the payment of prevailing wages as discussed later on this page.

Estimated project amounts may determine whether a project is a fit for minimal, informal, and formal competition. Complex technical requirements, long contact duration, or high-risk work/safety concerns may also factor into an agency's decision for a more rigorous competitive process. Local governments must consider their own resolutions, policies, and procedures to determine their own local contracting requirements for minimal, informal, and formal competition.

Suggested competitive procedures and dollar limit thresholds are available in “Table D-Soliciting for Purchased Services” of MRSC's publication Contracting for Services.

There are two general solicitation processes that agencies can use to procure purchased services: an invitation to bid (ITB) and a request for proposals (RFP).

Invitations to Bid

ITBs are typically used for purchased services that are very straightforward, where price is the basis of award. With an ITB, a reasonable time is given for prospective bidders to respond, bids are opened, and the contract is awarded to the lowest bidder. At a minimum, every ITB should include:

Requests for Proposals

If an agency intends not to use price alone as the general basis for award, an agency could use a request for proposals instead of an ITB. RFPs ask proposers to submit qualifications, if not already on file, and a proposed scope of services in response to the agency’s specific needs. At a minimum, every RFP should include:

Other common RFP elements include:

Janitorial Services (Building Service Maintenance)

Janitorial services, also known as public building service maintenance contracts, typically fall under the scope of purchased services for procurement purposes. As a purchased service, janitorial services would not be subject to public works bidding laws, but prevailing wages are still required by RCW 39.12.020. Agencies should also consider whether to require bonds to protect against potential claims from workers not paid prevailing wages.

WAC 296-127-023 defines “public building service maintenance contracts” to “mean janitorial service contracts and cover only work performed by janitors, waxers, shampooers, and window cleaners.” Also see the job duties defined in WAC 296-127-01308.

In addition, WAC 296-127-023 requires any building service maintenance contracts longer than one year to include language specifying the potential for wages to be altered after the first year in accordance with the latest prevailing wage rates. The cost of any future prevailing wage increases must be borne by the awarding agency.

Examples of janitorial service solicitations and contracts are provided in the Examples section at the end of this webpage.

For more on the relationship between purchased services, public works, and prevailing wages (including discussion of bonds), see the next section.

Purchased Services, Public Works, and Prevailing Wages

When it comes to maintenance contracts, there are some gray areas between purchased services and public works that often cause confusion. There are important differences between public works contracts and purchased service contracts; to clarify these issues, it is helpful to answer the following questions:

  1. Should the contract be procured as a public work, subject to public works bid laws?
  2. If not, does the contract require prevailing wages?

Important: The following guidance is for informational purposes only. The answer may depend on the facts of the situation, and a small detail regarding the scope of work could convert a purchased service contract into a public works contract or vice versa.

If you are uncertain whether a particular contract should be procured as a public work or purchased service, or whether a particular scope of work requires the payment of prevailing wages, see L&I’s Scopes of Work Listing and Prevailing Wage Policies and Determinations, or contact L&I directly at pw1@lni.wa.gov or 1-855-545-8163.

If you are still unsure, the conservative approach would be to bid the contract as a public work.

1. Should the Contract Be Procured as a Public Work?

Generally speaking, a public works contract requires a more rigorous solicitation process and more paperwork, and public works procurement methods are not necessarily appropriate for service providers.

Public works contracts must be awarded to the lowest responsible bidder, and many purchased service contracts are also awarded to the lowest bidder. However, purchased service contracts that are solicited through a request for proposals may be awarded based on a variety of criteria including cost, qualifications, experience, references, equipment, and more.

If a contract meets the statutory definition of “public work” in RCW 39.04.010, it should be procured as a public works contract:

"Public work" means all work, construction, alteration, repair, or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality, or which is by law a lien or charge on any property therein. [emphasis added]

The exclusion of “ordinary maintenance” from the definition of “public work” in chapter 39.04 RCW can be interpreted as excluding ordinary maintenance from the public works competitive procurement processes.

So what is ordinary maintenance? Unfortunately, chapter 39.04 RCW does not define the term “ordinary maintenance” for the purposes of public works bidding, although there are administrative rules defining the term for the purposes of prevailing wage laws under separate statutes as described below.

2. Does the Contract Require Prevailing Wages?

If a contract is procured as a public work, prevailing wages are required regardless of the size of the contract. However, some purchased service contracts still require the payment of prevailing wages even if they are not procured as public works.

In addition to defining the term “public work,” RCW 39.04.010 says that “[a]ll public works, including maintenance when performed by contract shall comply with chapter 39.12 RCW [prevailing wages].” This statute implies that ordinary maintenance may be exempt from public works competitive procurement processes but is clear that any contracted public works maintenance is subject to prevailing wage laws.

WAC 296-127-010(7) defines “public work” for the purposes of prevailing wage laws and uses a broader definition than that found in RCW 39.04.010 regarding competitive procurement processes. Among other things, the definition includes all paid “work, construction, alteration, enlargement, improvement, repair, and/or demolition that is executed by contract, purchase order, or any other legal agreement,” as well as maintenance performed by contract, except “ordinary maintenance.”

Maintenance is defined as “keeping existing facilities in good usable, operational condition.” “Ordinary maintenance” is not subject to prevailing wages, but WAC 296-127-010(7) limits the definition of ordinary maintenance to “maintenance work performed by the regular employees of the state or any county, municipality, or political subdivision…”

To summarize: Any public works maintenance – that is to say, maintenance of buildings, parks, roads, landscaping, or any other element of the built environment – executed by contract with a private (non-governmental) contractor requires the payment of prevailing wages, regardless of whether it was solicited as a public work or a service contract.

Examples of maintenance contracts that require the payment of prevailing wages include, but are not limited to:

Maintenance contracts do not include any public improvement. A janitorial contract does not improve the property. Likewise, contracts involving only tasks that keep the equipment in good running order (such as cleaning, adjustments, or lubrication) may be a maintenance contract and not a public improvement contract. However, maintenance that includes “work, construction, alteration, repair, or improvement” would be considered a public work and be subject to public works bid laws.

If a purchased service requires prevailing wages to be paid, L&I requires an Intent to be filed at the start of the contract, and an affidavit to be filed each year upon renewal if services are to be performed over multiple years.

It may also be a good idea to require performance and/or payment bonds to protect against potential claims from workers not paid prevailing wages. Retainage is also sometimes considered on service contracts with prevailing wages, but state law is not clear on these issues.

Mike Purdy has some observations on the subject in When Should Retainage and a Bond Be Obtained?, including:

Without further clarification from the state, it is up to local agencies to decide whether to withhold retainage and require bonds for service contracts, depending on the size of the project and the agency’s potential financial liability.

Practice Tip: If the purchased service requires prevailing wages, L&I recommends that the solicitation documents should include substantially the following information:

Examples of Purchased Service Contracts and Solicitations

Below are selected examples of purchased service contracts and solicitations.

Janitorial Services (Building Service Maintenance)

As a reminder, building service maintenance contracts longer than one year must comply with WAC 296-127-023 regarding prevailing wage increases.

Landscape Maintenance & Spraying Services

Other Public Works Maintenance Services