Legislators Change Public Contracting Laws —
Get Ready to Revise Those Local Contracting Rules!

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The Oregon State Legislature adjourned earlier this summer with several important changes affecting public governments, especially in the public contracting arena. The following is a summary of a few important bills — such as a Qualifications Based Selection ("QBS") requirement for procurement of architects, engineers, land surveyors, and related services for construction and an enhanced "Made in Oregon" preference — that were passed during the legislative session, most of which will require amendments to your local contract review board rules.

House Bill 3316 — QBS Process for Architects, Engineers, Photogrammetric Mapping, and Transportation Planning added to the List of Services Subject to Procedures for Contracting with Architects, Engineers, and Land Surveyors, Effective June 11, 2011, Operative January 1, 2012. Although state agencies have been required to use QBS for architects, engineers, land surveyors, and related services since March 2005, cities and special districts have been able to consider pricing when engaging such personal services, as long as not more than 10 percent of a project was paid for with money from the state highway fund and the value of the project exceeded $900,000. House Bill 3316 removes those thresholds. Now all contracting agencies will be required to use QBS for architects, engineers, land-surveying services and related services, and — in addition — photogrammetric mapping and transportation planning services.

Photogrammetric mapping services are the "evaluating and measuring of land that is limited to the determination of the topography, area, contours and location of planimetric features, by using photogrammetric methods or similar remote sensing technology, including but not limited to using existing ground control points incidental to the photogrammetric or remote sensing mapping process." See ORS 672.002(7). The 2011 Legislature has determined that public contracting laws shall include these services, as well as those of transportation planners, within the definition of "personal services" and within the purview of QBS.

Direct appointment for projects where the estimated cost of the personal services does not exceed $100,000 is allowed, and a contracting agency may adjust the procedure to accommodate the agency's scope, schedule, and objectives for the particular project if the estimated cost of the personal services for the project does not exceed $250,000.

Although the bill contained an emergency clause and became effective on June 11, 2011, the provisions do not become operative until January 1, 2012, in order to allow local contracting agencies to modify their local contract review board rules accordingly.

House Bill 3000 — Permissive Preference for Local Goods and Services, Effective June 7, 2011, Operative January 1, 2012. House Bill 3000 extends the 10 percent local preference for agricultural goods produced and transported entirely within the state of Oregon to goods that are fabricated or processed entirely within Oregon and services, including personal services, also performed entirely within the state. The result is that, notwithstanding the lowest cost rule, contracting agencies may decide to pay up to 10 percent more for goods fabricated or processed or services performed entirely within the state. If more than one bidder qualifies for this preference, the contracting agency may decide to give an additional preference to a qualifying bidder or proposer that resides in or is headquartered in Oregon. Emergency work, minor alterations, repairs, or maintenance (those projects not deemed to be public works pursuant to ORS 279C.320) are excluded from this rule. The bill also allows contracting agencies to set the preferences higher than 10 percent if the agency finds good cause.

Although the bill contained an emergency clause and became effective on June 7, 2011, the provisions do not become operative until January 1, 2012, in order to allow local contracting agencies to modify their local contract review board rules accordingly.

Senate Bill 178 — Comparison of State and Federal Prevailing Wage Rates, Effective June 7, 2011, Operative January 1, 2012. This bill removes the requirement that the Bureau of Labor and Industries compare state and federal wage rates and make results available. It also removes the requirement that public agencies include information about which wage rate is higher for workers in each trade or occupation in each locality but maintains the requirement that contractors and subcontractors in public works contracts pay the higher rate of wage. Another bill passed by the 2012 Legislature changes the penalties for failure to comply with the Oregon prevailing rate of wage provisions.

Give me a call, or send me an e-mail, if you have any questions about these changes or other actions from the legislative session.

Summer 2011

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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