Personal Service Contracting for Washington State Ports

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Legislative Overview Personal Service Contracting Requirements and Procedures Personal Service Contracting Nuts, Bolts and Curveballs Agenda

    Second Substitute House Bill 3274 (Chapter 130, Laws of 2008) Sets out definitions, exemptions and competitive procedures for personal services contracting (PSC) MRSC and WPPA to jointly develop PSC Contracting Manual and provide training to Ports Ports must develop policies for personal services contracting based on PSC Manual

Chapter 53.19 RCW & RCW 53.08.440 PERSONAL SERVICE CONTRACTS

  Policies must apply to contracts entered into after January 1, 2010 PSC Manual available from ◦ Link from WPPA website to http://www.mrsc.org/Subjects/PubWorks/portsps c.asp

◦ ◦ Or purchase a published copy from MRSC: http://mrsc.org/publications/mrscpubs.aspx#orde rpubs

Chapter 53.19 RCW & RCW 53.08.440 PERSONAL SERVICE CONTRACTS

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Policy of open competition Different competitive requirements for personal and professional service contracts

What Do the Statutes Say about Personal Service Contracting?

 Personal Services ◦ Professional or technical expertise provided by a consultant to accomplish a specific study, project, task, or other work statement ◦ ◦  Which may not reasonably be required in connection with a public works project meeting the definition in RCW 39.04.010(4) Personal services do not include purchased services as defined in RCW 53.19.010(8) Personal services do not include professional services procured using the competitive selection requirements in Chapter 39.80 RCW (A&E). RCW 53.19.010(6) Page 13-15

Contract Types

 Not reasonably required in connection with a public works project ◦ Services that would otherwise be considered as personal services, but are ◦   reasonably required in connection with a public works project do not meet the general definitions of professional practice in Chapters 18.08, 18.43, or 18.96 RCW, as referenced in RCW 39.80.020(5).

See the discussion and practice tips under PSC Manual Section 2.3 (pages 4 and 5) for more information on these non-A/E services.

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Contract Types

 Purchased Services [RCW 53.19.010(8)] ◦ Services provided by a vendor to accomplish routine, continuing, and necessary functions. ◦        Purchased services include, but are not limited to: services for equipment maintenance and repair laundry and/or uniform supply services operation of a physical plant security computer hardware and software maintenance; data entry; key punch services computer time-sharing, contract programming, and analysis Page 13-15

Contract Types

 Professional Services (A&E) ◦ RCW 39.80.020(5) ◦ ◦ ◦ Professional services by a person firm, other than an agency employee Contracting to perform activities within the scope of professional practices listed in    Chapter 18.08 (Architects) Chapter 18.43 (Engineers and Land Surveyors) Chapter, or 18.96 (Landscape Architects). Services are procured using the qualifications based selection requirements in Chapter 39.80 RCW Page 13-15

Contract Types

 Chapter 53.19 RCW does not apply to: ◦ Tariff Contracts  Contracts awarded to companies that furnish a service where the tariff is established by the Washington Utilities and ◦ ◦ Transportation Commission (WUTC) or other public entity Intergovernmental Agreements  Intergovernmental agreements awarded to any governmental entity, whether federal, state, or local and any department, division, or subdivision thereof Standard Fee Contracts  Contracts awarded for services to be performed for a standard fee, when the standard fee is established by the Page 20-21

Does Not Apply

 Chapter 53.19 RCW does not apply to: ◦ Collaborative Research Contracts  Contracts for services that are necessary to the conduct of collaborative research if prior approval is granted by the funding source ◦ ◦ Contracts for professional services which are entered into under Chapter 39.80 RCW Expert Witnesses or legal services  Contracts for the employment of expert witnesses for the purposes of litigation or legal services to supplement the expertise of port staff Page 20-21

Does Not Apply

Non-Exclusive List of Personal Service Examples

Accounting services Grant writing Aerial photography (if not related to a public works project) Analysis and assessment of processes, Graphic design services Lobbying services Labor negotiations and labor relations programs, fiscal impact, compliance, systems, etc.

Appraisal services Economic analysis and consultation Environmental planning, technology, studies (except when part of a public works project) Executive recruitment Financial advisor services Feasibility study services (if not related to public works project) Foreign trade representative services services Management consulting marketing services to include identifying market opportunities, conduct marketing programs, planning, promotion, market research surveys, etc.

Medical and psychological services Organization development Public relations services Promotional services Strategic planning Training Page 15

Examples

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Tools in Chapter 2 of PSC Manual

◦ Quick Tips for Getting Started ◦ ◦ ◦ ◦ ◦ Statutory Procedure Matrix Flow Chart Personal Services Contract Size Chart Typical Formal Competitive Selection Process Schedule Personal Service Contract File Checklist

Definitions Requirements and Procedures

Overview

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Amendments Scope of Service Changes Sole Source Contracts Statutory Procedure Matrix Exemptions Emergency Contracts Conflict of Interest

Overview

   Consultant ◦ A consultant is an independent individual or firm contracting with a port to perform a service or render an opinion or recommendation according to the consultant’s methods and without being subject to the control of the port except as to the result of the work. RCW 53.19.010(3).

RFQ – Request for Qualifications RFP – Request for Proposals Page 13-15

Definitions

  Emergency – ◦ Set of unforeseen circumstances beyond the control of the port that either:  present a real, immediate threat to the proper  performance of essential functions; or may result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken.

RCW 53.19.010(4).

 Evidence of Competition – ◦ Documentation demonstrating that the port has solicited responses from multiple firms in selecting a consultant. ◦ ◦ RCW 53.19.010(5). (The port district’s own policies and procedures may be more restrictive.) Page 13-15

Definitions

   Competitive Solicitation for Personal Services – ◦ RCW 53.19.010(2).

◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ Documented formal process ◦ equal and open opportunity to qualified parties ◦ ◦ selection based on criteria criteria other than price may be the primary basis for consideration. The criteria may include such factors as ◦ fees or costs, ability, capacity, experience, reputation, responsiveness to time limitations, responsiveness to solicitation requirements, quality of previous performance, and compliance with statutes and rules relating to contracts or services. Page 13-15

Definitions

 Application (Proposal/Submittal) – ◦ Completed statement of qualifications or proposal ◦    request to be considered for the award of one or more contracts for personal services, submitted in response to either a request for qualifications/proposals or in response to a notice or advertisement for a consultant services roster Also called a proposal or submittal Page 13-15

Definitions

 Sole Source Consultant – ◦ RCW 53.19.010(9).

◦ ◦ A consultant providing professional or technical expertise of such a unique nature that the consultant is clearly and justifiably the only practicable source to provide the personal service. Justification is based on    uniqueness of the service sole availability at the location required warranty or defect correction service obligations of the consultant Page 13-15

Definitions

 The statute creates three levels of competition for personal service contracts: ◦ formal (must be used for contracts over $200K) ◦ ◦ informal (allowed for contracts under $200K) “minimal” (allowed for contracts under $50K) Page 19

Requirements and Procedures

 Formal competition implies ◦ publication of RFQ/RFP ◦ ◦ ◦ ◦ ◦ evaluation criteria probable evaluation committee probable interviews formal award by commission or port executive written contract

Requirements and Procedures

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 Informal Competition ◦ publication not required ◦ ◦ ◦ ◦ ◦ ◦ ◦ must request proposals from and/or conduct interviews with multiple firms evaluation criteria possible evaluation committee possible interviews award by commission or Port Executive written contract see page 27 of PSC Manual Page 19

Requirements and Procedures

 Minimal Competition ◦ port commission and executive set policies ◦ ◦ ◦ ◦ seeking competition is not required by the statutes, but is recommended, and use of a roster is encouraged telephone calls can be made to firms or individuals describing the services desired and requesting price, schedule and qualifications to perform.

a contract is required upon selection, regardless of dollar amount written contract Page 19

Requirements and Procedures

 Contract amendments exceeding 50 percent of the value of the original contract ◦ singly or cumulatively  must be filed with the port commission   must be made available for public inspection prior to the proposed starting date of services under the amendment(s) Page 20

Amendments

  Substantial changes in the scope of work specified in the contract ◦ or additions to the scope of work specified in the formal solicitation document Must be submitted to the commission for a determination as to whether the change warrants the work to be awarded as a new contract. ◦ even if the original contract did not require commission approval.

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Scope of Service Changes

  Sole source personal services contracts ◦ must be filed with the commission ◦ must be made available for public inspection prior to the proposed starting date of the contract. Documented justification for sole source contracts must be provided to the commission when the contract is filed. Page 20

Sole Source Contracts

  Sole source contracts of $50,000 or more ◦ Documented evidence that the port attempted to identify potential consultants.

Commission must determine that the costs, fees, or rates negotiated in filed sole source contracts of $50,000 or more are reasonable. RCW 53.19.040

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Sole Source Contracts

Personal Services Contracting Statutory Procedure Matrix (Chapter 53.19 RCW) Process Required File Contract or Contract or Amendment Amount Above $200K Evidence of Solicitation Required Formal Competitive Solicitation Required Required Amendment w/Commission & Make Available for Public Inspection Commission Approval Required Recommended $50K to $200K Below $50K Substantial Changes to Scope of Work Required Required MBD MBD Required Amendment(s) Exceed 50% of Original Cost Before Start of Work Under the Amendment MBD = May be Delegated Recommended If Contract Over $200,000 Page 4

Statutory Procedure Matrix

 Regardless of estimated contract amount, the commission may exempt specific contracts or classes or groups of contracts from the competitive solicitation process, when it has been determined such process would not be appropriate or cost effective.

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Exemptions

  Emergency personal services contracts ◦ must be filed with the commission ◦ ◦ ◦ must be made available for public inspection within seven working days following  commencement of work, or   execution of the contract whichever occurs first. RCW 53.19.030 Documented justification for emergency contracts must be provided to the commission when the contract is filed. (Note that this seven-day requirement is more stringent than that of RCW 39.04.280 addressing public works, which requires adoption of written findings of the existence of the emergency no later than 14 days after contract award.) Page 20

Emergency Contracts

   Chapter 42.23 RCW contains a Code of Ethics for municipal officers (including port officials) Municipal officer includes: ◦ all elected and appointed officers of a municipality ◦ ◦ all deputies and assistants of such an officer all persons exercising or undertaking to exercise any of the powers or functions of a municipal officer.” This code prohibits a municipal officer from having a beneficial (financial) interest in a contract made under the municipal officer’s supervision or for the benefit of his or her office. Page 10-12

Conflict of Interest

     interest law are void.

Remote interests are not prohibited (RCW 42.23.040) ◦ an official with a remote interest must not participate in selecting the contractor An exemption applicable to port districts is: ◦ “The letting of any other contract in which the total amount received under the contract or contracts by the municipal officer or the municipal officer's business does not exceed one ◦ However, a port officer should not participate in any decision to exemption.

See RCW 42.23.030 for other procedural requirements For more information on statutory conflicts of interest, see the MRSC Web page entitled Conflicts of Interest Page 10-12

Conflict of Interest

 The Code also identifies for municipal officers certain “prohibited acts”: ◦ Using his or her position to obtain special privileges; ◦ ◦ ◦ Accepting any compensation, gratuity, or reward from a source other then the employing municipality in connection with the officer’s duties; Engaging in a business or professional activity that the officer might reasonably expect would induce him or her to disclose confidential information gained by virtue of his or her official position; and Disclosing confidential information or using such information for personal gain. RCW 42.23.070

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Conflict of Interest

Pick all that apply

Port commissions are required to: 1.

Approve all personal service contracts exceeding $50,000 2.

3.

4.

Establish policies for personal service contracts Approve all contract amendments Approve all sole source contracts Page 4-7

Midway checkup

1.

Answer: only no. 2 is true

Port commissions are required to: Approve all personal service contracts exceeding $50,000 – there is no dollar

threshold

2.

Establish policies for personal service contracts 3.

4.

Approve all contract amendments – amendments

exceeding 50% must be filed with the commission

Approve all sole source contracts – if over

$50,000 commission determines if fees are reasonable

Midway checkup

for

Pick all that apply

Proposed fees cannot be a selection criteria 1.

Appraisers 2.

3.

4.

5.

6.

Attorneys Engineers Environmental scientists Landscape architects Graphic designers

Midway checkup

Answer

Proposed fees cannot be a selection criteria for 3. Engineers and 5. Landscape architects. These architect/engineering services are selected based on qualifications, with fees then negotiated with the most qualified firm. See Chapter 39.80 RCW.

Midway checkup

      ◦ ◦ ◦ ◦ Sample Document Sources Pre-Contract Procedures ◦ Scope of Services ◦ Cost Estimates Competitive Solicitation and Contracting Procedures ◦ RFQ/RFP Solicitation Process Evaluation Criteria/Scoring Interviews Finalize Contract Contract Approval Contract Administration ◦ Contract Amendments ◦ Scope Changes Monitoring and Financial Reporting Federal Funding Requirements

Personal Service Contracting Nuts, Bolts and Curveballs

 PSC Manual Appendices ◦ http://www.mrsc.org/Subjects/PubWorks/portspsc. aspx ◦ OR http://washingtonports.org/downloads/psmhome.asp

Sample Document Sources

  MRSC Purchasing, Bidding, and Contract Management Sourcebook ◦ http://mrsc.org/subjects/pubworks/sourcebook/source booktoc.aspx

Professional and Personal Services Contracting ◦ J1 Tempe AZ Construction Services Templates ◦ J2 UW - RFQ Advertisement Template ◦ ◦ ◦ ◦ J3 Spokane On-Call Surveying Services J4 Port of Olympia Professional & Personal Services Selection Suite J5 Port of Everett Personal Services Contract Procedures J6 Port of Everett Consultant Contract Tracking Templates

Sample Document Sources

  Scope of Service Samples ◦ Washington State Department of General Administration or Department of Information Services Solicitations ◦ Washington State Office of Financial Management listing of personal service contracts   http://www.ofm.wa.gov/contracts/reports/default.asp

listing reports consultant name, contract type and amount ◦  contact the awarding agency to review the actual contract MRSC research tools http://www.mrsc.org/research.aspx

; May use RFI or RFP without pricing to better define requirements before formal RFP Page 23

Pre-Contract Procedures

   ◦ ◦ ◦ Cost Estimates ◦ An accurate, conservative cost estimate is critical:  selection procedures vary according to the contract amount Cost Estimate Tips ◦ Comparable contracts of the port or other entities, adjusted for inflation and regional cost factors; ◦  solicitation thresholds are based on the actual contract amount Rates paid by other public entities, adjusted for regional cost factors.

Service contracts for the same specialty; State master contracts; Separate estimates prepared based on historical costs.

Conduct a formal solicitation process if you are unsure of estimated costs or if they are Page 24

Pre-Contract Procedures

   RFQ – request for qualifications only RFI - request for information only RFP Solicitation Process may include request for qualifications and will definitely include:   request for detailed scope of services request for estimated cost of services (optional)   proposed schedule, including tasks and milestones evaluation criteria to be followed in selection     proposal elements (information needed to be submitted) deadline for acceptance of proposal port’s standard terms and conditions time and place for submission of proposals Page 26-27

Competitive Solicitation and Contracting Procedures

 Other common RFP elements include : ◦ Background on the port with Website links ◦ Reference documents ◦ ◦ ◦ ◦ ◦ ◦  – large files may be posted to a website Interviews or no interviews Pre-proposal conference(s) Page limits, if any Public disclosure statement/guidance Non-collusion certification, etc Honorarium or no honorarium Page 26-28

Competitive Solicitation and Contracting Procedures

◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ 

Criteria can include, but are not limited to:

fees or costs, ability, capacity, experience, (firm AND key personnel) reputation, responsiveness to solicitation requirements time limitations, responsiveness to solicitation requirements, quality of previous performance, and compliance with statutes and rules relating to contracts or services Page 29

Evaluation Criteria/Scoring

 Scoring: ◦ Evaluation form is needed, with sections for ◦ ◦ ◦    Experience/qualifications Proposal Interviews Ask for references to help verify evaluation Ranking vs. weighted evaluation   Ranking gives equal credence to all criteria Weighting allows more emphasis on one or more criteria Several examples of weighted criteria are found on pages 31-33 of the PSC Manual (test before using)

Evaluation Criteria/Scoring

 Evaluation/Interview Committee: ◦ May be as small (2-3 people) ◦ ◦ May be large (6-9 people), if the contract is large, complex, and/or politicized More than 10 becomes very unwieldy    committee members can attend all interviews.

Set aside a room with adequate space and presentation amenities.

Consultants should be free to visit the room beforehand and ascertain availability of

Interviews

   Unless the project is unusually large or complex, adequate A typical interview schedule is: ◦ General introduction by consultant (five minutes). ◦ ◦ ◦ (25 minutes) Often, the city might provide specific questions that all the finalists are to respond to (15 minutes) Questions by selection committee (15 minutes) The schedule should allow for a 15-20 minute break their thoughts and evaluations while fresh

Interviews

   sessions, committee members should convene arriving at a final recommendation The firm (or firms) with the highest ranking or highest total (weighted) score should be contract Retain evaluation sheets, notes, or a summary support the ranking procedure and selection

Evaluation/Interviews

 Negotiate with one or more finalists to: ◦ finalize the scope of services ◦ ◦ ◦ ◦ ◦ finalize a mutually agreeable and workable schedule, with tasks and milestones finalize a list of quantifiable deliveries establish the final contract price finalize the method of compensation:     time and material; fixed price; cost plus fixed fee; fee per transaction;  fee plus expenses.

finalize all other contract terms and conditions

Finalize Contract

  Commission Approval or Staff?

◦ statutes do not require port commission approval of personal service contracts ◦ ◦ port commissions should adopt policies delegating approval to staff, if so desired (see Table A) policy should identify $$ levels of approval authority Signatures ◦ executive director or designee ◦ ◦ contracts or procurement manager policy should identify signature authority

Contract Approval

 Every personal service contract must be in writing, including at a minimum: ◦ description of parties ◦ ◦ ◦ ◦ ◦ scope of services, milestones, deliverables, etc.

maximum payment and payment terms contract time signatures of all parties, as required the port’s standard terms and conditions. Page 39

Contract Approval

 Monitor and Document Contract Performance ◦ assign single contract manager as point of contact ◦ ◦ ◦ ◦ reference contract tasks, milestones and overall schedule in (monthly) progress reports review progress payment requests for compliance with agreed on method of compensation payment should always “track” with progress: never make payments beyond work accomplished separate contract manager and invoice payment functions Page 42-46

Contract Administration

 Scope Changes and Amendments ◦ statutes require port commission approval of substantial changes to the scope of work ◦   even if the original contract did not need commission approval make scope changes available for public inspection if amendments exceed 50% of original contract cost   file amendment with commission before start of any work under the amendment make amendment available for public inspection

Contract Administration

    Use contract file checklist (p. 9) Provide invoicing guidance ◦ ◦ ◦ ◦ ◦ Retain contract records for at least six years Contract database on a public website – all ports with more than $10 million in gross revenue, to include ◦ Consultant name Contract purpose Performance dates Cost or funding source Contract modifications Solicitation process or exemption Page 49

Monitoring and Financial Reporting

       Formal open competition (don’t use roster) Specify weighted selection criteria in RFP Adopt administrative protest procedure Strict compliance with proposal submittal deadlines Broader definition of Architect/Engineering (A/E) services Proposals not disclosed unless incorporated into the contract Check your specific grant terms!

Federal Funding Requirements

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Go to http://washingtonports.org/downloads/psmho me.asp

for  Table A – Port Commission Checklist ◦ required and recommended actions by port commissions   Table B – Solicitation Guidelines ◦ suggested procedures for personal services procurement for ports Certification of Course Completion

In closing

Certification of Completion Personal Service Contracting for Washington Ports The undersigned acknowledges that Chapter 53.19 RCW establishes a policy of open competition for all personal service contracts entered into by ports, and requires that port employees responsible for executing or managing personal service contracts complete, to the satisfaction of the port commission, a training course developed by the Washington Public Ports Association.

The undersigned certifies that he/she has reviewed the Personal Services Contracting Manual for Washington Ports and has completed the accompanying seminar, “Personal Service Contracting for Washington State Ports”.

The undersigned declares under penalty of perjury of the laws of the state of Washington that the above statements are true.

Dated this Signature day of Printed Name , 20 .