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Personal Service Contracting for Washington State Ports

AgendaLegislative Overview Personal Service Contracting Requirements and ProceduresPersonal Service Contracting Nuts, Bolts and Curveballs

Chapter 53.19 RCW & RCW 53.08.440 PERSONAL SERVICE CONTRACTSSecond 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 PortsPorts must develop policies for personal services contracting based on PSC Manual

Chapter 53.19 RCW & RCW 53.08.440 PERSONAL SERVICE CONTRACTSPolicies must apply to contracts entered into after January 1, 2010PSC Manual available fromLink from WPPA website to http://www.mrsc.org/Subjects/PubWorks/portspsc.aspOr purchase a published copy from MRSC:http://mrsc.org/publications/mrscpubs.aspx#orderpubs

What Do the Statutes Say about Personal Service Contracting?Policy of open competitionDifferent competitive requirements for personal and professional service contracts

Contract TypesPersonal ServicesProfessional or technical expertise provided by a consultant to accomplish a specific study, project, task, or other work statementWhich 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)

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Contract TypesNot reasonably required in connection with a public works projectServices that would otherwise be considered as personal services, but arereasonably required in connection with a public works projectdo 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.Page 13-15

Contract TypesPurchased 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 repairlaundry and/or uniform supply services operation of a physical plantsecuritycomputer hardware and software maintenance; data entry; key punch servicescomputer time-sharing, contract programming, and analysisPage 13-15

Contract TypesProfessional 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

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Does Not ApplyChapter 53.19 RCW does not apply to:Tariff ContractsContracts awarded to companies that furnish a service where the tariff is established by the Washington Utilities and Transportation Commission (WUTC) or other public entityIntergovernmental Agreements Intergovernmental agreements awarded to any governmental entity, whether federal, state, or local and any department, division, or subdivision thereofStandard Fee ContractsContracts awarded for services to be performed for a standard fee, when the standard fee is established by the contracting agency or any other governmental entity and a like contract is available to all qualified applicants

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Does Not ApplyChapter 53.19 RCW does not apply to:Collaborative Research ContractsContracts for services that are necessary to the conduct of collaborative research if prior approval is granted by the funding sourceContracts for professional services which are entered into under Chapter 39.80 RCWExpert Witnesses or legal servicesContracts for the employment of expert witnesses for the purposes of litigation or legal services to supplement the expertise of port staff

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ExamplesNon-Exclusive List of Personal Service ExamplesAccounting servicesAerial photography (if not related to a public works project)Analysis and assessment of processes, programs, fiscal impact, compliance, systems, etc.Appraisal servicesEconomic analysis and consultationEnvironmental planning, technology, studies (except when part of a public works project)Executive recruitmentFinancial advisor servicesFeasibility study services (if not related to public works project)Foreign trade representative servicesGrant writingGraphic design servicesLobbying servicesLabor negotiations and labor relations servicesManagement consulting marketing services to include identifying market opportunities, conduct marketing programs, planning, promotion, market research surveys, etc.Medical and psychological servicesOrganization developmentPublic relations servicesPromotional servicesStrategic planningTrainingPage 15

Tools in Chapter 2 of PSC ManualQuick Tips for Getting StartedStatutory Procedure MatrixFlow Chart Personal Services Contract Size ChartTypical Formal Competitive Selection Process SchedulePersonal Service Contract File ChecklistDefinitionsRequirements and Procedures

Overview

AmendmentsScope of Service ChangesSole Source ContractsStatutory Procedure MatrixExemptionsEmergency ContractsConflict of Interest

Overview

DefinitionsConsultant 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 consultants 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 QualificationsRFP Request for ProposalsPage 13-15

DefinitionsEmergency 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 lossor 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 districts own policies and procedures may be more restrictive than statutory requirements, but not less restrictive.)Page 13-15

DefinitionsCompetitive Solicitation for Personal Services RCW 53.19.010(2).Documented formal process equal and open opportunity to qualified parties selection based on criteriacriteria other than price may be the primary basis for consideration. The criteria may include such factors asfees or costs, ability, capacity, experience, reputation, responsiveness totime limitations, responsiveness to solicitation requirements, quality of previous performance, andcompliance with statutes and rules relating to contracts or services. Page 13-15

DefinitionsApplication (Proposal/Submittal) Completed statement of qualifications or proposalrequest to be considered for the award of one or more contracts for personal services, submitted in response to either a request for qualifications/proposalsor in response to a notice or advertisement for a consultant services rosterAlso called a proposal or submittalPage 13-15

DefinitionsSole 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 onuniqueness of the servicesole availability at the location requiredwarranty or defect correction service obligations of the consultantPage 13-15

Requirements and Procedures 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)

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Requirements and Procedures Formal competition impliespublication of RFQ/RFPevaluation criteriaprobable evaluation committeeprobable interviewsformal award by commission or port executivewritten contractPage 19

Requirements and Procedures Informal Competitionpublication not requiredmust request proposals from and/or conduct interviews with multiple firmsevaluation criteriapossible evaluation committeepossible interviewsaward by commission or Port Executivewritten contractsee page 27 of PSC ManualPage 19

Requirements and Procedures Minimal Competitionport commission and executive set policiesseeking competition is not required by the statutes, but is recommended, and use of a roster is encouragedtelephone 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 amountwritten contract

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Contract amendments exceeding 50 percent of the value of the original contractsingly or cumulativelymust be filed with the port commission must be made available for public inspectionprior to the proposed starting date of services under the amendment(s)AmendmentsPage 20

Scope of Service Changes Substantial changes in the scope of work specified in the contractor additions to the scope of work specified in the formal solicitation documentMust 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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Sole Source ContractsSole source personal services contractsmust 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.

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Sole Source ContractsSole source contracts of $50,000 or moreDocumented 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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Statutory Procedure Matrix

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ExemptionsRegardless 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.Page 20

Emergency Contracts Emergency personal services contractsmust be filed with the commissionmust be made available for public inspectionwithin seven working days followingcommencement of work, or execution of the contractwhichever 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.)

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Conflict of InterestChapter 42.23 RCW contains a Code of Ethics for municipal officers (including port officials)Municipal officer includes:all elected and appointed officers of a municipalityall deputies and assistants of such an officerall 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 officers supervision or for the benefit of his or her office.

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Conflict of InterestContracts made in violation of this statutory conflict of 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 contractorAn 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 thousand five hundred dollars in any calendar month. However, a port officer should not participate in any decision to award a contract to him/herself that is subject to this exemption.See RCW 42.23.030 for other procedural requirementsFor more information on statutory conflicts of interest, see the MRSC Web page entitled Conflicts of Interest

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Conflict of InterestThe 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 officers 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; andDisclosing confidential information or using such information for personal gain. RCW 42.23.070.

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Midway checkupPick all that applyPort commissions are required to:Approve all personal service contracts exceeding $50,000Establish policies for personal service contractsApprove all contract amendmentsApprove all sole source contractsPage 4-7

Midway checkupAnswer: only no. 2 is truePort commissions are required to:Approve all personal service contracts exceeding $50,000 there is no dollar thresholdEstablish policies for personal service contractsApprove all contract amendments amendments exceeding 50% must be filed with the commissionApprove all sole source contracts if over $50,000 commission determines if fees are reasonable

Midway checkupPick all that applyProposed fees cannot be a selection criteria forAppraisersAttorneysEngineersEnvironmental scientistsLandscape architectsGraphic designers

Midway checkupAnswerProposed 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.

Personal Service Contracting Nuts, Bolts and Curveballs

Sample Document SourcesPre-Contract ProceduresScope of ServicesCost EstimatesCompetitive Solicitation and Contracting Procedures RFQ/RFP Solicitation ProcessEvaluation Criteria/ScoringInterviewsFinalize ContractContract ApprovalContract AdministrationContract AmendmentsScope ChangesMonitoring and Financial ReportingFederal Funding Requirements

Sample Document SourcesPSC Manual Appendiceshttp://www.mrsc.org/Subjects/PubWorks/portspsc. aspx OR http://washingtonports.org/downloads/psmhome.asp

Sample Document SourcesMRSC Purchasing, Bidding, and Contract Management Sourcebookhttp://mrsc.org/subjects/pubworks/sourcebook/sourcebooktoc.aspxProfessional and Personal Services ContractingJ1 Tempe AZ Construction Services TemplatesJ2 UW - RFQ Advertisement TemplateJ3 Spokane On-Call Surveying ServicesJ4 Port of Olympia Professional & Personal Services Selection SuiteJ5 Port of Everett Personal Services Contract ProceduresJ6 Port of Everett Consultant Contract Tracking Templates

Pre-Contract ProceduresScope of Service SamplesWashington State Department of General Administration or Department of Information Services SolicitationsWashington State Office of Financial Management listing of personal service contractshttp://www.ofm.wa.gov/contracts/reports/default.asp listing reports consultant name, contract type and amountcontact 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

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Pre-Contract ProceduresCost EstimatesAn accurate, conservative cost estimate is critical:selection procedures vary according to the contract amountsolicitation thresholds are based on the actual contract amountCost Estimate TipsComparable contracts of the port or other entities, adjusted for inflation and regional cost factors;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 borderline.Page 24

Competitive Solicitation and Contracting Procedures RFQ request for qualifications onlyRFI - request for information onlyRFP Solicitation Process - may include request for qualifications and will definitely include:request for detailed scope of servicesrequest for estimated cost of services (optional)proposed schedule, including tasks and milestonesevaluation criteria to be followed in selectionproposal elements (information needed to be submitted)deadline for acceptance of proposalports standard terms and conditionstime and place for submission of proposalsPage 26-27

Competitive Solicitation and Contracting Procedures Other common RFP elements include :Background on the port with Website linksReference documents large files may be posted to a websiteInterviews or no interviewsPre-proposal conference(s)Page limits, if anyPublic disclosure statement/guidanceNon-collusion certification, etcHonorarium or no honorariumPage 26-28

Evaluation Criteria/ScoringCriteria can include, but are not limited to:fees or costs, ability, capacity, experience, (firm AND key personnel)reputation, responsiveness to solicitation requirementstime limitations, responsiveness to solicitation requirements, quality of previous performance, andcompliance with statutes and rules relating to contracts or servicesPage 29

Evaluation Criteria/ScoringScoring:Evaluation form is needed, with sections forExperience/qualificationsProposalInterviews Ask for references to help verify evaluationRanking vs. weighted evaluationRanking gives equal credence to all criteriaWeighting 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)

InterviewsEvaluation/Interview Committee:May be as small (2-3 people)May be large (6-9 people), if the contract is large, complex, and/or politicizedMore than 10 becomes very unwieldyInterviews should be scheduled such that all 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 electrical outlets, etc., for audiovisual equipment.

InterviewsUnless the project is unusually large or complex, about 60 minutes for each interview should be adequateA typical interview schedule is: General introduction by consultant (five minutes). Project approach by consultant's project manager (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 between interviews to allow the committee to record their thoughts and evaluations while fresh

Evaluation/InterviewsAt the end of all proposal review or interview sessions, committee members should convene to review their notes and criteria points, arriving at a final recommendationThe firm (or firms) with the highest ranking or highest total (weighted) score should be recommended for award and negotiation of a contractRetain evaluation sheets, notes, or a summary document thereof in the project files, to support the ranking procedure and selection

Finalize ContractNegotiate with one or more finalists to:finalize the scope of servicesfinalize a mutually agreeable and workable schedule, with tasks and milestonesfinalize a list of quantifiable deliveriesestablish the final contract pricefinalize 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

Contract ApprovalCommission Approval or Staff?statutes do not require port commission approval of personal service contractsport commissions should adopt policies delegating approval to staff, if so desired (see Table A)policy should identify $$ levels of approval authoritySignaturesexecutive director or designeecontracts or procurement managerpolicy should identify signature authority

Contract ApprovalEvery personal service contract must be in writing, including at a minimum:description of partiesscope of services, milestones, deliverables, etc.maximum payment and payment termscontract timesignatures of all parties, as requiredthe ports standard terms and conditions. Page 39

Contract AdministrationMonitor and Document Contract Performanceassign single contract manager as point of contactreference contract tasks, milestones and overall schedule in (monthly) progress reportsreview progress payment requests for compliance with agreed on method of compensationpayment should always track with progress: never make payments beyond work accomplishedseparate contract manager and invoice payment functions

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Contract AdministrationScope Changes and Amendmentsstatutes require port commission approval of substantial changes to the scope of workeven if the original contract did not need commission approvalmake scope changes available for public inspectionif 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

Monitoring and Financial ReportingUse contract file checklist (p. 9)Provide invoicing guidanceRetain contract records for at least six yearsContract database on a public website all ports with more than $10 million in gross revenue, to includeConsultant nameContract purposePerformance datesCost or funding sourceContract modificationsSolicitation process or exemptionPage 49

Federal Funding RequirementsFormal open competition (dont use roster)Specify weighted selection criteria in RFPAdopt administrative protest procedureStrict compliance with proposal submittal deadlinesBroader definition of Architect/Engineering (A/E) servicesProposals not disclosed unless incorporated into the contractCheck your specific grant terms!

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In closingGo to http://washingtonports.org/downloads/psmhome.asp for Table A Port Commission Checklistrequired and recommended actions by port commissionsTable B Solicitation Guidelinessuggested procedures for personal services procurement for portsCertification of Course Completion

Certification of CompletionPersonal Service Contracting for Washington PortsThe 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 day of , 20.SignaturePrinted Name