Washington continues to expand its protection of subcontractors from the dubious business practice of bid shopping, at least on public works projects.
Washington law requires that general contractors list subcontractors that are to perform certain parts of a public works project expected to cost over $1 million (RCW 39.30.060). If more than one subcontractor is listed, or the general contractor fails to list a subcontractor, the bid is deemed void. This requirement is meant to prevent bid shopping and create a more equitable bidding process. While bid shopping is often criticized as unethical, requiring the listing of subcontractors on the bid provides more transparency in the bidding process.
Originally, the law only applied to subcontractors who were performing work on HVAC (heating, ventilation, and air conditioning), plumbing and electrical components of the project. The names of these subcontractors must be listed within one hour of submitting the bid. A new amendment to the bill, effective June 11, 2020, requires that subcontractors installing structural steel and rebar be named, within 48 hours of submitting the bid. The same stipulations apply to this amendment—if there is more than one subcontractor listed or the general contractor fails to list the subcontractors, the bid is deemed void.
The general contractor is not allowed to substitute the subcontractor in order to bid shop before or after they are awarded the contract. If this does happen, the original subcontractor can recover monetary damages from the general contractor and the substituted subcontractor, but, the original subcontractor has the burden to prove that bid shopping occurred. There are exceptions to these regulations: the general contractor may substitute a subcontractor if there are issues with licensing, performance of work or other court-ordered restrictions.
It is important that both general contractors and subcontractors are aware of this change and proceed with their bids accordingly. For general contractors, this means being sure that all relevant subcontractors are listed. For subcontractors, this means being aware of this new amendment aimed at protecting their rights within the bidding process.
Contributions made by Jim Yand and Tina Scott