HB 1966, sponsored by Rep. Janice Zahn (D–Bellevue), aims to provide flexibility for public entities to self-perform work in certain circumstances and standardize some contracting practices across local governments. The proposal is a technical bill that makes several changes to public works contracting law, with impacts to cities and towns.

HB 1966:

• Eliminates the concept of “prudent utility management,” which allows cities to use in-house personnel (not having to go out to bid) to perform work that is accepted industry practice and when the materials used are under $300,000 in value.
  • Replaces the above with the authority to address “exigent public works needs” with in-house personnel up to a project cost of $300,000. Project costs must include all labor, materials, supplies, and equipment.
  • Defines “exigent public works needs” as unforeseen circumstances resulting in the compromise of proper performance of essential government functions, a need to prevent or alleviate serious impacts, financial or otherwise, and when the use of a competitive procurement process would prevent the urgent action required by the situation.
  • Limits the amount of exigent public works performed by in-house personnel to 10% of the public works construction budget over the city's or town's annual budget period. If it exceeds the 10%, the amount in excess of the permitted threshold is reduced from the permitted amount in the municipality’s next budget period.
  • Requires cities to prepare a report, subject to an audit, indicating the total public works construction budget for that year, the total construction costs of public works performed in-house that year, and the amount of public works that is performed in-house above or below 10% of the total construction budget.
• Eliminates the alternate bidder responsibility provisions under RCW 35.23.352 and 35.22.620. The eliminated language conflicted with a separate but related RCW, 39.04.350, and caused confusion for contractors bidding on public works projects. Cities are instead directed to refer to RCW 39.04.350 for guidance on bidder responsibility criteria.

The bill is the result of work done by a review committee under the Capital Projects Advisory Review Board over the 2024 interim. The committee was tasked with reviewing HB 1621, passed in 2023, and generating recommended action for the Legislature in response to several challenges presented by the legislation. Find AWC coverage of that bill here and here.

First- and second-class city representatives participated on the committee; their contributions greatly improved the outcome of the review process for cities and towns and AWC staff sincerely thank them for their participation. For more context, read the committee’s recommendations and the CPARB Chair’s letter to the Legislature on the matter.

AWC supports the bill.

Dates to remember

HB 1966 is scheduled for public hearing in the House Local Government Committee on Tuesday, February 18, at 10:30 am. It is scheduled for executive session in the same committee on Wednesday, February 19, at 8 am.