Advisories & Insights

With the passage of HB 3422 on July 1, 2003, significant changes have been made to the procedures public contracting agencies and contractors must follow relating to the awarding of contracts for public improvement projects in Oregon - changes that went into effect on August 1, 2003.

While most bills passed by the Oregon Legislature in the last session will not effective until January 1, 2004, successful lobbying efforts by certain building industry groups put HB 3422 on the fast-track likely catching many public contracting agencies and contractors off-guard.

While a complete description of all the changes can be reviewed by visiting the State of Oregon website (www.leg.state.or.us keyword: hb3422), those having the most significant impact on the procedures for public contracting (particularly, subcontractor disclosure requirements) are as follows:

For all non-highway projects, public contracting agencies are now required to set the bid closing between 2:00 and 5:00 pm on Tuesday, Wednesday or Thursday and no longer enjoy the leeway they used to have in setting the day and time for bid closing;

Public contracting agencies now must open all bids immediately after bid closing and not after the subcontractor disclosure forms are submitted; and

On all public improvement contracts greater than $100,000, contractors now have only 2 hours (instead of the previously required 4 hours) after bid closing to submit the information required on the newly established statutory subcontractor disclosure forms, i.e., the name, bid amount and category of work for all first-tier subcontractors providing labor or providing labor and materials to the project.

Note that a first-tier subcontractor need only be listed if its bid is (a) equal to or greater than five percent (5%) of the total bid and at least $15,000, or (b) $350,000 regardless of the percentage of the total bid. It should be further noted that even when there are no first-tier subcontractor bids meeting these benchmarks, the contractor must still submit the disclosure form with ìNONEî indicated otherwise its bid will be rejected as non-responsive.

Again, the changes to the procedures for public contacting just described are now in effect for all public improvement contracts sent out for bid on or after August 1, 2003. Accordingly, all public contracting agencies and contractors must immediately take steps to ensure that the new timelines for bid closing, bid opening and subcontractor disclosure are strictly adhered to and that the new statutory disclosure form is provided by the contracting agency and fully completed by the contractor--failure to do so may, and likely will, result in a costly and time-consuming bid protest by an aggrieved bidder.

Upon request, Bullivant Houser Bailey LLP can provide a copy of the official subcontractor disclosure form required by HB 3422.