Frequently Asked Questions

From www.idahocities.org   

1. Who needs a Public Works Contractor License?

Any contractor or subcontractor who wishes to construct, repair or reconstruct any project that involves public funding of contracts/purchase orders with the State of Idaho or any other political subdivision of the state authorized to let or award contracts for public work if the estimated cost of the entire project is $10,000 or more.

2. What is piggybacking and how does it relate to purchasing?

Piggybacking saves the city from incurring the time and expense of the competitive bidding process by relying on contracts for goods or services competitively bid by the federal government, State of Idaho, or another Idaho unit of local government (Idaho Code 67-2803(1)). This includes purchases from federal General Services Administration schedules and federal Multiple Award Schedules.

3. What are personal services and are we required to go through competitive bidding when awarding a contract for such services?

Idaho Code 59-514 defines personal services as “performance for remuneration (i.e. compensation) by an individual on a specified contractual basis of specialized professional or consultive expertise germane to administration, maintenance or conduct of governmental activities which require intellectual or sophisticated and varied services, dependent upon facilities, invention, imagination or a specific talent which the state or the taxing entity itself cannot provide or accomplish.”

Common examples of personal services include planning consultants, digital mapping services, software maintenance, etc. These services are exempt from competitive bidding requirements (Idaho Code 67-2803(4)).

Idaho Code 59-514 requires cities to publish legal notice in the official city newspaper within 15 days of entering into a personal service contract in excess of $10,000 per year. The notice must include: the parties, the amount of compensation and a brief description of the work to be performed.

4. Are we required to go through competitive bidding for professional services?

No. Contracts for professional services such as legal, accounting, auditing, and appraisal services and real estate agents are not required to be competitively bid and cities may select the professional that best meets the city’s needs (Idaho Code 67-2803(4)). The only exception is for design professionals, such as engineers, land surveyors and landscape architects, who must be selected according to a quality-based selection process (Idaho Code 67-2320).

5. What are the competitive bidding requirements for purchasing goods or services?

Purchases under $25,000: The city may purchase from any vendor selected by the city council, as the council determines to be in the best interests of the city (Idaho Code 67-2803(2)). The city may prescribe additional procedures in a procurement policy.

Purchases between $25,000 and $50,000: The city must make a written solicitation for bids (by fax, email, mail or hand delivery) to at least three vendors selected by the city, describing the goods or services to be purchased. The request must describe the method for vendors to submit their written bids (electronically or by physical delivery) and the date and time by which bids must be received by the clerk or other authorized official. The request must provide the vendors at least three business days to respond, except in an emergency (Idaho Code 67-2806).

When the bids are received, they are compiled and submitted to the city council (or an official authorized by the council) for approval of the lowest responsive bid or all bids are rejected and the process starts over again. If two or more vendors tie for the lowest bid, the council or its authorized official may select either vendor at its discretion.

Purchases in Excess of $50,000: The purchase must be made following a competitive sealed bid process from the qualified vendor submitting the lowest bid in compliance with bidding procedures and meeting the city’s specifications (Idaho Code 67-2806). The city council may also preauthorize the purchase of equipment at public auction.

The process to obtain bids begins when the city publishes two legal notices soliciting bids in the official city newspaper. The first notice must be published at least two weeks before bid opening; the second notice must be published at least a week prior to bid opening. The notice must succinctly describe the goods or services to be procured and must state that specifications, bid forms, instructions, contract documents and other information are available upon request to any interested bidder.

The city may require bid security of up to five percent of the amount of the bid. If security is required, a bid may not be considered unless security is provided in the form required by the city, including:

• Cash,
• Cashier’s check payable to the city,
• Certified check payable to the city, or
• Bidder’s bond executed by a qualified surety company payable to the city.

Any bid received by the city may not be withdrawn after the time set for opening of bids. Sealed bids must be opened in public at the date, time and place specified in the published notices and thereafter be compiled and submitted to the city council. The city council may award the contract to the vendor submitting the lowest responsive bid or the council may reject all bids and go through the process again. If two or more bids are the same and are the low bids, the city council may accept either in its discretion.

6. What are the competitive bidding requirements for procurement of public works construction?

Construction Projects under $25,000: The city can select any licensed public works contractor believed to provide the best value. For public works construction valued at less than $10,000, contractors without a public works construction license may be used (Idaho Code 67-2803(2)).

Construction Projects from $25,000 to $100,000: The city must make a written solicitation for bids (by fax, email, mail or hand delivery) to at least three licensed public works contractors selected by the city (Idaho Code 67-2805).

The solicitation must describe the project in sufficient detail to allow an experienced contractor to understand what the city seeks to build; specify the method for contractors to submit their bids (electronically or by physical delivery); and provide the date, time and place by which bids must be received by the clerk or other authorized official of the city. The city must allow at least three business days for prospective bidders to respond (except in an emergency).

The written bids are compiled and submitted to the city council or an official authorized by the council. The city must accept the low bid from a qualified, licensed public works contractor or reject all bids and go through the process again. If two or more contractors submit the same low bid, the city council or its authorized official may select whichever contractor it desires.

Construction Projects over $100,000: There are two options: Category A and Category B.

            Category A: Under this category the city must accept bids from any licensed public works contractor,             and the city may only consider the following:

1. The amount of the bid.
2. The bidder’s compliance with administrative requirements.
3. Whether the bidder holds the requisite public works contractor’s license.

The city must publish two legal notices soliciting bids in the official newspaper: the first at least two weeks before bid opening and the second at least a week before bid opening. The notice must succinctly describe the project to be constructed and inform prospective bidders that specifications, bid forms, instructions, contract documents and other materials are available upon request for a reasonable copying fee. The notice must also state the date, time and place by which sealed bids must be received by the city clerk or other authorized official.

The city may require bid security of up to five percent of the amount of the bid. If security is required, a bid may not be considered unless security is provided in the form required by the city. The city may require security to be provided by one of the following methods:

• Cash.
• Cashier’s check payable to the city,
• Certified check payable to the city, or
• Bidder’s bond executed by a qualified surety company payable to the city.

 All submitted bids must be sealed and the project name must be identified on the outside of the  envelope. Any bid received by the city may not be withdrawn after the date and time of bid opening. The sealed bids must be opened in public at the date, time and place specified in the published notices  and thereafter be compiled and submitted to the council. The council must award the contract to the qualified low bidder or reject all bids and re-bid the project. If two bids are the same and the low bid, the council may choose the bidder it prefers. If no bids are received, the council may procure without further competitive bidding procedures.

Category B: The process under Category B consists of two stages: developing a list of prequalified             contractors and the submission of sealed bids from prequalified contractors.

The prequalification stage begins with publication of legal notice soliciting Statements of Qualifications from contractors. The first publication must be at least two weeks before the deadline and the second  publication must be at least one week before the deadline. The city’s prequalification standards may include:

• Demonstrated technical competence;
• Experience constructing similar facilities;
• The contractor’s prior experiences with the city;
• The contractor’s available non-financial resources, equipment and personnel as they relate to the particular project; and
• The contractor’s overall performance history.

The notice must include the standards for evaluating the qualifications of contractors and the deadline for contractors to submit Statements of Qualifications.

After reviewing the Statements of Qualifications, the city may select the licensed contractors meeting its        criteria. The city must provide written explanation to any licensed contractor that fails to meet the             prequalification standards.

The bidding stage commences with notice soliciting bids and indicating the date, time and place set for  public opening of bids. If the selection process involves prime contractors, the notice must be provided to all prequalified prime contractors at least 14 days before bid opening. If the selection process involves specialty or subordinate contractors, the notice must be published twice as a legal notice in the official  city newspaper, with the first publication at least two weeks before bid opening and the second publication at least one week before bid opening. The notice must succinctly describe the project to be constructed and indicate that copies of specifications, bid forms, instructions, contract documents and general and special instructions are available upon request and payment of a reasonable plan copy fee.

Sealed bids must be presented to the clerk or other authorized official with a concise statement on the outside indicating the particular project.

The city may require bid security of up to five percent of the amount of the bid (see Category A above).

Any bid received by the city may not be withdrawn after the date and time of bid opening. The sealed bids are opened in public at the date, time and place specified in the notice and are then compiled and submitted to the council for award. The council awards to the lowest qualified bidder or may reject allbids and re-bid the project. If identical low bids are received, the city council may choose the bidder it prefers. If no bids are received, the council may move forward with the project without further competitive bidding.

7. How are engineers and land surveyors selected?

For contracts in which the fee is anticipated to be greater than $25,000, the city must establish selection criteria (not based on price) and solicit statements of qualifications from interested professional engineers or professional land surveyors through published legal notice (Idaho Code 67-2320). The notice must be published in the official city newspaper twice, the first time at least two weeks before the deadline for submitting statements of qualifications and the second time at least one week before the deadline.

The city then reviews the proposals and ranks them in order of qualifications. The city and the highest-ranked firm then finalize the scope of services and negotiate a suitable fee. If they cannot agree, the city can terminate negotiations and begin discussions with the next highest ranked firm.

For contracts with an anticipated fee less than $25,000 the city does not have to advertise the solicitation, but must still select based on demonstrated competence and qualifications.

8. Are cities required to use licensed public works contractors for construction projects?

Yes. Licensed public works contractors must be used for public works construction jobs over $10,000 (Idaho Code 54-1903).

9. What are payment and performance bonds and why are they required for public works construction projects?

A payment bond protects the suppliers and subcontractors, as well as the city, in the event that the general contractor fails to pay those who provide labor, materials or equipment for the project. Payment bonds exist because suppliers and subcontractors can’t place a lien on the city’s property if they aren’t paid by the contractor. If the city does not obtain a payment bond, then the city is on the hook to pay those expenses. The contractor is required to obtain a payment bond payable to the city for at least 85 percent of the contract amount (Idaho Code 54-1926).

A performance bond protects the city in the event the contractor fails to faithfully perform the contract in accordance with the plans and specifications. The contractor is required to obtain a performance bond payable to the city for at least 85 percent of the contract amount (Idaho Code 54-1926).