Public Contracting Tips and Traps

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by Carrie Connelly

As we’ve previously advised, the 2024 legislative session did not mandate any particular public contracting rule updates. Given this “lull,” we wanted to share a few emerging trends with you, provide some public contracting basic reminders, and let you know of one change to our standard engineer and architect contract terms required by legislation that took effect on January 1, 2025.

  1. First and foremost, an ounce of prevention is worth a pound of cure. Our office can provide your entity with the best legal advice if you call before a project is advertised (and long before contracts are awarded and signed.) It is possible – even likely – that the minor repair or installation project you have planned for early 2025 is actually a public work, requiring a written procurement, particular contract provisions, Bureau of Labor and Industries (BOLI) oversight, and the payment of prevailing wages. Speaking of . . .
  2. BOLI, BOLI, BOLI!
    a. Be sure to prepare and submit to BOLI a list of the public improvements planned for the upcoming budget period. Pursuant to ORS 279C.305, you must submit this list at least 30 days before adopting your budget, and revise the list if your plans change. For further information on this planned project requirement, see Mark Wolf’s article, “The Budget Process in Four Simple Steps.”
    b. Once a public works contract is awarded, you must notify BOLI of the award and pay a fee within 30 days following award. The fee is 0.1% of the contract price, but in no event less than $250 nor more than $7,500. Use BOLI’s form WH-81 found at http://www.oregon.gov/boli/WHD/PWR/docs/wh81.pdf). In most cases, a copy of the Disclosure of First-Tier Subcontractors must also be submitted with this notice.
  3. For engineer or architect contracts entered into or renewed after January 1, 2025, standard defense and indemnification provisions must be modified. The engineering lobby (and insurance industry) are incredibly effective, and managed to slip in a legislative amendment that precludes engineers from having any duty to defend a public body against a claim for their professional negligence, unless and until adjudicated responsible.Do not, however, believe that this legislative change requires your entity to accept liability limits in the amount of the contract or otherwise. While regularly requested by architects and engineers these days, we find that most firms will back down when such requests are denied.
  4. In this charged political climate, remember that personal opinions play no role in public contracting evaluation or award procedures. In other words, an entity cannot refuse to award to the lowest responsible bidder because of a contractor’s objectionable bumper stickers. As long as all applicable laws are met, award is based on responsibility and cost.
  5. You may have heard of the Governor’s executive order (EO 24-31) requiring the use of project labor agreements (PLAs) for state and state-funded construction projects? Well, breathe a sigh of relief – Governor Kotek’s office has clarified that local construction projects are not covered or impacted by EO 24-31, even if state funding pays for the work in whole or in part. Instead, the EO is primarily intended to apply to state-owned facility improvements, such as state highways.
  6. And finally, we are seeing far too many incidents of “vendor impersonator” cybercrimes. Clients receive emailed requests “from” their contractor to send amounts owed electronically via an identified Automated Clearing House (ACH.) However, many such requests are not sent by your legitimate contractor, but by a fraudulent impersonator. In such cases, instead of reaching the intended contractor, payment is sent to the impersonator. These scams have become so sophisticated, they are tricking even the most seasoned skeptics. Impersonators can now hack vendor email systems, so requests are sent on prior email strings between staff and the contractor. Be careful. Electronic transfers should never be instituted without multiple methods of verification, pursuant to duly adopted local policies – and potentially amended contract terms.

Who knows what the 2025 legislature will approve. Stay tuned for our Fall update, when we’ll let you know whether new rules will be required to address any changes. Until then, the above tips and traps to avoid should help to keep you out of trouble.