WSR 10-07-155

INTERPRETIVE AND POLICY STATEMENT

DEPARTMENT OF

GENERAL ADMINISTRATION

[ Filed March 24, 2010, 10:12 a.m. ]

Purpose: Pursuant to the Administrative Procedure Act, RCW 34.05.230, the department of general administration (GA) submits the following: Competitive contracting interim guidance and interpretive and policy statement.

Subject: Guidance for state agency staff during the interim from the September 15, 2009, Court of Appeals Division II court decision which invalidated three sections of GA's 2004 competitive contracting rules (chapter 236-51 WAC), and the adoption of conforming rules.

Background: In 2004, GA adopted chapter 236-51 WAC on competitive contracting under the authority granted by RCW 41.06.142 (1)(d) "to ensure that bids are submitted and evaluated in a fair and objective manner ..."

In 2007, the Washington Federation of State Employees filed suit challenging three sections of chapter 236-51 WAC:

1. WAC 236-51-006: "If state employees will not be displaced, agencies shall comply with RCW 41.06.142 (1)(a), (d) and (e), and applicable laws and rules governing the purchase of such services."

2. WAC 236-51-010(11): "'Displaced employee' means a classified employee whose position or work would be eliminated, resulting in the employee being laid off or assigned to a different job classification, as a result of an award via the competitive contracting process."

3. WAC 236-51-225: "An employee business unit (EBU) awarded a contract by an agency shall not perform or bid on solicitations for services not contained in its contract unless their agency approves in writing."

On September 15, 2009, the Court of Appeals Division II ruled that GA exceeded its rule-making authority in interpreting the meaning of the word "displaced" in the phrase "employees in the classified service whose positions or work would be displaced by the contract" (RCW 41.06.142 (1)(b)). The court did not rule on the meaning of the statutory language, but said that interpreting this term is not within the scope of crafting a bid process. The court also used this reasoning to invalidate WAC 236-51-006.

The court affirmed GA's authority to draft WAC 236-51-225, but deemed it inconsistent with the law. The court held that an EBU may bid on a new contract only if their current work would be displaced by the new contract.

Interim Guidance: WAC 236-51-006 and 236-51-010(11) are not in force or effect. Agencies must apply the text of RCW 41.06.142 (1)(b) to their specific situation to determine if they have "employees in the classified service whose positions or work would be displaced by the contract." If so, agencies must follow the competitive contracting requirements.

WAC 236-51-225 is not in force or effect. The court held that an EBU may bid on a new contract only if their current work would be displaced by the new contract.

This is interim guidance because GA intends to commence an expedited rule-making process to conform the rules to the Court of Appeals decision. This guidance applies until the rule-making process is completed.

Contact: To receive information on GA's expedited rule-making process, please contact Jack Zeigler, Rules Coordinator, Department of General Administration, P.O. Box 41000, Olympia, WA 98504-1000, phone (360) 902-0970, e-mail jzeigle@ga.wa.gov, web site www.ga.wa.gov.

Washington State Code Reviser's Office