Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1981 No. 19 -
Attorney General Ken Eikenberry


State agencies which contract for architectural and engineering services pursuant to chapter 61, Laws of 1981 are not thereby exempt from filing such contracts with the Office of Financial Management under the provisions of chapter 39.29 RCW.

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                                                               November 20, 1981 

Honorable Joe Taller
Office of Financial Management
101 House Office Building
Olympia, Washington 98504

Cite as:  AGO 1981 No. 19                                                                                                                

Dear Sir: 

            By recent letter you requested our opinion on the following question:

             Are agencies who acquire architectural and engineering services through Substitute House Bill 176 procedures exempt from filing such contracts with OFM under the provisions of RCW 39.29.040(2)?

             We answer this question in the negative; i.e., such agencies contracts are not exempt from filing.


             As you have noted in your letter, chapter 39.29 RCW relates to personal service contracts entered into by state agencies.  The underlying legislative intent, as expressed in RCW 39.29.003, is as follows:

              [[Orig. Op. Page 2]]

            "It is the intent of this chapter to provide for a comprehensive legislative review of all personal service contracts negotiated within state government,unless specifically exempted under this chapter, and to centralize executive supervision of these expenditures by the office of financial management."  (Emphasis supplied)

             A "personal service contract" is defined in RCW 39.29.006(1) to mean,

             ". . . an agreement, or any amendment or renewal thereto, with an independent contractor for the rendering of personal services to the state."

             The term "personal service," in turn, is defined by subsection (2) of this same section of the law to mean,

             ". . . performing a specific study, project, or task which requires professional or technical expertise."

             The basic substantive requirement of the law is set forth in RCW 39.29.010 as follows:

             "All personal service contracts, including renewals and amendments of existing contracts, entered into by any state officer or activity of the executive and judicial branches of state government, including state agencies, departments, offices, divisions, boards, commissions, and educational, correctional and other types of institutions, shall be filed with the office of financial management and the legislative budget committee at least ten days prior to the date any work commences under such contracts regardless of the source of funds. . . ."

              [[Orig. Op. Page 3]]

            There are, however, three avenues to exemption from this filing requirement.  First, after stating the requirement, RCW 39.29.010, supra, itself then goes on to provide that:

             ". . .  The director of financial management may exempt on a limited basis specific classes of personal service contracts involving activities of the executive and judicial branches after preparation of documented justification and consultation with the legislative budget committee:  PROVIDED, That approval of the exemption is granted prior to commencement of the contract work."1/

             Next, RCW 39.29.030 states that:

             "This chapter shall not apply to the Washington state apple advertising commission, the Washington state fruit commission, the Washington state dairy products commission, or any agricultural commodity commission created under the provisions of chapter 15.66 RCW and exempted from the budget and accounting system by chapter 43.88 RCW except for special provisions concerning budget submissions and audits."

             And finally, RCW 39.29.040 sets forth the following additional, statutory exemptions:

             "This chapter does not apply to:

             "(1) Contracts specifying a fee of less than two thousand five hundred dollars if the total of such contracts from that agency with the contractor within a twelve‑month  [[Orig. Op. Page 4]] period does not exceed two thousand five hundred dollars;

             "(2) Contracts awarded through competitive bids if the bidding follows a formal, documented bid procedure and if the request for bids is advertised through the media normally used by the particular service being sought:  PROVIDED, That for management purposes, the office of financial management may require the filing of certain contracts exempted under this subsection;

             "(3) Contracts where the contracting agency recognizes that an employee‑employer relationship exists;

             "(4) Contracts awarded to companies that furnish a service where the tariff is established by the utilities and transportation commission or other public entity;

             "(5) Intergovernmental agreements awarded to any public corporation, whether federal, state, or local and any department, division, or subdivision thereof; and

             "(6) Contracts awarded for services to be performed for a standard fee, when the standard fee is established by the contracting agency or any other public corporation and a like contract is available to all qualified applicants."

             It is subsection (2) of this last quoted statute which pertains to your question.  As you have pointed out, there is in chapter 43.19 RCW a prescribed procedure for competitive bidding in relation to those purchases, on behalf of state agencies, which are subject to a competitive bidding requirement.  See, RCW 43.19.1908‑-43.19.1913.  And clearly, you are correct in viewing any personal service contracts entered into in accordance with those procedures to be exempt from filing,  [[Orig. Op. Page 5]] under chapter 39.29 RCW, by reason of RCW 39.29.040(2),supra.  As we understand it, however, the specific legal question which you have asked us to review and answer is keyed, instead, to a different legislative enactment.

             What you have identified in your letter as Substitute House Bill 176 was passed by the legislature during its most recent, 1981 regular session as chapter 61, Laws of 1981.  This enactment relates, particularly, to architectural and engineering service contracts entered into by both state and local governmental agencies on or after the effective date of the act, January 1, 1982.2/   In terms of the kinds of contracts to which the act applies, the following definitions, in § 2(5), are specially to be noted:

             "(5) 'Architectural and engineering services' or 'professional services' means professional services rendered by any person, other than as an employee of the agency, contracting to perform activities within the scope of the general definition of professional practice in chapters 18.08, 18.43, or 18.96 RCW."

             Next, we will quote in full, for immediate reference, §§ 3 through 5 of chapter 61,supra, which contain the general requirements of the law.  First, § 3 provides that each "agency,"3/

             ". . . shall publish in advance that agency's requirement for professional services.  The announcement shall state concisely the general scope and nature of the project or work for which the services are required and the address of a representative of the agency who can provide further details.  An agency may comply with this section by:  (1) Publishing an announcement on each occasion when  [[Orig. Op. Page 6]] professional services provided by a consultant are required by the agency; or (2) announcing generally to the public its projected requirements for any category or type of professional services."

             Next, § 4 reads as follows:

             "In the procurement of architectural and engineering services, the agency shall encourage firms engaged in the lawful practice of their profession to submit annually a statement of qualifications and performance data.  The agency shall evaluate current statements of qualifications and performance data on file with the agency, together with those that may be submitted by other firms regarding the proposed project, and shall conduct discussions with one or more firms regarding anticipated concepts and the relative utility of alternative methods of approach for furnishing the required services and then shall select therefrom, based upon criteria established by the agency, the firm deemed to be the most highly qualified to provide the services required for the proposed project.  Such agency procedures and guidelines shall include a plan to insure that minority and women-owned firms are afforded the maximum practicable opportunity to compete for and obtain public contracts for services.  The level of participation by minority and women-owned firms shall be consistent with their general availability within the professional communities involved."

             And thirdly, § 5 provides that:

             "(1) The agencyshall negotiate a contract with the most qualified firm for architectural and engineering services at a price which the agency determines is fair and reasonable to the agency.  In making its determination, the agency shall take into account the estimated value of the services to be rendered as well as the scope, complexity, and professional nature thereof.

              [[Orig. Op. Page 7]]

            "(2) If the agency is unable to negotiate a satisfactory contract with the firm selected at a price the agency determines to be fair and reasonable, negotiations with that firm shall be formally terminated and the agency shall select other firms in accordance with section 4 of this act and continue in accordance with this section until an agreement is reached or the process is terminated."  (Emphasis supplied)


             Does compliance, by a state agency, with the requirements of this 1981 act, in lieu of competitive bidding under RCW 43.19.1908-43.19.1913,supra, result in an exemption from the filing requirements of chapter 39.29 RCW on the basis of RCW 39.29.040(2),supra?

            In our opinion, it does not.  We therefore must answer your question, as set forth at the beginning of this opinion, in the negative.

             Simply stated, chapter 61, Laws of 1981, supra, does not establish a competitive bidding procedure for the letting of architectural and engineering service contracts by governmental agencies.  Rather, it provides for negotiated contracts (as evidenced, particularly, by the above‑underscored language of § 5) after a preliminary determination as to the "most qualified" firm.  While there most certainly is a competitive aspect to the law in terms of how a particular architectural or engineering firm is determined to be "most qualified," the competition is at that preliminary level and not, as under competitive bidding, at the critical level of "offer" and "acceptance" in the context of formation of a particular contract.

             This is not to say that some further legislative action, in the form of an additional exemption provision in RCW 39.29.040, supra‑-relating to architectural and engineering service contracts‑-might not be thought by some in order  [[Orig. Op. Page 8]] as a matter of policy.  But that is for the legislature, rather than either your office or ours, to decide.  What we are saying, at this time, is simply that the existing provisions of RCW 39.29.040(2), as the law now reads, cannot be interpreted to provide such an exemption.

             We trust that the foregoing will be of assistance to you.

 Very truly yours,
Attorney General

Deputy Attorney General

                                                         ***   FOOTNOTES   ***

 1/It is our understanding that while OFM could grant such exemptions on a limited basis for these classes of contracts, it has thus far not chosen to do so.

 2/See, § 9, chapter 61, supra.

 3/Defined by § 2(4) to mean ". . . both state and local agencies and special districts . . ."