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1. What is Public Work?

“Public Work” means all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of the state or any municipality (the City of Anacortes) or which is by law a lien or charge on any property therein. The term work is very inclusive, especially in conjunction with ‘construction, alteration, repair or improvement’. All work shall comply with the provisions of RCW 39.

The term contract shall mean a contract in writing for the execution of public work for a fixed or determinable amount duly awarded after advertisement and competitive bid. However, a contract which is awarded from a small work roster need not be advertised.

Examples of Public Works Contracts:

• All construction projects, large or small.
• All building or building system repairs (building maintenance and system maintenance is not considered public works but is subject to prevailing wage requirements).
• All infrastructure installation, repairs or removals.

State of Washington RCW 39

2. What is required of a Contractor once they are awarded a Public Works Contract?

• Pay Prevailing Wages in accordance with RCW 39.12 – including filing Intents to Pay Prevailing Wages and Affidavits of Wages Paid.
• Provide the City of Anacortes proof of insurance and additional insured endorsements as required in the contract documents.
• Ensure that the Contractor and any subcontractors are current on Industrial Insurance Premiums with Labor and Industries (payment may be withheld until resolution of incomplete or unpaid premium reports).
• Provide a Performance Bond and Payment Bond, each for 100% of the contract amount (including taxes).
• Provide a signed Certificate of Compliance with Wage Payment Statutes.
• Have a current City of Anacortes business license or obtain one before beginning work.
• Ensure that the Contractor and any subcontractors are current with Department of Revenue taxes.
• Ensure that the Contractor and any subcontractors are current with Department of Employment Security taxes.

3. When will I get my retainage back?

Retainage will be released 45 days after Final Acceptance, provided that the following has occurred:

• All liens placed against the project have been released. For projects over $35,000, releases from the Department of Labor and Industries, Department of Employment Security and the Department of Revenue will also be required. (click here for more information regarding State releases)
• Affidavits of Wages paid for the final correct contract amount are approved and on file for the Contractor and any subcontractors.
• Worker’s Compensation Premiums for the Contractor and any subcontractors are current.

Final Acceptance cannot be issued until all requirements of the contract have been met including, but not limited to: 

• Intents to Pay Prevailing Wages for the Contractor and any subcontractors have been approved by the Department of Labor and Industries
• Final invoice for the project received by the City
• The Project Manager has determined the Contractor has completed the required deliveries or performed the required services
• All as-builts have been received by the City

Labor & Industries Intents & Affidavits

4. What do I need to bid on a Public Works project?

A Contractor or subcontractor working on a public works project must, at a minimum, meet the following mandatory requirements (RCW 39.04.350):

• At the time of bid submittal, have a certificate of registration in compliance with chapter 18.27 RCW (Contractor License);
• Have a current state unified business identifier (UBI) number;
• If applicable, have industrial insurance coverage for the bidder’s employees working in Washington as required in Title 51 RCW; an employment security department number as required in Title 50 RCW and a state excise tax registration number as required in Title 82 RCW;
• Not be disqualified from bidding on any public works contract under RCW 39.06.010 or 39.12.065(3);
• Not have any apprenticeship violations, if applicable;
• Have received training on the requirements related to public works and prevailing wage under chapter 39.04 RCW and chapter 39.12 RCW, or received exemption from this requirement by completing three or more public works projects and have had a valid business license in Washington for three or more years;
• Within the three-year period immediately preceding the date of the bid solicitation, not have been determined by a final and binding citation and notice of assessment issued by the department of labor and industries or through a civil judgment entered by a court of limited or general jurisdiction to have willfully violated, as defined in RCW  49.48.082, any provision of chapter  49.46, 49.48, or  49.52 RCW, and
• Before award of a public works contract, a bidder shall submit to the contracting agency a signed statement in accordance with RCW 9A.72.085 verifying under penalty of perjury that the bidder is in compliance with the responsible bidder criteria requirement of subsection (1)(g) of RCW 39.04.350. 

Washington State RCW 39.04.350

5. Why are bonds required?

The City is required, with limited exceptions, to obtain both a Performance and a Payment bond for each public works project per RCW 39.08.010. The City requires separate Performance and Payment bonds for 100% of the contract amount furnished on bond forms standardized by the City Attorney's office.

Performance Bonds- The purpose of a performance bond is to guarantee that the Contractor shall “faithfully perform all provisions of the contract.”

Payment Bonds- The purpose of a payment bond is to guarantee that the Contractor shall “pay all laborers, mechanics and sub-contractors.”

State of Washington RCW 39.08.010

6. What is retainage?

The City is required to withhold retainage (a portion of the monies owed to the Contractor) to ensure that all public works requirements have been met per RCW 60.28.011. The amount of retainage is affected by the amount of the project and the option chosen by the Contractor.

Generally five percent (5%) of the contract amount (including taxes) is subject to retainage. RCW 60.28.011 allows for four options for placement of retained funds until they are released to the Contractor. The first option will be utilized unless the Contractor advises the Contract Specialist in writing at the time the Contractor executes the contract that it elects to use a different option and either submits a retainage bond or returns a Retainage Account Escrow Agreement signed by its designated financial institution. The Contractor’s options for placement of retained funds are as follows:

• Elect to have the retained amount held in a fund by the City.
• Elect to have the City deposit the retained amount in an interest bearing account, not subject to withdrawal until after final acceptance of the work.
• Elect to have the City place the retained amount in escrow which shall be converted into bonds and securities chosen by the Contractor and approved by the public body.
• Submit a retainage bond in the amount of 5% of the contract amount. The bond must be furnished on a bond form standardized by the City Attorney's office and issued by a surety currently authorized by the State Insurance Commissioner to do business in Washington State.

7. What is prevailing wage?

Contractors and subcontractors on public works projects, regardless of the size, are required to pay their employees the prevailing wage for the county in which the work is being done. Wages are determined by the Industrial Statistician at the Department of Labor and Industries and can be located on the department’s website. The prevailing wages established at the time of the bid opening shall be in effect for the duration of the project.

Washington State RCW 39.12

8. What is a Notice of Completion?

After final acceptance of any public works project over $35,000, a public agency must file a Notice of Completion with the Department of Revenue (DOR), Department of Labor and Industries (L&I), and Employment Security Department (ESD) (RCW 60.28.051).

Each state agency must approve the Notice of Completion separately, at which point each agency will send a certificate of release certifying that all applicable taxes, premiums, and penalties have been paid. If DOR, L&I, or ESD report that there are unpaid taxes or fees, the agency must pay the missing amount to the state within 10 days and subtract it from the retainage (RCW 60.28.060).

For further information, please see the ESD Retainage Release FAQ.

9. Are prevailing wages required for non-standard items?

Click here for the Washington State L&I's list of criteria to be used in determining whether a prefabricated item is "standard" or "non-standard". These criteria shall be used by the Contractor (and the Contractor's subcontractors, agents to subcontractors, suppliers, manufacturers, and fabricators) to determine coverage under RCW 39.12 and if prevailing wages apply.