June 18, 2014

New Rules Regulating Public Contracting


For many years, Oregon law has authorized public agencies to adopt their own public contracting rules regulating their contracting, purchasing and competitive bidding processes. If a public agency failed or declined to adopt its own public contracting rules, then the rules adopted by the county in which the agency is located would apply to the agencies' contracting process. The law also provided that the Attorney General was to prepare and adopt Model Public Contract Rules which local governments could, at their discretion, adopt for application within their jurisdictions.

Recently, however, Governor Kitzhaber signed House Bill 2024, adopted by the Legislature, which requires that all government agencies which contract with private parties must abide by the Oregon Attorney General Model Public Contract Rules in their bidding and contracting, unless the agency has adopted its own contracting rules. The bill is designed to provide some certainty regarding what rules apply to a particular agency's contracting process and to eliminate confusion caused when an agency adopts no rules at all.

The bill will go into effect 90 days after the end of the Legislative Assembly, and each public contracting agency must decide by that time whether to accept the Model Rules or to adopt its own. If an agency does nothing, then the Model Rules will apply to all public contracting and purchasing by the agency. If an agency chooses to adopt its own public contracting rules, then the Model Rules will not apply. Alternatively, a local jurisdiction could accept the Model Rules and, in addition, adopt supplementary rules to adapt the Model Rules to the agency's particular needs.

Because of the above Legislation, every public contracting agency, including cities, counties, school districts and special districts, must determine in the near future whether to accept the Attorney General's Model Public Contract Rules or adopt rules of their own. If an agency declines or fails to make that decision, then the Model Rules will apply automatically under the new law. Local agencies should seek qualified construction legal counsel for assistance in determining whether to accept the Model Rules, and if not, how to prepare separate rules for public contracting.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations. For more information on this topic, please contact marketing@jordanramis.com or call (888) 598-7070.


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