2022 Public Contracting Rules Update

Carrie Connelly

From our Fall 2022 e-newsletter

Many of you have previously adopted our public contracting rule packet. As you know, our packet is based on the AG’s Model Rules, with changes that simplify and tailor those rules for our clients – plus add exemptions not available under the AG’s Rules. In the absence of locally adopted rules, your entity is governed solely by the AG’s Model Rules, which include state agency requirements not applicable to smaller, local governments. Over the years, we have recommended not only for your entity to adopt its own purchasing rules to replace the AG’s Model Rules, but to update them as required to accommodate legislative updates.

The 2021 legislature adopted several Oregon Public Contracting Code amendments. The AG is currently in the process of updating its model rules to reflect those legislative changes. Since the AG’s rules have yet to be issued, I have reviewed all statutory amendments and incorporated needed modifications into our public contracting rule packet. Pursuant to ORS 279A.065(6)(b), such a review is required for any entity which has adopted its own rules.

While some legislative amendments do not affect our clients, the following amendments authorize desirable updates:

1. The 2021 legislature increased the small procurement threshold for public improvement contracts from $5,000 to $10,000, which matches the threshold for goods and service contracts.

2. Public hearings are no longer necessarily required for public improvement contract exemptions. Rather, statewide published notice continues to be required, followed by a hearing only upon request.

3. For those of you who have not adopted rules since 2019, another helpful update allows your agency to use price information in architect/engineer consultant (i.e. Division 48) selection procedures.

As with our prior rule updates, we will provide an explanatory letter, updated rules, an adopting resolution, and accompanying findings for a flat fee. Entities which have adopted our public contracting rules since 2014 can update for $185, while those who have not previously purchased rules or updates since 2014 can purchase a full packet for $725.

Please contact Carrie Connelly (chc@localgovtlaw.com) or Kim Dahlgren (kimd@localgovtlaw.com) if your entity wishes to purchase a 2022 public contracting packet from our office.

Enforcing Policies Saves Money

Christy Monson

Clients sometimes call us with questions regarding the discipline of employees for violation of sick leave or vacation policies. As public employers, your discipline options may be governed by a collective bargaining agreement, by personnel policies, or by both. However, before jumping to your discipline options, it is often useful to review these policies and agreements to see if your staff is properly applying them. You may have provisions in either your collective bargaining agreement or your personnel policies which allow you to effectively manage employee behavior without initiating discipline as your first option, such as: requiring a doctor’s note and disallowing the use of other paid time off once an employee’s sick leave allotment has been expended. Using these provisions correctly and applying them even-handedly may help you avoid discipline problems, costly grievances, and can control costs.

Allowing continued violations of your sick leave policies can cost a government thousands of dollars, can injure employee morale, and may jeopardize your government’s ability to enforce your rules later on. As just one example, in Nevada, Clark County tracked firefighters’ use of sick leave and found a pervasive pattern of abuse. The county then started enforcing its own sick leave policies and within one year the use of sick leave by the fire department fell by 57,000 hours. This change in supervisor and employee patterns saved the county millions of dollars.

If after reading this you review your personnel policies or your collective bargaining agreements and find that you’d like to change the way you are enforcing existing policies, you should contact your attorney before significantly changing any past practices. Furthermore, should you decide that individual employee discipline is warranted, we always recommend that you contact an attorney and your insurer before taking significant disciplinary action. In taking these simple steps, you enforce your policies, avoid labor strife, and save your government time and money.

Executive Sessions: A Review

Emily Guimont

From our Spring 2022 e-newsletter

Oregon Public Meetings Laws and Executive Sessions

Oregon public meetings laws are designed to ensure public access to governing bodies by requiring that the “decisions of governing bodies [are] arrived at openly.” ORS 192.620. The general rule is that public meetings must be open to the public to attend. Executive sessions provide a limited exception to this rule. An executive session is a “meeting or part of a meeting of a governing body that is closed to certain persons for deliberation on certain matters.” ORS 192.610(2). As its definition indicates, executive sessions may only be held for “certain” reasons. ORS 192.660 lists these reasons, which are the only reasons for which an executive session may be held.

Executive sessions allowed under ORS 192.660 are narrowly interpreted, and each has specific requirements to justify its use. As a dangerous consequence, ORS 192.660 can easily be misunderstood or misapplied, as illustrated below:

1. Employment of Public Officers, Employees, and Agents.

ORS 192.660(2)(a) states, “the governing body . . . may hold an executive session to consider the employment of a public officer, employee, staff member or individual agent . . . .” What it doesn’t tell you is that ORS 192.660(7)(d) limits such executive sessions to where: (1) the vacancy has been advertised; (2) the local government has adopted regular hiring practices; (3) for officers, the public has had an opportunity to comment on the potential hiring; and, (4) for chief executive officers, the governing body has adopted hiring standards, criteria, and policy directives in open meetings with the opportunity for public comment. As a result, an executive session under ORS 192.660(2)(a) may only be held if the local government complied with ORS 192.660(7)(d).

2. Legal Counsel

ORS 192.660(2)(h) allows a governing body to hold an executive session to discuss, with its legal counsel, its “legal rights and duties . . . with regard to current litigation or litigation likely to be filed.” Governing bodies are routinely tempted to stretch this exception to include discussions on any “legal matter.” Prior to scheduling such an executive session, confirm that: (1) the discussion is directly with legal counsel; (2) the discussion concerns your entity’s specific legal rights and duties in a particular situation; and (3) your entity is either named in active litigation or is about to be in a court action. ORS 192.660(2)(h) does not justify general discussion of your entity’s legal rights, risks, or liabilities, with or without your attorney’s presence.

3. “Deliberations” and Final Actions/Decisions

Executive sessions may only be used to receive protected information and “deliberate” on a matter—final decisions and final actions are expressly forbidden. ORS 192.660(6). A governing body may reach a consensus in executive session. For example, a governing body may direct its designated individual on how to negotiate on the next stage of a negotiated real estate deal. However, that transaction cannot be finalized until approved in open session.


Executive sessions can be useful tools to allow governing bodies to discuss confidential matters not appropriate at the time for general public knowledge. However, as illustrated above, executive sessions are authorized for only a limited number of reasons under limited circumstances. Be sure that your board or council is familiar with the allowances and limitations of ORS 192.660 before calling an executive session. It is never a bad idea to check with legal counsel before noticing the meeting to ensure all requirements are properly met.

To CM/GC or not to CM/GC (or to Design Build?)

Carrie Connelly

From our Spring 2022 e-newsletter

The alternative contracting methods of Construction Manager/General Contractor (CM/GC) and Design Build have been used for seismic upgrades and other public contracting agency projects throughout the state. However, I continue to see entities confused or not gaining the benefits of these methods. Small entities often forge ahead on the advice of consultants, only to find themselves without the proper expertise to manage unnecessarily costly and time-consuming projects.

Before blithely heading down the primrose path, be aware that these methods are not only substantively, but also procedurally more complicated than a standard design-bid-build process. In summary, each alternative contracting approach requires an initial exemption, supported by specific findings, adopted after notice and a public hearing. Your governing body needs to weigh its options and associated pros and cons before choosing which construction process is appropriate for your particular project.


Without an exemption, construction must follow a design-bid-build approach. That involves a retained architect designing a structure, then putting those drawings out for bid, with award made to the lowest responsible bidder. In contrast, a CM/GC allows a contractor to be chosen before or during the design process. The CM/GC contractor then joins the architect (under a separate contract with the public contracting entity) in the design process. The “team’s” goal is to obtain value engineering cost savings and often phased construction benefits. Once design is complete, an addendum is executed setting a “guaranteed maximum price” (GMP) for the construction.

Nearly a decade ago, the legislature attempted to dissuade local contracting agencies from using CM/GCs. Legislation preempted all prior public entity rules governing CM/GC contracts, and directed the Attorney General (AG) to replace those locally adopted rules with model rules. (See, Oregon Administrative Rule (OAR) 137-049- 0690.) We all believed that was the end of CM/GCs, but CM/GCs continued in use, subject to stringent procedural hoops. Whether it is advisable to jump through those hoops depends on the construction project at issue.

A CM/GC’s “phase one” role involves reviewing and analyzing the design as it develops and proposed materials in order to minimize errors, delays, unexpected costs and other issues during construction. Benefits also can include improved safety, reliability, and efficiency at a reduced price within a shorter construction window. Once design is completed, the cost of construction, materials, labor and other costs are distilled into a GMP. The GMP is agreed upon by amendment, triggering construction pursuant to the completed designs.

Despite potential benefits, the CM/GC arrangement is a “technically complex project delivery system.” OAR 137-049-0690(1). Contracting agencies should use it only with the assistance of knowledgeable staff or consultants who have a demonstrated capability of managing the CM/GC process and have expertise in engineering, construction scheduling and cost control, accounting, legal, public contracting and project management. Most public contracting agencies do not have expertise in all these areas, which is why architects and contractors are placed in the forefront on these projects.


Design Build is a public improvement contract in which the construction contractor also provides all required design services. OAR 137-049-0610(6). The project team consists of the Design Builder and public contracting agency. In other words, a single contractor is responsible for providing your entity with all professional design services and construction labor necessary to design and construct your project.

As with CM/GC’s, Design Build contracts have “not readily apparent” technical complexities. OAR 137-049-0670. Similar to CM/GCs, your entity may only use Design Build contracting methods with the assistance of knowledgeable and experienced staff or consultants. You must reasonably be able to anticipate benefits such as a need for a single point of responsibility, value engineering, and construction commending prior to completion of a “buildable design.” The goal is to reduce contract claims, while shortening the project time.


An exemption required for a CM/GC or Design Build involves findings that the chosen method will not encourage favoritism, nor diminish competition, and will result in substantial cost savings. Findings must also identify anticipated time savings and the technical complexity of project construction. For example, construction that must overlap with ongoing building use and operations can satisfy this last requirement.

Prior to adopting an exemption resolution, at least fourteen (14) days’ notice must be provided by publishing in a newspaper of statewide circulation (i.e., the Daily Journal of Commerce), and in as many others as desired by your entity. After the exemption’s adoption, your entity will issue its solicitation (likely a request for proposals), advertise statewide, evaluate and rank proposers, before finally awarding a contract.

Upon project completion, exempt contracting methods require a post-project evaluation. Essentially, the evaluation answers whether it was in your entity’s best interest to conduct the CM/GC or Design Build process. Findings must address financial information, successes and failures of the process, and conclude with an objective assessment of use of the process. The evaluation must be completed and submitted to your local contract review board (i.e., your district board or city council) within thirty (30) days of project acceptance.


Public contracting agencies often pursue alternative contracting methods based upon consultant advice that it will help address time/cost constraints. The ability to overlap design with construction can eliminate the need for later change orders, keep projects on schedule, and result in a sound product at a lower cost. In other cases, hoops are jumped through, the project completed, all for about the same cost and within the same timeframe as if a standard design-bid-build process had been followed.

Your governing body is in the best position to evaluate the technical complexities of your agency’s project and the value of using a CM/GC or Design Build contract. Involving your attorney early will ensure that all applicable requirements are addressed before a contract is awarded.