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.

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.

Restrictions on Political Campaigning by Public Employees

Emily Guimont

From our Fall 2022 e-newsletter

Election season is here! This is a busy, exciting, and complicated time for many of our clients. In this article, we review ORS 260.432’s restrictions on political campaigning by public employees.

ORS 260.432 prohibits “public employees” from “promoting or opposing” certain political activities “while on the job during working hours.” It also forbids any person from requiring public employees to promote or oppose political activity. Finally, it requires public employers to post a notice that outlines its restrictions.

Who is subject to ORS 260.432?

ORS 260.432 restricts “public employees.” All non-elected public employees are “public employees” subject to ORS 260.432. Appointed officials are public employees when they act in their official capacity, such as attending commission meetings or working on projects for their commission.

Elected officials are not “public employees,” but remember that ORS 260.432 also prohibits “any person” from requiring public employees to oppose or promote certain political activities while on the job during working hours. Therefore, elected officials may not require public employees to engage in political activities. For example, an elected official violates ORS 260.432 when that official directs a public employee to prepare the official’s campaign materials while the public employee is on the job during working hours.

Volunteers are not “public employees.” However, you may restrict volunteers’ political activity through your own policies. Similarly, independent contractors are not “public employees,” but work performed by independent contractors for a public entity cannot promote or oppose certain political activities.

What political activities does ORS 260.432 restrict?

Under ORS 260.432, public employees may not engage in the following political activities while on the job during working hours:

• Promoting or opposing any political committee;
• Promoting or opposing the nomination or election of a candidate;
• Promoting or opposing the gathering of signatures on an initiative, referendum, or recall petition;
• Promoting or opposing the adoption of a measure; and
• Promoting or opposing the recall of a public office holder.

ORS 260.432 does not restrict activities that are not on this list. For example, a public employee may personally support or oppose a political issue as long they do not engage in any of the restricted political activities while on the job during working hours.

A common question is whether public employees may promote or oppose political activities by displaying or wearing political messages, distributing political material, or engaging in political discussions. ORS 260.432 does not outright forbid public employees from doing so, as long as they do not do so while they are on the job during work hours. However, public employers may implement written policies to regulate their employees’ political expression in the workplace. We encourage public employers to have such policies in place and we are happy to help write them.

When is a public employee “on the job during working hours?”

ORS 260.432 states that public employees may not promote or oppose certain political activities “while on the job during working hours.” It may be difficult to determine when an employee is “on the job during working hours,” especially if the employee is salaried. However, the general rule is that a public employee is “on the job during working hours” whenever that employee is performing work in an official capacity, regardless of when or where that work is performed.

When do ORS 260.432 restrictions apply?

For initiative, referendum, and recall petition activities, ORS 260.432 applies when the prospective petition is filed with the elections filing officer.

For ballot measures, ORS 260.432 applies when the ballot measure is certified to the ballot.

For candidates, ORS 260.432 applies when the individual becomes a candidate.

For political committees, ORS 260.432 applies when the political committee is active.

How is ORS 260.432 enforced?

The Secretary of State’s Elections Division enforces ORS 260.432. Any Oregon elector may file a complaint with the Elections Division alleging that a violation of ORS 260.432 has occurred. The Elections Division will investigate the complaint. If the Elections Division finds that the violation occurred, then the Elections Division will issue a fine to the person who violated ORS 260.432. The person can either pay the fine or request a hearing before an administrative law judge to contest the Election Division’s finding.

Have Additional Questions?

Contact our office! Situations in which ORS 260.432 may apply are often complex and we are happy to assist. Additionally, the Secretary of State publishes guides that you may find helpful: https://sos.oregon.gov/elections/pages/manuals-tutorials.aspx