Public Contracting Rules 2024
Public Contracting Rules 2024
By: Carolyn H. Connelly
For those clients who have adopted our public contracting rule packet, the determination has been made – no public contracting rule update is required or will be issued for 2024! As you likely know, a contracting agency that does not adopt its own rules is governed by the Attorney General’s model rules. ORS 279A.065(5). Contracting agencies that opt out of the AG’s model rules are required to review changes in public contracting laws to determine whether rule updates are needed to ensure compliance with Oregon’s Public Contracting Code (ORS 279A, 279B, and 279C.)
Our office most recently updated our rule packet in 2023. If you have yet to adopt that update, you may want to give us a call in order to take advantage of authorized procurement threshold increases. Direct award is now available for public improvement and goods and service contracts of no more than $25,000. The intermediate procurement upper threshold similarly increased from $150,000 to $250,000 – but only for goods and service contracts.
Similar significant changes were not adopted during the legislature’s 2024 short session. However, two changes may impact certain of your entity’s contract award and negotiation procedures over the next year.
- SB 1575: Effective January 1, 2025, the legislature is prohibiting public entities from contractually requiring architects, engineers and surveyors to indemnify the public body for their work until liability has been established during adjudication. Essentially, this will eliminate our standard requirement for architects and engineers “to defend” the entity in the event of third-party claims associated with their work. We believe indemnification and hold harmless requirements may remain – as long as they apply only after a judge allocates fault. The bill does not apply to Design Build contracts. This prohibition sunsets in 2035 – unless the industry successfully lobbies for an extension. Architects and engineers (or at least their insurance carriers) are well aware of this provision, so be prepared to update your standard contract terms on and after January 1, 2025.
- HB 4006: Effective March 7, 2024, a contractor now has the option to provide a surety bond in lieu of retainage to ensure completion of a project to specifications. As a result, your agency is required to accept a bond, when offered, unless your project manager can identify good cause to require retainage and provides that finding in writing to the contractor. If or when you receive such a request during any public improvement project over the next year, we would be happy to help assess the sufficiency of the offered bond.
In the meantime, happy public contracting over the coming year! Be assured, LGLG attorneys and staff are always available to assist with your entity’s procurement and contracting questions and required documentation. Stay tuned –the legislature is likely to amend ORS 279A, 279B and/or 279C during its 2025 regular session. If so – we will issue an updated 2025 public contracting rule packet next year.
