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As the ending of the 2013 Legislature is about to be written, professionals involved in the construction industry say there is a moral to the story.

It is about working and playing well with others, said construction lawyer Jeremy Vermilyea of Schwabe, Williamson & Wyatt.

The 2013 Legislature passed a number of major construction bills, including a reform of the public contracting law and a limit on retainage (money earned by a contractor or subcontractor but withheld for a certain amount of time).

Vermilyea said both bills were the result of unprecedented cooperation among contractors, subcontractors, public agencies, lawmakers and other stakeholders. The public contracting bill (Senate Bill 254) stands out, he said.

“The principle we (took) into this was that everything we did would be by consensus,” Vermilyea said. “We were all on the same page. It enabled us to work with legislative counsel knowing we had full agreement.”

The 2011 Legislature tried to reform when public agencies can hire contractors directly without going through a low-bid process. When a solution could not be found, state Sen. Lee Beyer, D-Springfield, organized a work group between sessions.

Vermilyea co-chaired the group along with Blake Underwood, an attorney with the Oregon Department of Justice.

“This bill was really a way to avoid a showdown between the primary contractors and subcontractors in the Legislature,” Vermilyea said. “Fighting battles out in the public doesn’t benefit anyone. It’s a really good model for working together in the future.”

John Rakowitz, public affairs director of Associated General Contractors’ Oregon-Columbia chapter, said lawmakers and stakeholders should definitely remember the lessons of 2013.

“There’s no doubt in my mind that it’s in the best interest of the industry to sort these things out amongst ourselves,” he said. “I hope that’s a trend going forward.”

The current session, set to adjourn on June 28, was gratifying, he added.

“We certainly settled some issues that have been under a lot of discussion for multiple sessions,” he said.

Although members of the work group entered the Legislature with a consensus on public contracting reform, SB 254 still needed time to work through the legislative process.

Vermilyea said the process only seems long.

“The working group only really had nine months of true work where we had the opportunity to truly dig into this,” he said. “The other issue is that we had to take the product that the work group came up with and have it translated by legislative counsel into a workable piece of legislation.”

Some things got lost in the translation, he added.

“Every time you have bunch of lawyers in a room, you’re going to have disagreement,” Vermilyea said. “It took a lot longer than anyone expected.”

Nonetheless, he said, the bill represents a substantive change in how contractors are selected for public construction projects.

“There was a perception that it was too easy for agencies to exempt their projects from the competitive bidding process,” Vermilyea said. “What we ended up doing is looking at existing requirements. There’s not a lot of data out there. A lot of the anecdotes suggest that the findings required by the existing standards were not being thoroughly vetted. We heard some stories of cities taking the copies of some findings the city next door has used without any real fact finding.”

Some cities’ documents allegedly had identical misspellings and typographical errors as those of neighboring communities.

Vermilyea said the new law will specify certain criteria that public agencies must consider – including operating cost – before choosing to directly hire a contractor. Then they must more rigorously defend that choice.

“They didn’t really have the obligation to go into that level of detail before,” Vermilyea said.

The original public contracting code, passed 20 years ago, left too many holes, he said.

“I don’t think the people who wrote the original law knew how these alternative processes would be used or anticipated the level of creativity that would be used to circumvent the low-bid process,” he added. “This is not a wholesale change of the law. It is more of a recalibration of the criteria of how these decisions are made.”

Rakowitz said the work group deserves a round of applause for its efforts.

“We also have to give a lot of credit to Sen. Beyer and Reps. Gene Whisnant (R-Sunriver) and Paul Holvey (D-Eugene). They put together a very thoughtful group of stakeholders, including public owners.

“It’s been a full two-year process. All the stakeholders operated in good faith. That’s how you get to the place where people say, ‘OK, this is a really important first step.’ ”

Ironically, Rakowitz said, the recession helped make the session more successful for the construction industry.

“Some of these issues were given a higher level of importance by the Great Recession we’ve gone through,” he said.

Vermilyea said retainage was one of those issues.

The ultimate bill (Senate Bill 405) limited retainage to 5 percent across the board – representing a compromise between subcontractors who wanted retainage abolished and contractors and employers who wanted as much flexibility as possible.

“This is an issue that’s been percolating for a bit,” Vermilyea said. “Everyone walked away a little unhappy, but everyone walked away knowing they had avoided an ugly fight in the Legislature.”

More issues need to be settled that way, Rakowitz said.

“We are trying to drive more of these issues from an industry point of view and not have them come to big squabbles, inside-the-industry kind of fights,” he said.

Everyone benefits from working and playing well with others, Vermilyea said.

“Finding the middle ground is always the preferable approach,” he said. “This session, we did a pretty good job of finding that middle ground.”