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5 <br /> significantly restricted the County's ability to impose a living wage requirement on vendors who do <br /> business with the County. In response to this legislation, Durham County, which had been requiring <br /> contractors to pay a living wage, removed this requirement and restricted its living wage policy to only <br /> apply to County employees. <br /> Consistent with this legislation, the County Attorney opined that a living wage requirement could only <br /> be applied to contracts that are not competitively bid. Under current law, this would include <br /> construction contracts under $30,000, purchases of supplies and apparatus under $30,000, and service <br /> contracts of any amount. <br /> • Construction Contracts under$30,000 <br /> The County could include a living wage requirement for construction contracts under $30,000 <br /> since these contracts are not competitively bid. According to Asset Management Services <br /> (AMS), the County engages contractors for projects under $30,000 approximately 60 times per <br /> year. AMS estimates that approximately forty percent (40%) of these contracts are likely to <br /> employ entry level positions or temporary workers that may fall below the living wage level. <br /> AMS estimates that the cost of these contracts would increase by approximately ten to fifteen <br /> percent or $15,000 to $20,000 annually if a living wage requirement were included in the <br /> contracts. <br /> • Purchases of Supplies and Apparatus under$30,000 <br /> Although the County could mandate a living wage for purchases of supplies and apparatus under <br /> $30,000, the application of a living wage policy for these transactions would be difficult to <br /> enforce. Examples of supplies and apparatus under $30,000 include office supplies and <br /> machinery, some vehicles and non-motorized equipment, heavy machinery,tools, and computer <br /> equipment. Identifying the workers who produce those particular supplies and tracking the <br /> wages paid to workers assembling those particular supplies or pieces of equipment would be <br /> problematic. <br /> • Service Contracts <br /> A living wage policy could be applied to a broad range of service contracts; however, the policy <br /> could only be used when a bid is not solicited. For professional service contracts, the County <br /> has frequently used a Request for Proposal (RFP) process as a tool to facilitate the selection of <br /> the best vendor to provide a particular service. As part of that grading process, price is used to <br /> compare competing proposals. The County Attorney has advised that the RFP process should <br /> not be used if the County applies a living wage provision to service contracts. The only legally <br /> acceptable solicitation is a request for qualifications (RFQ). <br /> The request for qualifications is not a bid. The process does not rely on price for any part of the <br /> selection decision. Rather, it uses vendor qualifications as the sole determinant in selecting <br /> among competing vendors. The RFQ process is typically used for complex professional services <br /> like architectural, engineering, or other forms of consulting services where a vendor's <br /> qualifications are paramount and the scope of services is not precisely defined. <br /> The disadvantage of using an RFQ process is that price information is not available during the <br /> initial selection process. The County would have the opportunity to negotiate a fee with the <br /> most qualified vendor and would have the option of negotiating with a competing firm if staff <br /> were not able to come to an agreement on price terms, but the County would not have the <br /> benefit of using comparative cost information during the initial selection process. <br /> Page 1 2 <br />