In general, public hospital districts have great latitude in contracting for services required to operate the district. Several types of services are specifically authorized by statute and many more are implied in the broad statutory delegation of authority to the Board of Commissioners. A few types of services require the public hospital district to follow specific procedures prior to the retaining of an individual for professional services.

Public hospital districts are given broad authority and discretion to enter into contracts and employment agreements with attorneys, technical or professional assistants and employees in order to carry out the functions of the public hospital district [RCW 70.44.060(10)]. No selection process is defined by statute; therefore, the district has full discretion to hire and retain such services as needed. This statute is broad enough to cover almost any service required by the public hospital district, including but not limited to nurses, physicians, other health care providers, maintenance and security personnel, accountants and business office personnel, data processing professionals, administrative personnel, and others. Certain individuals, as set forth below, require the public hospital district to follow a specified procedure prior to engagement by the public hospital district.

Prior to retaining a contractor for work to be performed in excess of $5,000, the public hospital district must comply with the public bid laws. [RCW 70.44.140]

Prior to the sale of real property, a public hospital district is required under RCW 70.44.300(2) to obtain market value appraisals not more than one year prior to the date of sale by three licensed real estate brokers/professionals/ designated real estate appraisers (as defined in RCW 74.46.020). These individuals may be selected by the Board of Commissioners. The sale price may not be less than 90% of the average of the appraisals. If the public hospital district desires the use of a licensed real estate broker for the sale of the real property, the Board of Commissioners is authorized to negotiate and enter into a contract pursuant to RCW 70.44.300(4). The fee or commission may not exceed 7% of the resulting sale price for a single parcel. Further, no licensed real estate broker or professional selected by the Board to appraise the market value of the property, as described above, may be a party to any contract with the public hospital district to sell property for a period of three years after the appraisal. In other words, no realtor may participate in the market value appraisal and the resulting sale of the real property. This is due to the fact that the appraisal must be less than one year old and, for a period of three years, the appraiser is barred from entering into a contract with the public hospital district to sell the property.

Chapter 39.80 RCW sets forth procedures hospital districts must follow when procuring architectural and engineering services. These statutes require that a public hospital district publish in advance its requirements for professional services. The announcement must state concisely the nature of the project or work for which the services are required, and the address of an individual who can provide further details. Compliance may be by (1) publishing an announcement on each occasion when an architect or engineer is required, or (2) announcing generally to the public its projected requirements for any category or type of architect or engineer services which are anticipated to be required. The announcement typically is done through a local trade journal or newspaper.

It is important to note, however, that a hospital district may award a contract of any value for the design, fabrication and installation of a building engineering system, without following the Chapter 39.80 RCW protocols, as long as the district uses one of the competitive bidding processes described in RCW 39.04.290.

Further Legal Background

Chapter 39.80 RCW requires public hospital district is to encourage architectural and engineering firms to submit annually a statement of qualifications and performance data. The agency is to evaluate such statements with regard to a proposed project and conduct discussions with one or more firms regarding anticipated concepts and the relative utility of alternative methods of approach for furnishing the required services. The public hospital district is to select a firm based upon criteria established by the hospital district which it deems to be the most highly qualified to provide services for a proposed project. Any procedures and guidelines adopted must include a plan to ensure that minority and women-owned firms are afforded the maximum practicable opportunity to compete for and obtain a contract for services. The level of participation by minority and women-owned firms must be consistent with their general availability within the professional community involved. The public hospital district may negotiate a contract with the most qualified firm for architectural or engineering services at a price which the district determines is fair and reasonable. Such determination is to take into account the estimated value of the services to be rendered, as well as the scope, complexity and professional nature of such services. In the event that the public hospital district deems an emergency is present, the district need not comply with these procedural requirements.