The state School Building Authority’s board postponed earlier this week voting on extensive proposed policy changes.
The delay came after SBA Executive Director David Roach said attorneys still hadn’t finished fully reviewing the proposals.
The SBA staff and board had placed the proposals out for a public comment period, which ended July 5, without having yet had the legal review. After expressing confusion and discussing their options Monday, board members decided to delay action until the review is done.
Roach, a former county schools superintendent, said he can’t recall whether any attorneys had backed up an argument he used to push for changes in the “18 points,” which are part of the bidding process used to pick which construction companies win multi-million dollar school building and renovation contracts. Roach had cited a state Supreme Court case to make his point.
In a shift, he pledged Monday that if the legal review, estimated to take two weeks, finds the proposed changes to the 18 points are unneeded, he’ll propose keeping the current requirements.
The meeting ended with an SBA consultant, Win Strock, and an SBA board member, Steve Burton, arguing about the bidding requirements and the board chairman, Brian Abraham, knocking on the board desk and calling for the argument to cease.
Despite routinely distributing over $50 million annually to school building, renovation and repair projects, the SBA doesn’t have an in-house attorney. Instead, it’s been using attorneys at the state Attorney General’s Office.
Before Roach became executive director, a now-former SBA staff official admitted the agency didn’t follow the advertisement process for seeking bids for hiring “construction management” firms.
After Roach became executive director, SBA staff began pushing major policy changes affecting more than just the construction management controversy.
Questions then arose as to whether changes the SBA made to certain rules since 2008, without lawmakers’ approval, might not have been properly approved.
On Monday, Roach conceded this latest SBA policy overhaul hadn’t been through a legal review.
“It was not done the way it should’ve been done, like I said earlier,” Roach said. “It should’ve been the whole document, finished product, as far as we were concerned, submitted and reviewed before we went to the board with it the first time.”
County school systems compete to persuade the SBA board to fund their proposed school-related projects.
The 18 points are supposed to be part of a second competition that comes after a county wins SBA funding: choosing which construction companies win bidding competitions to earn the contracts that the SBA money funds.
The points say that, because the SBA “must award bids only to the lowest qualified bidder,” county school systems must consider the list of 18 factors when determining “whether a contractor’s bid is not only the lowest, but the most qualified.”
School systems can use criteria to determine which company wins the contract rather than just picking which company submits the lowest bid.
School systems can reject bids from companies that aren’t deemed “responsible” or “qualified.” This can prevent incompetent companies from underbidding good companies to win public money to build schools they can’t build.
Under the current 18 points policy, for example, Point 1 for consideration is “the years of experience the bidder has in the construction, renovation or building repair business.” Point 4 is “the bidder’s performance on similar construction projects,” and Point 18 is “response from bidder’s references and recommendations of other owners for whom the bidder has worked.”
The proposed changes would erase Point 1 and Point 18, and alter Point 4 to say instead that the only past performance considered will be performance on SBA-funded projects. Other points would be preserved in different ways.
SBA staff have said a particularly problematic section of the 18 points, because it “invites ambiguity,” is a caveat at the end of the list. The caveat, which would also be erased, says “No single criteria will be considered the controlling factor in determining whether a bid is or is not the ‘best’ bid.”
“How do you exactly determine someone’s qualifications, what creates a threshold?” SBA Architectural Services Director Ben Ashley said. “So we eliminated any gray area we created specific bidding conditions with specific evaluation criteria and hope to remove the gray area.”
Ashley suggested that, even with the changes, a school system could still deny a bidder a contract based on the company’s references, but couldn’t say that wouldn’t put the school system in legal danger.
In arguing for the 18 points changes, Roach had referenced a 2015 case in a letter addressed to SBA board members, schools superintendents and school design and building companies.
In the case, about renovations to the West Virginia Lottery Building in Charleston, the state Supreme Court upheld Kanawha Circuit Court Judge Jennifer Bailey’s decision to award the Lottery renovations contract to the lowest bidder. That lowest bidder was Maynard C. Smith Construction Co.
Bailey’s decision overruled state employees’ earlier choice to throw out Maynard C. Smith’s bid because the company didn’t follow the bidding instruction to provide references — even though the Lottery’s bid forms didn’t include a section to list references and state employees never checked the references.
Citing the case, Roach’s letter says the 18 points could allow for a contract award decision that is “based upon an ambiguous ‘requirement’ set forth in the bid documents that was of no consequence.”
But the state Supreme Court, while upholding Bailey’s ruling favoring Maynard C. Smith, did reject the company’s argument that, “When specified construction services are sought from licensed, bonded contractors, an agency must make the award to the low cost bidder.”
The justices noted the law says “lowest [cost] qualified responsible bidder,” and “responsible” means having the “skill, judgment, and integrity” and “financial resources” needed to get the job done.
What the attorney general’s attorneys think is unclear.
“We cannot violate the attorney/client relationship, and I would refer you to our client, the School Building Authority,” said Curtis Johnson, spokesman for the Attorney General’s Office.
Regarding the argument at the end of the meeting, Strock alleged Burton had mischaracterized something he said. Burton then criticized Strock’s advice to get rid of the requirement for bidders’ references.
Strock replied that disqualifying a contractor “is a very difficult thing to do.”
“I’ve heard,” Strock then said, “a lot of threats about what happens if certain things don’t go into this document, and I only wish I could get enough of the attorneys that represent contractors around here to come in and threaten what would happen if certain things do go into these documents.”
“Let me ask you a question, Mr. Strock. If you were to build a house, would you ask for references?” Burton asked, as the board chairman tried to stop the argument.
“I don’t need to be attacked by him, he’s a volunteer,” Burton said.
Strock said that means he has no ax to grind, unlike others in the room. Board members quickly ended the meeting.