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Vast School Building Authority proposed policy changes on public comment

The state School Building Authority is accepting public comments through noon Friday on extensive proposed policy changes.

“Nearly every section, appendix, form, and policy was amended,” SBA Executive Director David Roach wrote in a May 29 letter addressed to SBA board members, schools superintendents and school design and building companies.

Comments can be made via email to shannon.l.driver@wv.gov and the SBA board may consider them in approving, altering, adding to or rescinding the changes.

Among many other things, the proposals include reducing the minimum number of students that a planned school must have to qualify to receive funding from the SBA board. However, current policy and the proposed changes both allow the SBA to waive this minimum enrollment.

The changes would also newly set maximum fees that architecture/engineering companies could earn on SBA-funded addition/renovation projects with construction costs under $3 million. Under-$3 million projects currently have no set minimum or maximum fees.

But much of the SBA board members’ public discussion of the proposals late last month focused on the fact that they’d erase something called the “18 points.” The changes would also erase the Contractor Qualification Statement.

The proposals would maintain parts of these, but not all, and what would be kept might function much differently.

County school systems compete to persuade the SBA board to fund their proposed school building, renovation and repair projects.

The 18 points and qualification statement are intended to be part of a second competition that comes after a county wins SBA funding, and factor into choosing which construction companies win bidding competitions to earn the contracts that the SBA money funds.

“Bidding is such a contentious task with potentially millions of dollars on the line,” said SBA Architectural Services Director Ben Ashley. “Any kind of uncertainty you place in the bidding conditions is not good, especially after you’ve accepted the numbers [on how much a company would charge] and read those aloud.”

SBA staff argue the 18 points foster uncertainty. Ashley said they come into play after counties already know how much a company will charge.

The 18 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 and information from the Contractor Qualification Statement 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 bid saying it can complete the project at the lowest cost.

They 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 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 — though SBA staff said there would still be some way for school systems to buck the SBA’s recommendation in this area and still deny the bid.

A couple of points — like Point 16, saying a bidder must show it is not in default on debt to the state or one of its subdivisions — would be kept as pieces that could disqualify bids, Ashley said, but in a much less subjective manner than in the 18 points. They could knock the bid out before it’s even opened.

Ashley said a particularly problematic section of the 18 points is a caveat at the end of the list. The caveat says, “No single criteria will be considered the controlling factor in determining whether a bid is or is not the ‘best’ bid.”

“That really renders the application of this very subjective,” Ashley said. “And we believe it puts the county or someone receiving the bid in a very precarious situation where they could open themselves up for any kind of scrutiny.”

Steve Burton, retired president of the West Virginia State Building and Construction Trades Council union organization, was the only SBA board member to vote May 31 against putting the proposals out for public comment, which is the first step to approving them.

He suggested just removing the “no single criteria” line from the 18 points. Ashley said he’d have attorneys look into that possibility, but it’s unclear whether that’s happened.

Burton said, “I just think we’re on a slippery slope when we do not have qualifications and references.” He said upcoming Federal Emergency Management Agency-funded school building projects could be a “very big economic boon for construction workers and their families in this state. Anybody can come from Timbuktu and do that work and not give any qualifications or references.”

He also specifically protested the proposed elimination of Point 6, which considers “the bidder’s participation in a bonafide joint apprenticeship program” approved by the federal government.

In arguing the 18 points and Contractor Qualification Statement change is needed, SBA Executive Director David Roach’s May 29 letter references a 2015 case regarding renovations to the West Virginia Lottery building, in Charleston.

In the case, the state Supreme Court upheld Kanawha Circuit Court Judge Jennifer Bailey’s decision to award the Lottery renovations contract to the lowest bidder, Maynard C. Smith Construction Co.

Bailey’s decision overruled state employees’ earlier choice to throw out that 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.

Roach’s letter says the 18 points could allow for a contract award decision that is, as Bailey characterized the throwing out of the lowest Lottery bid, “based upon an ambiguous ‘requirement’ set forth in the bid documents that was of no consequence.” The letter also says attorneys from the West Virginia Attorney General’s Office cited the case in supporting the elimination of the Contractor Qualification Statement.

“We have no ground to hold that in court,” Roach told SBA board members May 31.

In response to questions about whether and why these attorneys were interpreting the case this way, Curtis Johnson, spokesman for the Attorney General’s Office, deferred comment to the SBA.

The state Supreme Court, while upholding the 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.

Ashley said the SBA will implement an evaluation system that will consider other current parts of the 18 points, like Point 5 (getting work done on schedule) and Point 17 (“the bidder’s history of change order requests”). Change order requests are companies’ requests for increased pay after a contract is awarded, often based on allegedly unforeseen circumstances or situations a company argues are out of its control.

Part of the evaluation of architecture/engineering firms would be whether they issue notices to construction companies that are out of compliance.

SBA staff said the evaluation form hasn’t yet been developed.

Steve White, director of the Affiliated Construction Trades union group, said that while SBA staff is saying these things will be considered in the evaluation, “they’ve deleted the current evaluation and there’s nothing but a promise.”

“I believe they will be coming up with a form,” White said. “But until we see it, I think it’s premature to eliminate it.”

He said, “The SBA has been a leader in developing, you know, a workable definition of that ‘lowest qualified responsible bidder,’ and we just hate to see them move to the back of the pack.”

In the evaluation system, Roach said all companies will start off on equal footing, unless the situation is “egregious.”

Ashley said having a “documented fashion that shows a pattern of implementing this procedure over the years, that could hold much more weight than this subjective evaluation criteria.”

The criteria considered in the evaluation system, instead of allowing for the up front rejection of bids, would allow the SBA board, after a project is done, to ban poor-performing or non-compliant companies and individuals from bidding on SBA projects for a certain amount of time. Current policy does include an evaluation process, but bans appear rare.

Regarding the proposed changes to the economies of scale guidelines, a sixth-eighth grade school, for example, would have to have at least 375 students total to be eligible for SBA funding without the county receiving an economies of scale waiver. The current minimum is 450 for that type of school.

The minimum, without the waiver, for a ninth-12th grade school would be 600, down from the current 800. Vocational education centers and spaces wouldn’t be subject to economies of scale guidelines.

Regarding the architecture/engineering companies’ maximum allowed fees, current policy says their fees on projects with construction costs under $3 million are to be “negotiated based on the scope of work.”

The proposed changes would mean that such open-ended negotiations would only be allowed for addition/renovation projects costing up to $300,000. Above that, the new maximum fee limitations would kick in.

The maximum fee would be 10 percent of the construction cost on $300,000-$750,000 projects and 9 percent on $750,000-$3 million projects.

Current policy has similar intervals for $3 million-and-above projects, with the maximum fee decreasing as the construction costs increase. At $20 million, the open-ended fee negotiation again kicks in, with no maximum set.

You can read the proposals, in which words proposed to be added are underlined and those proposed to be deleted are lined-through, by going to sos.wv.gov and hovering your cursor over the “Administrative Law” tab at the top of the page and clicking “Proposed Rules” in the box that pops up. Then search for “School Building Authority” in the search bar.

Reach Ryan Quinn at

ryan.quinn@wvgazettemail.com, facebook.com/ryanedwinquinn, 304-348-1254

or follow @RyanEQuinn on Twitter.

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