Procurement in Facility Work
Balancing urgency to fulfill a critical construction or renovation need with due diligence under the law
BY RICHARD L. GAY/School Administrator, October 2022
|Richard Gay, shown in the school district’s warehouse, directs procurement services in Houston’s Spring Branch Independent School District. PHOTO COURTESY OF SPRING BRANCH INDEPENDENT SCHOOL DISTRICT
School districts nationwide spend billions of dollars annually building and renovating K-12 public school facilities. Since 2019, there has been approximately $10.4 billion in voter-approved funding in Texas alone for constructing or rebuilding public schools.
In a recent GAO national survey of the more than 15,000 school districts across the country, the most common school facilities issues and priorities were improving security, expanding technology and addressing health hazards. About half of communities needed to update or replace multiple building systems or features in their schools such as ventilation, heating and air conditioning, or plumbing.
In almost all cases, without exception, public schools are required by law to procure their construction projects through a public solicitation process. Because school construction has both long lead times and a need to fulfill a critical want, there tends to be a sense of urgency to get the job done as quickly as possible. This sense of urgency can lead to expensive missteps that cost more money than anticipated, delay the project or even lead to a construction failure.
Pitfalls to Circumvent
Over a long career in school construction procurement, I have encountered missteps made during school facility projects that district leaders should be on the lookout for.
First, never be in a hurry to get a project underway. School construction is a highly methodical and legal process that requires each step to be followed in order. For example, after obtaining final drawings and construction documents, the initial step should be to publicly advertise the project for a certain period. Failure to do so can bring your project to a grinding halt through a court injunction if other con-tractors suddenly become aware of the project and contend they were never told about it.
You cannot avoid conducting a competitive procurement process. The expenditure of public funds, such as from a bond election, is public business, and everyone in the community and surrounding area is aware of the availability of these funds. Your general contractor population knows how much you must spend and what the specific projects are. They will be scouring the public notices about when you will be soliciting bids/proposals for your building projects.
While issuing a solicitation for a general contractor for any major construction project, it is important to secure them according to local laws, policies and procedures, especially if you are using federal funds. I’ve seen several instances where contracts were bid, approved by a school board and got underway without ever being publicly advertised. It leads to a very public and awkward moment when the in-junction shows up at your front door and ultimately delays or affects the project’s successful outcome.
Another common misstep is allowing a general contractor to develop the bid specifications and then allowing them to participate in the bidding process. Never let a general contractor write your specifications. It gives that general contractor an inside track and an unfair advantage over other contractors and brings the integrity of your procurement process and your personal ethics into question.
This is not the same as working with a construction manager at risk, where you solicit a general contractor early in the project timeline to work with your architect and engineers to prevent costly mistakes and perform value engineering. On every solicitation I oversee, I insist on following what I call the “FIT” rule, that is the solicitation must be fair, inclusive and transparent.
When bidding on construction projects, many jurisdictions must award the contract solely on the lowest bid from a responsive, responsible bidder. This can be another misstep. If you don’t clearly understand the project’s parameters and what it will take to succeed, you may fall victim to a “low ball” bid from an unqualified contractor. Your project can be plagued with change orders and cost more than you had anticipated.
If there is flexibility in how you award your project, such as allowing for “best value,” it is always a good practice to consider additional criteria in the evaluation of your contractor decision other than price. Considering price alone without other factors such as your district’s needs and goals for the project can prevent quality construction procurements. Making quality or other evaluation factors such as contractor experience an integral part of your construction procurement decision will enable you to get the best return on investment for your district and your constituents.
Earlier, I mentioned the construction manager at risk as one of the construction procurement methods available to most school districts. A good general contractor is not always easy to come by. A great general contractor can become a strategic partner during an ex-tended bond or capital improvement program.
Bringing your general contractor in early in the process will allow you to capitalize on their experience and take advantage of better and cheaper ways of achieving your construction procurement goals. Not inviting them to make suggestions that will lead to a better procurement and construction process can result in costly delays in the project, which can disappoint your constituents who are eagerly awaiting the outcome of your construction building or renovation program.
A Joint Enterprise
Any working relationship must be managed as a true partnership if you are going to be successful. However, because we operate in the public sphere, ethics rules must be adhered to in this relationship. Failure to do so could lead to civil and criminal repercussions.
First and foremost, you must keep your working relationship above reproach and at arm’s length. There are countless stories in districts where personnel accepted “gifts” from the general contractor, knowing if they did this, the contractor would be awarded the solicitation. The integrity of your procurement process can never be in question or you will lose any good faith you may have among your constituents and your community. If that happens, you will never have another successful bond election.
In smaller school districts, many responsibilities rest on one person who may not be equipped to carry them out appropriately. Therefore, it is necessary to have a carefully laid out, transparent procurement plan that allows the district to keep things moving. However, we are often tempted to move at a faster pace than the plan calls for because we want to show the public we’re making progress with the public funds
they have entrusted with us. This can cause you to miss a step, or it could create a whole new set of problems. Also: Never undertake a project not referenced in the plan in the voter-approved bond program.
I know of one case where the school district did not have a capital improvement program director or a specific department to manage the various projects. The specific department head usually managed these projects in conjunction with the procurement department. This failure was a sure mistake waiting to happen. Without the right personnel, such as a construction project manager who could oversee the construction of a new building, a renovation project emerged, something not initially planned as part of the capital improvement program. It became one of the first projects the district pursued.
The project was assigned to the procurement and maintenance departments to manage. Plans were developed, funding sources identified and a general contractor was recommended to the governing body for the award.
It wasn’t until the agenda review by the attorneys that it was discovered that the renovation delivery method under the current state statute had to be determined and approved by the governing body first. How did they get that far without realizing this requirement? This happens when a project organically grows to be something more complex than initially thought.
After identifying such a glaring error, the procurement department director had to dive into the construction statute for procurement with the attorneys to develop straightforward procedures, instructions and checklists for each delivery method to ensure they never missed a step in the future.
An Open Eye
As a superintendent, construction manager or procurement officer, you must be aware of these missteps and keep an eye out for them. This will enable you to put processes and procedures in place to avoid them or to learn from mistakes and fix them promptly.
is director of procurement services at Spring Branch Independent School District in Houston, Texas.