1. Utah K-12 Public School Construction Education and Training Wednesday, May 4, 2011 Utah Cultural Celebration Center, West Valley City, Utah

2. INTEGRITY IN PROCUREMENT Session 4 (1:00 –2:00 pm.)

3. Competition in Procurement The ultimate justification for the existence of all competition is to protect the consumer or owner. Competition is the basis for nearly all public procurement.

4. Antitrust Laws Help to Protect Competition Utah Code 76-10-912 identifies the purpose of antitrust laws: Competition is fundamental to the free market system …unrestrained interaction of competitive forces will yield the best allocation of…resources, the lowest prices…

5. Antitrust Laws Help to Protect Competition Utah Code 76-10-912 continued… … the highest quality…greatest material progress. The purpose of this act is…to encourage free and open trade… prohibiting monopolistic and unfair trade practices…

6. Defense Against Antitrust Violations Understanding market conditions for each procurement; Avoiding specifications that reduce competition; Remaining arms’-length from every vendor; Becoming informed about competition law and administrative rules.

7. Integrity in Procurement Integrity is an essential element of competitive procurement. For the procurement officer, it is legal and ethical conduct that counts.

8. Integrity in Procurement Ten procurement ethical conduct items: Follow the Rules Protect the Economy Take Nothing Strive for Efficiency Be Independent Source – NASPO – National Association of Procurement Officers

9. Integrity in Procurement Ethical conduct items continued… Do Not Play Favorites Act Only in the Public Interest Maintain Confidentiality Remain a Trustee of the Public Do not Socialize with Vendors Source – NASPO – National Association of Procurement Officers

10. School District and Charter School personnel and Board Members should not attend social events, such as; open houses, holiday gatherings, sporting events, etc., sponsored by architectural firms, engineering firms, or construction firms. Socializing with Architects, Engineers and Contractors

11. Contractors being allowed a period of time after bids are opened to verify bid numbers, who continue to search for better pricing from subcontractors are bid shopping, which is not allowed. Bid Shopping

12. Do not allow special access to an individual firm, for needs assessments, review of plans, site conditions, etc., without extending this to all potential offerors. All privileges must extended to all. Architects, Engineers and Contractors – Special Access

13. Selection Committee Members The school district or charter school must obtain a formal signed declaration of conflict of interest and confidentiality from each member of the selection committee prior to the evaluation process.

14. Competition in Procurement Architects often prefer to identify various components by brand name. School districts and charter schools should require architects and engineers to generate performance specifications for the required items rather than brand names.

15. School Construction Competitive Procurement: School construction must be procured competitively, even if there is an established relationship with an architect, engineer, contractor, developer, etc., from previous construction projects, master planning, etc.

16. A/E SOIQ Evaluation Selection Criteria Criteria shall be evaluated consistently… based upon a predetermined definition. Architect/Engineer selection committees have one member who is well qualified in the profession of architecture or engineering. Selection committees shall have the necessary expertise and skills to evaluate proposals. R33-5-540 Architect-Engineer Selection Committee.

17. Proposal Evaluations Predetermined definition of criteria helps maintain consistency among members of the selection committee.

18. A well written scope of work (SOW) includes: Verifiable performance and acceptance criteria; A description of the work to be performed; Post-award administrative guidance to the supplier. SOW - Scope of Work

19. A/E SOIQ Evaluation Selection Criteria DON’T - Stray from the criteria outlined in the SOIQ during the selection process. (R33-5-580 - All statements and supplemental statements of qualifications and performance data shall be evaluated in light of the criteria set forth in the request for SOI…)

20. A/E SOIQ Evaluation Selection Criteria Evaluation criteria be weighted to reflect the priority of the information asked for in... following the Division of Purchasing guidelines. R33-5-580 to 650. Evaluation criteria, including the criteria weighting shall be clearly stated in...SOIQs

21. The selection committee shall select…no fewer than three firms evaluated as being professionally and technically qualified unless fewer than three firms responded… R33-5-590 Selection of Firms for Discussion:

22. SOIQ PROCESS (Selection of Architect/ Engineers (Design Professionals)): FEE CANNOT BE PART OF SELECTION.

23. Negotiation & Award of Contract: R33-5-620 - The Procurement Officer shall negotiate a contract with the most qualified firm for the required services at compensation determined to be fair and reasonable to the State…

24. R33-5-620 - (a) making certain that the firm has a clear understanding of the scope of the work; (b) firm will make available the necessary personnel and facilities to perform the services within the required time Negotiation & Award of Contract continued…

25. R33-5-620 - (c) Agreeing upon compensation which is fair and reasonable, taking into account the estimated value, scope, complexity, and nature of the required services. Negotiation & Award of Contract continued…

26. R33-5-630 – (a) If fair and reasonable compensation, contract requirements, and contract documents cannot be agreed upon with the most qualified firm, the Procurement Officer shall advise the firm in writing of the termination of negotiations… Failure to Negotiation Contract with Most Qualified Firm:

27. R33-5-630 – continued… (b) Upon failure to negotiate a contract with the most qualified firm, the Procurement Officer shall enter into negotiations with the next most qualified firm… Failure to Negotiation Contract with Most Qualified Firm:

28. R33-5-630 – continued… If fair and reasonable compensation, contract requirements, and contract documents can be agreed upon, then the contract shall be awarded to that firm. Failure to Negotiation Contract with Most Qualified Firm:

29. R33-5-650 – Should the Procurement Officer be unable to negotiate a contract with any of the firms initially selected… …selected in preferential order based… negotiations shall continue…until an agreement is reached and the contract awarded. Failure to Negotiate Contract with Firms Initially Selected as Most Qualified:

30. Architect/Engineer Services SOIQ Criteria In the event that negotiations have moved down from the most qualified, going back up the line to negotiate again is not allowed.

31. Suspicious Bidding Practices Procurement officers are in a unique position to detect suspicious bidding practices. Examples suggesting collusion or suspicious aberrations in markets that school districts and charter schools should be aware of and avoid: Identical bids; Simultaneous price increases; Rotating territorial or product; bidding patterns that suggests a market allocation scheme.

32. Competition in Procurement Every governmental procurement practice must have these two co-equal objectives; (1) ensure consistent fairness, openness and impartiality of the process, and (2) seize the power of the free market to the best products/services and lowest prices.

33. Competition in Procurement Examples of practices that don’t promote competition and restrain trade: Using evaluation criteria not stated in the solicitation as the basis of award; Unnecessary sole source contracting; Long-term contracts lasting several years.

34. Procurement Best Practices Construction It is usually best to bid out each construction project separately via Low Bid, RFP Process, or Multi-Step Sealed Bidding. Bundling of construction projects should only be used for “similar” type projects.

35. Cost Proposals Cost proposals should be: Objectively evaluated by the selection committee/local procurement officer according to an established formula/ unique method developed for each project.

36. Procurement Best Practices for Architect/Engineer (A/E) Services Architect/Engineering selection should be conducted for A/E services on each project above the “small procurement” limit (63G-6-701). Rotation of firms having met criteria set forth, is acceptable if it does not result in long-term contracts and all firms are re- evaluated annually.

37. Oversight of Subcontractor's The Assistant Attorney General for Purchasing/DFCM cautions against over involvement in the Construction Manager’s or General Contractor’s selection of subcontractors: If you become so involved in the monitoring and approval of subcontractors, the Contractor can claim the owner made the selection of the Subcontractor and is therefore responsible for errors or faulty work committed by a subcontractor.

38. Oversight of Subcontractor's continued… You are allowed and wise to dictate the “method” would be the Construction Manager or General Contractor uses to select subcontractors: low bid, two stage selection, RFP, etc. Districts and charters should consult with their own legal counsel regarding this issue.

39. Continued… Interjection by school districts and charter schools, of disallowing subcontractors, should be based on documented unsatisfactory experience that can be substantiated to avoid taking on unnecessary liability. Oversight of Subcontractor's

40. Change Orders Caution: Change orders can tend to be rife with abuse and are only warranted where the change is within the original scope of work. A post-award design change that must be made to move a wall ten inches to avoid a power line is within a design scope of work. Adding to the scope of the original contract, because the contractor is on site, becomes sole source procurement without justification, thus should not be considered for a change order.

41. Offer/Bid Evaluation and Award: Award of bids shall be made to the responsive and responsible offeror/bidder who meets or exceeds the requirements and criteria set forth in the solicitation.

42. Responsive and Responsible Offers/Bidders: Responsive Offeror/Bidder: A offeror/bidder whose bid meets or exceeds administrative requirements, technical specifications, and contractual terms and conditions. Responsible Offeror/Bidder: Offeror/Bidder has the ability in all respects to successfully perform the contract requirements.

43. School districts and charter schools are not allowed to have design professionals nor contractors present to their boards in closed meetings to present processes, procedures, etc., of the firm or company. This is not considered protected. OPEN MEETINGS

44. School districts and charter schools are not allowed to have design professionals nor contractors present to their boards in closed meetings to present processes, procedures, etc., of the firm or company. This is not considered protected. OPEN MEETINGS

45. Very little of what is provided by design professionals and/or contractors throughout the construction project can be considered protected, generally it is limited to: Social Security Numbers, Home Addresses, Home Phone Numbers, Medical Information, PUBLIC INFORMATION To determine if any other information can be considered protected always confer with the district, charter or USOE legal counsel. Those in the private sector are not always schooled in the requirements related to the public sector.

46. Those doing business with public education can’t have both the satisfaction and convenience of a public presentation and the protection of their ideas, plans, processes. This is just the price of doing business in the public sector. ADVICE – OPEN MEETINGS LAW

47. GRAMA requests are being made, by Utah trade union representatives, for school construction projects using federal funds, that claim proposals requesting pricing both with and without Davis Bacon wages constitutes unfair trade practice. USOE, State Purchasing and the Attorney General’s Office disagree, and believe this would be considered an example of an acceptable alternate to the bid. FEDERALLY FUNDED PROJECTS GRAMA REQUESTS

48. Stipends to Provide Designs of Projects During SOIQ Process: School districts and charter schools should never take the ‘best ideas’ from each offeror’s proposal & have the successful offeror combine them into one plan. Those following these practices are opening themselves up to lawsuits.

49. DO NOT Require Offerors to Provide Designs For Projects During SOIQ Process: This may be considered as ‘jumping the gun’ or ‘getting the cart before the horse’ and may end up in a plan that proper programming was not carried out, and thus the best design may not have been developed.

50. DO NOT Require Offerors to Provide Designs For Projects During SOIQ Process: Firms presenting proposed designs before going through proper development and programming procedures should not be considered acceptable. Those who speculate before going through proper programming processes should be marked down.

51. Kent Beers Main Office Number 801.538.3026 Utah State Purchasing http://purchasing.utah.gov/ Jenefer Youngfield jenefer.youngfield@schools.utah.gov Office Phone 801.538.7669, Cell Phone 801.419.9482 School Finance Section - Facilities http://www.schools.utah.gov/finance/Facilities.aspx