House File 830 - Enrolled

PAG LIN

1	
1	HOUSE FILE 830	
1	2	
1	3	AN ACT	
1	4 RELATING TO THE CONSTRUCTION BIDDING PROCEDURES ACT BY	
1	5	MODIFYING PROCEDURES AND REQUIREMENTS FOR LETTING PUBLIC	
1	6	IMPROVEMENT CONTRACTS, AND MAKING CORRECTIONS.	
1	7	
1	8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1	9
1 10	Section 1.	Section 26.2, subsection 1, Code 2007, is
1 11 amended to read as follows:
1 12	1.	"Estimated total cost of a public improvement" or
1 13 "estimated total cost" means the estimated total cost to the
1 14 governmental entity to construct a public improvement,
1 15 including cost of labor, materials, equipment, and supplies,
1 16 but excluding the cost of architectural, landscape
  1 17 architectural, or engineering design services and inspection.
1 18	Sec. 2.	Section 26.2, subsection 4, Code 2007, is amended
1 19 to read as follows:
1 20	4.	"Repair or maintenance work" means the preservation of
1 21 a road, street, bridge, culvert building, storm sewer,
1 22 sanitary sewer, or other public facility or structure so that
1 23 it remains in sound or proper condition, including minor
1 24 replacements and additions as necessary to restore the public
1 25 facility or structure to its original condition with the same
1 26 design.
1 27	Sec. 3.	Section 26.3, subsections 1 and 2, Code 2007, are
1 28 amended to read as follows:
1 29	1.	If the estimated total cost of a public improvement
1 30 exceeds the competitive bid threshold of one hundred thousand
1 31 dollars, or the adjusted competitive bid threshold established
1 32 in section 314.1B, the governmental entity shall advertise for
1 33 sealed bids for the proposed public improvement by publishing
34 a notice to bidders as provided in section 362.3.	The notice
  1 35 to bidders shall be published at least once, not less than
  2  1 four and not more than forty=five days before the date for
  2  2 filing bids, in a newspaper published at least once weekly and
  2  3 having general circulation in the geographic area served by
  2  4 the governmental entity.	Additionally, the governmental
5 entity may publish a notice in a relevant contractor
2	6 organization publication and a relevant contractor plan room
2	7 service with statewide circulation, provided that a notice is
2	8 posted on a website sponsored by either a governmental entity
2	9 or a statewide association that represents the governmental
2 10 entity.	The notice to bidders shall be published more than
  2 11 twenty days but not more than forty=five days before the date
  2 12 for filing bids.
2 13	2.	A governmental entity shall have an engineer licensed
2 14 under chapter 542B, a landscape architect licensed under
  2 15 chapter 544B, or an architect registered under chapter 544A
2 16 prepare plans and specifications, and calculate the estimated
2 17 total cost of a proposed public improvement.
2 18	Sec. 4.	Section 26.4, Code 2007, is amended to read as
2 19 follows:
2 20	26.4	EXEMPTIONS FROM COMPETITIVE BIDS AND QUOTATIONS.
2 21	Architectural, landscape architectural, or engineering
2 22 design services procured for a public improvement are not
2 23 subject to sections 26.3 and 26.14.
2 24	Sec. 5.	Section 26.8, subsection 1, Code 2007, is amended
2 25 to read as follows:
2 26	1.	Each bidder shall accompany its bid with a bid security
2 27 as security that the successful bidder will enter into a
2 28 contract for the work bid upon and will furnish after the
2 29 award of contract a corporate surety bond, acceptable to the
2 30 governmental entity, for the faithful performance of the
2 31 contract, in an amount equal to one hundred percent of the
2 32 amount of the contract.	The bid security shall be in an
2 33 amount fixed by the governmental entity, and shall be in the
2 34 form of a cashier's check or certified check drawn on a
35 state=chartered or federally chartered bank, or a certified
1 share draft drawn on a state=chartered or federally chartered
3	2 credit union, or the governmental entity may provide for a
3	3 bidder's bond with corporate surety satisfactory to the

3	4 governmental entity.	The bid bidder's bond shall contain no
3	5 conditions except as provided in this section.
3	6	Sec. 6.	Section 26.10, unnumbered paragraph 1, Code 2007,
3	7 is amended to read as follows:
3	8	The date and time that each bid is received by the
  3  9 governmental entity, together with the name of the person
  3 10 receiving the bid, shall be recorded on the envelope
  3 11 containing the bid.  All bids received after the deadlines for
  3 12 submission of bids as stated in the project specifications
  3 13 shall not be considered and shall be returned to the late
  3 14 bidder unopened.	The governmental entity shall open, announce
3 15 the amount of the bids, and file all proposals received, at
3 16 the time and place specified in the notice to bidders.	The
3 17 governmental entity may, by resolution, award the contract for
3 18 the public improvement to the bidder submitting the lowest
3 19 responsive, responsible bid, determined as provided in section
3 20 26.9, or the governmental entity may reject all bids received,
3 21 fix a new date for receiving bids, and order publication of a
3 22 new notice to bidders.	The governmental entity shall retain
3 23 the bid security furnished by the successful bidder until the
3 24 approved contract form has been executed, and a bond has been
3 25 filed by the bidder guaranteeing the performance of the
3 26 contract, and the contract and bond, have been approved by the
3 27 governmental entity.	The provisions of chapter 573, where
3 28 applicable, apply to contracts awarded under this chapter.
3 29	Sec. 7.	Section 26.11, Code 2007, is amended to read as
3 30 follows:
3 31	26.11	DELEGATION OF AUTHORITY.
3 32	When bids are required for any public improvement, the
3 33 governmental entity may delegate, by motion, resolution, or
3 34 policy to the city manager, clerk, engineer, or other public
35 officer, as applicable, the duty of receiving and opening bids
1 and announcing the results.	The officer shall report the
4	2 results of the bidding with the officer's recommendations to
4	3 the next regular meeting of the governmental entity's
4	4 governing body or at a special meeting called for that
  4  5 purpose.
4	6	Sec. 8.	Section 26.13, subsection 3, Code 2007, is amended
4	7 to read as follows:
4	8	3.	If labor and materials are yet to be provided at the
4	9 time of the request for the release of the retained funds
4 10 labor or materials are yet to be provided is made, an amount
4 11 equal to two hundred percent of the value of the labor or
4 12 materials yet to be provided, as determined by the
4 13 governmental entity's or the department's authorized contract
4 14 representative, may be withheld until such labor or materials
4 15 are provided.	For purposes of this section, "authorized
4 16 contract representative" means the person chosen by the
4 17 governmental entity or the department to represent its
4 18 interests or the person designated in the contract as the
4 19 party representing the governmental entity's or the
4 20 department's interest regarding administration and oversight
4 21 of the project.
4 22	Sec. 9.	Section 26.14, Code 2007, is amended to read as
4 23 follows:
4 24	26.14	COMPETITIVE QUOTATIONS FOR PUBLIC IMPROVEMENT
4 25 CONTRACTS.
4 26	1.	Competitive quotations shall be required for a public
4 27 improvement having an estimated total cost that exceeds the
4 28 applicable threshold amount provided in this section, but is
4 29 less than the competitive bid threshold established in section 4 30 26.3.
4 31	2.	Unless the threshold amount is amounts are adjusted
4 32 pursuant to section 314.1B, the competitive quotation
4 33 following threshold amounts shall be as follows apply:
4 34	a.	Sixty=seven thousand dollars for a county, including a
35 county hospital.
1	b.	Fifty=one thousand dollars for a city having a
5	2 population of fifty thousand or more.
5	3	c.	Fifty=one thousand dollars for a school district having
5	4 a population of fifty thousand or more.
5	5	d.	Fifty=one thousand dollars for an aviation authority
5	6 created within a city having a population of fifty thousand or
5	7 more.
5	8	e.	Thirty=six thousand dollars for a city having a
5	9 population of less than fifty thousand, for a school district
5 10 having a population of less than fifty thousand, and for any
5 11 other governmental entity.
5 12	f.	The threshold amount applied to a city applies to a
5 13 city hospital.
5 14	3.	a.	When a competitive quotation is required, the

5 15 governmental entity shall make a good faith effort to obtain
5 16 quotations for the work from at least two contractors
5 17 regularly engaged in such work prior to letting a contract.
5 18 Good faith effort shall include advising all contractors who
  5 19 have filed with the governmental entity a request for notice
  5 20 of projects.  The governmental entity shall provide such
  5 21 notice in a timely manner so that a requesting contractor will
  5 22 have a reasonable opportunity to submit a competitive
  5 23 quotation.	Quotations may be obtained from contractors after
5 24 the governmental entity provides a description of the work to
5 25 be performed, including the plans and specifications prepared
5 26 by an architect, landscape architect, or engineer, if required
5 27 under chapter 542B, 544B, or 544A, and an opportunity to
5 28 inspect the work site.	The contractor shall include in the
5 29 quotation the price for labor, materials, equipment, and
5 30 supplies required to perform the work.	If the work can be
5 31 performed by an employee or employees of the governmental
5 32 entity, the governmental entity may file a quotation for the
33 work to be performed in the same manner as a contractor.	If
  5 34 the governmental entity receives no quotations after making a
  5 35 good faith effort to obtain quotations from at least two
  6  1 contractors regularly engaged in such work, the governmental
  6  2 entity may negotiate a contract with a contractor regularly
  6  3 engaged in such work.
4	b.	The governmental entity shall designate the time,
6	5 place, and manner for filing quotations, which may be received
6	6 by mail, facsimile, or electronic mail.	The governmental
  6  7 entity shall award the contract to the contractor submitting
  6  8 the lowest responsive, responsible quotation subject to
  6  9 section 26.9, or the governmental entity may reject all of the
  6 10 quotations.  The unconditional acceptance and approval of the
  6 11 lowest responsive, responsible quotation shall constitute the
  6 12 award of a contract.	The governmental entity shall record the
6 13 approved quotation in its meeting minutes.	Quotations The
  6 14 contractor awarded the contract shall not commence work until
  6 15 the contractor's performance and payment bond has been
  6 16 approved by the governmental entity.  A governmental entity
  6 17 may delegate the authority to award a contract, to execute a
  6 18 contract, to authorize work to proceed under a contract, or to
  6 19 approve the contractor's performance and payment bond to an
  6 20 officer or employee of the governmental entity.  A quotation
6 21 approved outside a meeting of the governing body of a
6 22 governmental entity shall be included in the minutes of the
6 23 next regular or special meeting of the governing body.	The
  6 24 governmental entity shall award the contract to the contractor
  6 25 submitting the lowest responsive, responsible quotation
  6 26 subject to section 26.9, or the governmental entity may reject
  6 27 all of the quotations.
6 28	c.	If a public improvement may be performed by an employee
6 29 of the governmental entity, the amount of estimated sales and
6 30 fuel tax and the premium cost for the performance and payment
  6 31 bond which a contractor identifies in its quotation shall be
6 32 deducted from the contractor's price for determining the
6 33 lowest responsible bidder quotation.	If no quotations are
6 34 received to perform the work, or if the governmental entity's
35 estimated cost to do the work with its employee is less than
1 the lowest responsive, responsible quotation received, the
7	2 governmental entity may authorize its employee or employees to
7	3 perform the work.
7	4	Sec. 10.	NEW SECTION.	26.14A	ALTERNATIVE PROCEDURES.
7	5	1.	When competitive quotations are required under section
7	6 26.14 for a public improvement, the governmental entity may
7	7 proceed, in lieu of competitive quotations, as if the
7	8 estimated total cost of the public improvement exceeds the
7	9 competitive bid threshold under section 26.3.
7 10	2.	If the total estimated cost of the public improvement
7 11 does not warrant either competitive quotations under section
7 12 26.14 or competitive bidding under section 26.3, the
7 13 governmental entity may nevertheless proceed with competitive
7 14 quotations or competitive bidding for the public improvement.
7 15	Sec. 11.	Section 314.1B, subsection 2, paragraphs b and d,
7 16 Code 2007, are amended to read as follows:
7 17	b.	The subcommittee appointed under this subsection shall
7 18 review the competitive bid thresholds applicable to
7 19 governmental entities under chapter 26.	The subcommittee
7 20 shall review price adjustments for all types of construction,
7 21 reconstruction, and public improvement projects based on the
7 22 changes in the construction price index, building cost index,
7 23 and material cost index from the preceding year adjustment.
7 24 Upon completion of the review the subcommittee may make
7 25 adjustments in the applicable bid thresholds for types of work

7 26 based on the price adjustments.
7 27	d.	Beginning July 1, 2006, the subcommittee shall make
7 28 adjustments to the competitive quotation threshold amounts in
7 29 section 26.14 for vertical infrastructure in accordance with
7 30 adjustments made by the horizontal infrastructure subcommittee
  7 31 under subsection 1 applicable to city and county highway,
  7 32 bridge, and culvert projects the methodology of paragraph "b".
7 33	Sec. 12.	Section 314.1B, subsection 2, Code 2007, is
7 34 amended by adding the following new paragraph:
35	NEW PARAGRAPH.	e.	After 2012, the subcommittee shall
1 adjust the competitive quotation threshold amounts in section
8	2 26.14 at the same time and by the same percentage as
8	3 adjustments are made to the competitive bid threshold.
8	4	Sec. 13.	Section 331.341, subsection 1, Code 2007, is
8	5 amended to read as follows:
8	6	1.	When the estimated total cost of a public improvement,
8	7 other than improvements which may be paid for from the
8	8 secondary road fund, exceeds the competitive bid threshold in
8	9 section 26.3, or as established in section 314.1B, the board
8 10 shall follow the competitive bid procedures for governmental
8 11 entities in chapter 26 and the contract letting procedures in
  8 12 section 384.103.	As used in this section, "public
8 13 improvement" means the same as defined in section 26.2 as
8 14 modified by this subsection.
8 15	Sec. 14.	Section 380.4, unnumbered paragraph 1, Code 2007,
8 16 is amended to read as follows:
8 17	Passage of an ordinance, amendment, or resolution requires
8 18 a majority vote of all of the members of the council, except
8 19 when the mayor may vote to break a tie vote in a city with an
8 20 even number of council members, as provided in section 372.4.
8 21 Passage of a motion requires a majority vote of a quorum of
8 22 the council.	A resolution must be passed to spend public
8 23 funds in excess of twenty=five one hundred thousand dollars on
8 24 any one a public improvement project, or to accept public
8 25 improvements and facilities upon their completion.	Each
8 26 council member's vote on a measure must be recorded.	A
8 27 measure which fails to receive sufficient votes for passage
8 28 shall be considered defeated.
8 29	Sec. 15.	Section 384.20, unnumbered paragraph 3, Code
8 30 2007, is amended to read as follows:
8 31	"Continuing appropriation" means the unexpended portion of
8 32 the cost of public improvements, as defined in section 26.3
8 33 26.2, which cost was adopted through a public hearing pursuant
8 34 to section 26.12 and was included in an adopted or amended
35 budget of a city.	A continuing appropriation does not expire
1 at the conclusion of a fiscal year.	A continuing
9	2 appropriation continues until the public improvement is
9	3 completed, but expenditures under the continuing appropriation
9	4 shall not exceed the resources available for paying for the
9	5 public improvement.
9	6	Sec. 16.	Section 384.23, Code 2007, is amended to read as
9	7 follows:
9	8	384.23	CONSTRUCTION OF WORDS "AND" AND "OR."
9	As used in divisions III to VI V of this chapter, the use
9 10 of the conjunctive "and" includes the disjunctive "or" and the
9 11 use of the disjunctive "or" includes the conjunctive "and,"
9 12 unless the context clearly indicates otherwise.
9 13	Sec. 17.	Section 384.37, subsection 17, Code 2007, is
9 14 amended to read as follows:
9 15	17.	"Proposal" means a legal bid on work advertised for a
9 16 public improvement under division VI of this chapter 26.
9 17	Sec. 18.	Section 384.53, Code 2007, is amended to read as
9 18 follows:
9 19	384.53	PROCEDURES TO LET CONTRACT.
9 20	Contract letting procedures shall be as provided in
9 21 division VI of this chapter 26.	The council may award any
9 22 number of contracts for construction of any public
9 23 improvement.
9 24	Sec. 19.	Section 386.6, subsection 6, Code 2007, is
9 25 amended to read as follows:
9 26	6.	If the council orders the construction of the
9 27 improvement, it shall proceed to let contracts therefor in
9 28 accordance with chapter 384, division VI 26.
9 29	Sec. 20.	Section 386.7, subsection 3, Code 2007, is
9 30 amended to read as follows:
9 31	3.	If the council orders the construction of the
9 32 self=liquidating improvement, contracts for it shall be let in
9 33 accordance with division VI of chapter 384 26.
9 34
9 35
1

10	
2	
PATRICK J. MURPHY	
10	3	Speaker of the House	
10	4		
10	5		
10	6		
10	7	JOHN P. KIBBIE	
10	8	President of the Senate	
10	9		
10 10	I hereby certify that this bill originated in the House and
10 11 is known as House File 830, Eighty=second General Assembly. 10 12
10 13
10 14
10 15	MARK BRANDSGARD
10 16	Chief Clerk of the House
10 17 Approved	, 2007
10 18
10 19
10 20  	
10 21 CHESTER J. CULVER
10 22 Governor