House File 321 - Introduced HOUSE FILE BY HUTTER Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act changing the bid threshold requirement for certain public 2 improvement contracts. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2004HH 81 5 eg/cf/24 PAG LIN 1 1 Section 1. Section 8A.311, subsection 9, paragraph a, Code 1 2 2005, is amended to read as follows: 1 3 a. When the estimated total cost of construction, 1 4 erection, demolition, alteration, or repair of a public 1 5 improvement exceedstwenty=fivefifty thousand dollars, the 1 6 department shall solicit bids on the proposed improvement by 1 7 publishing an advertisement in a print format. The 1 8 advertisement shall appear in two publications in a newspaper 1 9 published in the county in which the work is to be done. The 1 10 first advertisement for bids appearing in a newspaper shall be 1 11 not less than fifteen days prior to the date set for receiving 1 12 bids. The department may publish an advertisement in an 1 13 electronic format as an additional method of soliciting bids 1 14 under this paragraph. 1 15 Sec. 2. Section 8A.311, subsection 16, Code 2005, is 1 16 amended to read as follows: 1 17 16. The department shall not award a contract to a bidder 1 18 for a construction, reconstruction, demolition, or repair 1 19 project or improvement with an estimated cost that exceeds 1 20twenty=fivefifty thousand dollars in which the bid requires 1 21 the use of inmate labor supplied by the department of 1 22 corrections, but not employed by private industry pursuant to 1 23 section 904.809, to perform the project or improvement. 1 24 Sec. 3. Section 35A.10, subsection 2, Code 2005, is 1 25 amended to read as follows: 1 26 2. The commandant and the commission shall have plans and 1 27 specifications prepared by the department of administrative 1 28 services for authorized construction, repair, or improvement 1 29 projects in excess oftwenty=fivefifty thousand dollars. An 1 30 appropriation for a project shall not be expended until the 1 31 department of administrative services has adopted plans and 1 32 specifications and has completed a detailed estimate of the 1 33 cost of the project, prepared under the supervision of a 1 34 registered architect or registered professional engineer. 1 35 Sec. 4. Section 35A.10, subsection 3, Code 2005, is 2 1 amended to read as follows: 2 2 3. The director of the department of administrative 2 3 services shall, in writing, let all contracts for authorized 2 4 improvements in excess oftwenty=fivefifty thousand dollars 2 5 in accordance with chapter 8A, subchapter III. The director 2 6 of the department of administrative services shall not 2 7 authorize payment for construction purposes until satisfactory 2 8 proof has been furnished by the proper officer or supervising 2 9 architect that the parties have complied with the contract. 2 10 Sec. 5. Section 73A.2, Code 2005, is amended to read as 2 11 follows: 2 12 73A.2 NOTICE OF HEARING. 2 13 Before any municipality shall enter into any contract for 2 14 any public improvement to costtwenty=fivefifty thousand 2 15 dollars or more, the governing body proposing to make the 2 16 contract shall adopt proposed plans and specifications and 2 17 proposed form of contract, fix a time and place for hearing at 2 18 the municipality affected or other nearby convenient place, 2 19 and give notice by publication in at least one newspaper of 2 20 general circulation in the municipality at least ten days 2 21 before the hearing. 2 22 Sec. 6. Section 73A.18, Code 2005, is amended to read as 2 23 follows: 2 24 73A.18 WHEN BIDS REQUIRED == ADVERTISEMENT == DEPOSIT. 2 25 When the estimated total cost of construction, erection, 2 26 demolition, alteration or repair of a public improvement 2 27 exceedstwenty=fivefifty thousand dollars, the municipality 2 28 shall advertise for bids on the proposed improvement by two 2 29 publications in a newspaper published in the county in which 2 30 the work is to be done. The first advertisement for bids 2 31 shall be not less than fifteen days prior to the date set for 2 32 receiving bids. The municipality shall let the work to the 2 33 lowest responsible bidder submitting a sealed proposal. 2 34 However, if in the judgment of the municipality bids received 2 35 are not acceptable, all bids may be rejected and new bids 3 1 requested. A bid shall be accompanied, in a separate 3 2 envelope, by a deposit of money or a certified check or credit 3 3 union certified share draft in an amount to be named in the 3 4 advertisement for bids as security that the bidder will enter 3 5 into a contract for the doing of the work. The municipality 3 6 shall fix the bid security in an amount equal to at least five 3 7 percent, but not more than ten percent of the estimated total 3 8 cost of the work. The checks, share drafts or deposits of 3 9 money of the unsuccessful bidders shall be returned as soon as 3 10 the successful bidder is determined, and the check, share 3 11 draft or deposit of money of the successful bidder shall be 3 12 returned upon execution of the contract documents. This 3 13 section does not apply to the construction, erection, 3 14 demolition, alteration or repair of a public improvement when 3 15 the contracting procedure for the doing of the work is 3 16 provided for in another provision of law. 3 17 Sec. 7. Section 161C.2, subsection 1, paragraph b, Code 3 18 2005, is amended to read as follows: 3 19 b. Any work project with an estimated cost oftwenty=five3 20 fifty thousand dollars or more shall be undertaken as a public 3 21 contract as provided in chapters 73A and 573. The local 3 22 contracting organization shall designate a contracting officer 3 23 and shall establish procedures to manage the contract, approve 3 24 bills for payment, and review proposed change orders or 3 25 amendments to the contract. 3 26 Sec. 8. Section 218.58, subsections 2 and 4, Code 2005, 3 27 are amended to read as follows: 3 28 2. The director shall have plans and specifications 3 29 prepared by the department of administrative services for 3 30 authorized construction, repair, or improvement projects 3 31 costing overtwenty=fivefifty thousand dollars. An 3 32 appropriation for a project shall not be expended until the 3 33 department of administrative services has adopted plans and 3 34 specifications and has completed a detailed estimate of the 3 35 cost of the project, prepared under the supervision of a 4 1 registered architect or registered professional engineer. 4 2 Plans and specifications shall not be adopted and a project 4 3 shall not proceed if the project would require an expenditure 4 4 of money in excess of the appropriation. 4 5 4. If the director of the department of human services and 4 6 the director of the department of administrative services 4 7 determine that emergency repairs or improvements estimated to 4 8 cost more thantwenty=fivefifty thousand dollars are 4 9 necessary to assure the continued operation of a departmental 4 10 institution, the requirements of subsections 2 and 3 for 4 11 preparation of plans and specifications and competitive 4 12 procurement procedures are waived. A determination of 4 13 necessity for waiver by the director of the department of 4 14 human services and the director of the department of 4 15 administrative services shall be in writing and shall be 4 16 entered in the project record for emergency repairs or 4 17 improvements. Emergency repairs or improvements shall be 4 18 accomplished using plans and specifications and competitive 4 19 procurement procedures to the greatest extent possible, 4 20 considering the necessity for rapid completion of the project. 4 21 A waiver of the requirements of subsections 2 and 3 does not 4 22 authorize an expenditure in excess of an amount otherwise 4 23 authorized for the repair or improvement. 4 24 Sec. 9. Section 262.34, unnumbered paragraph 1, Code 2005, 4 25 is amended to read as follows: 4 26 When the estimated cost of construction, repairs, or 4 27 improvement of buildings or grounds under charge of the state 4 28 board of regents exceedstwenty=fivefifty thousand dollars, 4 29 the board shall advertise for bids for the contemplated 4 30 improvement or construction and shall let the work to the 4 31 lowest responsible bidder. However, if in the judgment of the 4 32 board bids received are not acceptable, the board may reject 4 33 all bids and proceed with the construction, repair, or 4 34 improvement by a method as the board may determine. All plans 4 35 and specifications for repairs or construction, together with 5 1 bids on the plans or specifications, shall be filed by the 5 2 board and be open for public inspection. All bids submitted 5 3 under this section shall be accompanied by a deposit of money, 5 4 a certified check or a credit union certified share draft in 5 5 an amount as the board may prescribe. 5 6 Sec. 10. Section 297.8, Code 2005, is amended to read as 5 7 follows: 5 8 297.8 EMERGENCY REPAIRS. 5 9 When emergency repairs costing more thantwenty=fivefifty 5 10 thousand dollars are necessary in order to prevent the closing 5 11 of any school, the provisions of the law with reference to 5 12 advertising for bids shall not apply, and in that event the 5 13 board may contract for such emergency repairs without 5 14 advertising for bids. However, before such emergency repairs 5 15 can be made to any schoolhouse, it shall be necessary to 5 16 procure a certificate from the area education agency 5 17 administrator that such emergency repairs are necessary to 5 18 prevent the closing of the school. 5 19 Sec. 11. Section 330A.12, Code 2005, is amended to read as 5 20 follows: 5 21 330A.12 AWARD OF CONTRACT. 5 22 All contracts entered into by an authority for the 5 23 construction, reconstruction, and improvement of aviation 5 24 facilities shall be entered into pursuant to and shall comply 5 25 with chapter 73A. However, where an authority determines an 5 26 emergency exists, it may enter into contracts obligating the 5 27 authority for not in excess oftwenty=fivefifty thousand 5 28 dollars per emergency without regard to the requirements of 5 29 chapter 73A and the authority may proceed with the necessary 5 30 action as expeditiously as possible to the extent necessary to 5 31 resolve such emergency. 5 32 Sec. 12. Section 380.4, unnumbered paragraph 1, Code 2005, 5 33 is amended to read as follows: 5 34 Passage of an ordinance, amendment, or resolution requires 5 35 a majority vote of all of the members of the council, except 6 1 when the mayor may vote to break a tie vote in a city with an 6 2 even number of council members, as provided in section 372.4. 6 3 Passage of a motion requires a majority vote of a quorum of 6 4 the council. A resolution must be passed to spend public 6 5 funds in excess oftwenty=fivefifty thousand dollars on any 6 6 one project, or to accept public improvements and facilities 6 7 upon their completion. Each council member's vote on a 6 8 measure must be recorded. A measure which fails to receive 6 9 sufficient votes for passage shall be considered defeated. 6 10 Sec. 13. Section 384.96, Code 2005, is amended to read as 6 11 follows: 6 12 384.96 SEALED BIDS. 6 13 When the estimated total cost to a city of a public 6 14 improvement exceeds the sum oftwenty=fivefifty thousand 6 15 dollars, the governing body shall advertise for sealed bids 6 16 for the proposed improvement by publishing a notice to bidders 6 17 as provided in section 362.3, except that the notice to 6 18 bidders may be published more than twenty days but not more 6 19 than forty=five days before the date for filing bids. 6 20 Sec. 14. Section 384.102, Code 2005, is amended to read as 6 21 follows: 6 22 384.102 WHEN HEARING NECESSARY. 6 23 When the estimated total cost of a public improvement 6 24 exceeds the sum oftwenty=fivefifty thousand dollars, the 6 25 governing body shall not enter into a contract for the 6 26 improvement until it has held a public hearing on the proposed 6 27 plans, specifications, and form of contract, and estimated 6 28 cost for the improvement. Notice of the hearing must be 6 29 published as provided in section 362.3. At the hearing any 6 30 interested person may appear and file objections to the 6 31 proposed plans, specifications, contract, or estimated cost of 6 32 the improvement. After hearing objections, the governing body 6 33 shall by resolution enter its decision on the plans, 6 34 specifications, contract, and estimated cost. 6 35 Sec. 15. Section 573.2, unnumbered paragraph 1, Code 2005, 7 1 is amended to read as follows: 7 2 Contracts for the construction of a public improvement 7 3 shall, when the contract price equals or exceedstwenty=five7 4 fifty thousand dollars, be accompanied by a bond, with surety, 7 5 conditioned for the faithful performance of the contract, and 7 6 for the fulfillment of other requirements as provided by law. 7 7 The bond may also be required when the contract price does not 7 8 equal that amount. However, if a contractor provides a 7 9 performance or maintenance bond as required by a public 7 10 improvement contract governed by this chapter and subsequently 7 11 the surety company becomes insolvent and the contractor is 7 12 required to purchase a new bond, the contractor may apply for 7 13 reimbursement from the governmental agency that required a 7 14 second bond and the claims shall be reimbursed from funds 7 15 allocated for road construction purposes. 7 16 Sec. 16. Section 904.314, unnumbered paragraph 1, Code 7 17 2005, is amended to read as follows: 7 18 The director shall cause plans and specifications to be 7 19 prepared by the department of administrative services for all 7 20 improvements authorized and costing overtwenty=fivefifty 7 21 thousand dollars. An appropriation for any improvement 7 22 costing overtwenty=fivefifty thousand dollars shall not be 7 23 expended until the adoption of suitable plans and 7 24 specifications, prepared by a competent architect and 7 25 accompanied by a detailed statement of the amount, quality, 7 26 and description of all material and labor required for the 7 27 completion of the improvement. 7 28 Sec. 17. Section 904.315, Code 2005, is amended to read as 7 29 follows: 7 30 904.315 CONTRACTS FOR IMPROVEMENTS. 7 31 The director of the department of administrative services 7 32 shall, in writing, let all contracts for authorized 7 33 improvements costing in excess oftwenty=fivefifty thousand 7 34 dollars under chapter 8A, subchapter III. Upon prior 7 35 authorization by the director, improvements costing five 8 1 thousand dollars or less may be made by the superintendent of 8 2 any institution. 8 3 A contract is not required for improvements at a state 8 4 institution where the labor of inmates is to be used if the 8 5 contract is not for a construction, reconstruction, 8 6 demolition, or repair project or improvement with an estimated 8 7 cost in excess oftwenty=fivefifty thousand dollars. 8 8 EXPLANATION 8 9 This bill changes the bid threshold requirement for 8 10 advertising for bids for a contract for a public improvement 8 11 from a cost of $25,000 to a minimum cost of $50,000. This 8 12 increase in the threshold applies to contracts entered into by 8 13 the state department of administrative services; the 8 14 department of human services; the veterans affairs commission; 8 15 municipalities, including townships; school corporations; the 8 16 state fair board; the state board of regents; soil and water 8 17 conservation districts; aviation authorities; counties; 8 18 cities; and the state department of corrections. The bill 8 19 applies the threshold amount requirement to the bond 8 20 requirement for construction of public improvements by the 8 21 state and major political subdivisions pursuant to Code 8 22 section 573.2. 8 23 LSB 2004HH 81 8 24 eg:rj/cf/24