Senate File 2360 - Introduced
SENATE FILE
BY COMMITTEE ON LOCAL GOVERNMENT
(SUCCESSOR TO SSB 3129)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the bid threshold requirements for public
2 improvement contracts.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 5672SV 81
5 eg/je/5
PAG LIN
1 1 Section 1. NEW SECTION. 38.1 CITATION.
1 2 This chapter shall be known and may be cited as the "Iowa
1 3 Construction Bidding Procedures Act".
1 4 Sec. 2. NEW SECTION. 38.2 DEFINITIONS.
1 5 As used in this chapter, unless the context clearly
1 6 indicates otherwise:
1 7 1. "Estimated total cost of a public improvement" or
1 8 "estimated total cost" means the estimated total cost to the
1 9 governmental entity to construct a public improvement,
1 10 including cost of labor, materials, equipment, and supplies,
1 11 but excluding the cost of architectural or engineering design
1 12 services and inspection.
1 13 2. "Governmental entity" means the state, political
1 14 subdivisions of the state, public school corporations, and all
1 15 officers, boards, or commissions empowered by law to enter
1 16 into contracts for the construction of public improvements,
1 17 excluding the state board of regents.
1 18 3. "Public improvement" means a building or structure
1 19 which is constructed under the control of a governmental
1 20 entity and is paid for in whole or in part with funds of the
1 21 governmental entity, including a building or improvement
1 22 constructed or operated jointly with any other public or
1 23 private agency, but excluding urban renewal demolition and
1 24 low=rent housing projects, industrial aid projects authorized
1 25 under chapter 419, emergency work or repair or maintenance
1 26 work performed by employees of a governmental entity, and
1 27 excluding a highway, bridge, or culvert project, and excluding
1 28 construction or repair or maintenance work performed for a
1 29 city utility under chapter 388 by its employees or performed
1 30 for a rural water district under chapter 357A by its
1 31 employees.
1 32 4. "Repair or maintenance work" means the preservation of
1 33 a road, street, bridge, culvert, storm sewer, sanitary sewer,
1 34 or other public facility so that it remains in sound or proper
1 35 condition, including minor replacements and additions as
2 1 necessary to restore the public facility to its original
2 2 condition with the same design.
2 3 Sec. 3. NEW SECTION. 38.3 COMPETITIVE BIDS FOR PUBLIC
2 4 IMPROVEMENT CONTRACTS.
2 5 1. If the estimated total cost of a public improvement
2 6 exceeds the competitive bid threshold of one hundred thousand
2 7 dollars, or the adjusted competitive bid threshold established
2 8 in section 314.1B, the governmental entity shall advertise for
2 9 sealed bids for the proposed public improvement by publishing
2 10 a notice to bidders as provided in section 362.3.
2 11 Alternatively, the governmental entity may publish a notice in
2 12 a relevant contractor organization publication and a relevant
2 13 contractor plan room service with statewide circulation,
2 14 provided that a notice is posted on a website sponsored by
2 15 either a governmental entity or a statewide association that
2 16 represents the governmental entity. The notice to bidders
2 17 shall be published more than twenty days but not more than
2 18 forty=five days before the date for filing bids.
2 19 2. A governmental entity shall have an engineer licensed
2 20 under chapter 542B or an architect registered under chapter
2 21 544A prepare plans and specifications, and calculate the
2 22 estimated total cost of a proposed public improvement.
2 23 3. Sections 38.4 through 38.13 apply to all competitive
2 24 bidding pursuant to this section.
2 25 Sec. 4. NEW SECTION. 38.4 EXEMPTIONS FROM COMPETITIVE
2 26 BIDS AND QUOTATIONS.
2 27 Architectural or engineering design services procured for a
2 28 public improvement are not subject to sections 38.3 and 38.14.
2 29 Sec. 5. NEW SECTION. 38.5 PROHIBITED CONTRACTS.
2 30 If the estimated total cost of a public improvement exceeds
2 31 the competitive bid threshold of one hundred thousand dollars,
2 32 or as established in section 314.1B, a governmental entity
2 33 shall not divide the public improvement project into separate
2 34 parts, regardless of intent, if a resulting part of the public
2 35 improvement project is not let in accordance with section
3 1 38.3.
3 2 Sec. 6. NEW SECTION. 38.6 DONATED FUNDS.
3 3 If private funds are offered to a governmental entity for a
3 4 building or an improvement to be used by the public and such
3 5 funds are conditioned upon private construction of the
3 6 building or improvement, this chapter shall not apply to the
3 7 project if the governmental entity does not contribute any
3 8 funds to such construction.
3 9 Sec. 7. NEW SECTION. 38.7 NOTICE TO BIDDERS.
3 10 The notice to bidders shall adequately notify a potential
3 11 bidder of a proposed bid and shall include the following
3 12 items:
3 13 1. The time and place for filing sealed proposals.
3 14 2. The time and place sealed proposals will be opened and
3 15 considered on behalf of the governmental entity.
3 16 3. The general nature of the public improvement on which
3 17 bids are requested.
3 18 4. In general terms when the work must be commenced and
3 19 completed.
3 20 5. That each bidder shall accompany the bid with a bid
3 21 security as defined in section 38.8 and as specified by the
3 22 governmental entity.
3 23 6. Any further information which the governmental entity
3 24 deems pertinent.
3 25 The notice to bidders may provide that bids will be
3 26 received for the furnishing of all labor and materials and
3 27 furnishing or installing equipment under one contract, or for
3 28 parts thereof in separate sections.
3 29 On public improvements to be financed wholly or partially
3 30 by special assessments against benefited property, the
3 31 governmental entity, in the notice to bidders, may request
3 32 aggregate bids for all projects included in any resolution of
3 33 necessity, notwithstanding variations in the sizes of the
3 34 improvements and notwithstanding that some parts of the
3 35 improvements are assessable and some nonassessable, and may
4 1 award the contract to the lowest responsive, responsible
4 2 bidder submitting the lowest aggregate bid.
4 3 Sec. 8. NEW SECTION. 38.8 BID SECURITY.
4 4 1. Each bidder shall accompany its bid with a bid security
4 5 as security that the successful bidder will enter into a
4 6 contract for the work bid upon and will furnish after the
4 7 award of contract a corporate surety bond, acceptable to the
4 8 governmental entity, for the faithful performance of the
4 9 contract, in an amount equal to one hundred percent of the
4 10 amount of the contract. The bid security shall be in an
4 11 amount fixed by the governmental entity, and shall be in the
4 12 form of a cashier's check or certified check drawn on a state=
4 13 chartered or federally chartered bank, or a certified share
4 14 draft drawn on a state=chartered or federally chartered credit
4 15 union, or the governmental entity may provide for a bidder's
4 16 bond with corporate surety satisfactory to the governmental
4 17 entity. The bid bond shall contain no conditions except as
4 18 provided in this section.
4 19 2. The governmental entity shall fix the amount of bid
4 20 security prior to ordering publication of the notice to
4 21 bidders and such amount must equal at least five percent, but
4 22 shall not exceed ten percent of either the estimated total
4 23 contract cost of the public improvement, or the amount of each
4 24 bid.
4 25 Sec. 9. NEW SECTION. 38.9 AWARD OF CONTRACT.
4 26 The contract for the public improvement must be awarded to
4 27 the lowest responsive, responsible bidder. However, contracts
4 28 relating to public utilities or extensions or improvements
4 29 thereof, as described in sections 384.80 through 384.94, may
4 30 be awarded by the city as it deems to be in the best interests
4 31 of the city. This section shall not be construed to prohibit
4 32 a governmental entity in the award of a contract for a public
4 33 improvement or a governing body of a city utility from
4 34 providing, in the award of a contract for a public
4 35 improvement, an enhancement of payments upon early completion
5 1 of the public improvement if the availability of the
5 2 enhancement payments is included in the notice to bidders, the
5 3 enhancement payments are competitively neutral to potential
5 4 bidders, the enhancement payments are considered as a separate
5 5 item in the public hearing on the award of contract, and the
5 6 total value of the enhancement payments does not exceed ten
5 7 percent of the value of the contract.
5 8 Sec. 10. NEW SECTION. 38.10 OPENING AND CONSIDERING
5 9 BIDS.
5 10 The governmental entity shall open, announce the amount of
5 11 the bids, and file all proposals received, at the time and
5 12 place specified in the notice to bidders. The governmental
5 13 entity may, by resolution, award the contract for the public
5 14 improvement to the bidder submitting the lowest responsive,
5 15 responsible bid, determined as provided in section 38.9, or
5 16 the governmental entity may reject all bids received, fix a
5 17 new date for receiving bids, and order publication of a new
5 18 notice to bidders. The governmental entity shall retain the
5 19 bid security furnished by the successful bidder until the
5 20 approved contract form has been executed, and a bond filed by
5 21 the bidder guaranteeing the performance of the contract, and
5 22 the contract and bond, have been approved by the governmental
5 23 entity. The provisions of chapter 573, where applicable,
5 24 apply to contracts awarded under this chapter.
5 25 The governmental entity shall promptly return the checks or
5 26 bidder's bonds of unsuccessful bidders to the bidders as soon
5 27 as the successful bidder is determined or within thirty days
5 28 whichever is sooner.
5 29 Sec. 11. NEW SECTION. 38.11 DELEGATION OF AUTHORITY.
5 30 When bids are required for any public improvement, the
5 31 governmental entity may delegate, by motion, resolution, or
5 32 policy to the city manager, clerk, engineer, or other public
5 33 officer, as applicable, the duty of receiving and opening bids
5 34 and announcing the results. The officer shall report the
5 35 results of the bidding with the officer's recommendations to
6 1 the next meeting of the governmental entity's governing body.
6 2 Sec. 12. NEW SECTION. 38.12 WHEN HEARING NECESSARY.
6 3 If the estimated total cost of a public improvement exceeds
6 4 the competitive bid threshold in section 38.3, or as adjusted
6 5 in section 314.1B, the governmental entity shall not enter
6 6 into a contract for the public improvement until the
6 7 governmental entity has held a public hearing and has approved
6 8 the proposed plans, specifications, and form of contract, and
6 9 estimated total cost of the public improvement. Notice of the
6 10 hearing must be published as provided in section 362.3. At
6 11 the hearing any interested person may appear and file
6 12 objections to the proposed plans, specifications, contract, or
6 13 estimated cost of the public improvement. After hearing
6 14 objections, the governmental entity shall by resolution enter
6 15 its decision on the plans, specifications, contract, and
6 16 estimated cost. This section does not apply to the state.
6 17 Sec. 13. NEW SECTION. 38.13 EARLY RELEASE OF RETAINED
6 18 FUNDS.
6 19 Payments made by a governmental entity for the construction
6 20 of public improvements and highway, bridge, or culvert
6 21 projects shall be made in accordance with the provisions of
6 22 chapter 573, except that:
6 23 1. At any time after all or any part of the work on the
6 24 public improvement is substantially completed, the contractor
6 25 may request the release of all or part of the retained funds
6 26 owed. The request shall be accompanied by a sworn statement
6 27 of the contractor that, ten calendar days prior to filing the
6 28 request, notice was given as required by subsection 7 to all
6 29 known subcontractors, sub=subcontractors, and suppliers.
6 30 2. Except as provided under subsection 3, upon receipt of
6 31 the request, the governmental entity shall release all or part
6 32 of the retained funds. Retained funds that are approved as
6 33 payable shall be paid at the time of the next monthly payment
6 34 or within thirty days, whichever is sooner. If partial
6 35 retained funds are released pursuant to a contractor's
7 1 request, no retained funds shall be subsequently held based on
7 2 that portion of the work. If within thirty days of when
7 3 payment becomes due the governmental entity does not release
7 4 the retained funds due, interest shall accrue on the amount of
7 5 retained funds at the rate of interest that is calculated as
7 6 the prime rate plus one percent per year as of the day
7 7 interest begins to accrue until the amount is paid.
7 8 3. If at the time of the request for the release of the
7 9 retained funds labor or materials are yet to be provided, an
7 10 amount equal to two hundred percent of the value of the labor
7 11 or materials yet to be provided, as determined by the
7 12 governmental entity's authorized contract representative, may
7 13 be withheld until such labor or materials are provided. For
7 14 purposes of this section, "authorized contract representative"
7 15 means the person chosen by the governmental entity to
7 16 represent its interests or the person designated in the
7 17 contract as the party representing the governmental entity's
7 18 interest regarding administration and oversight of the
7 19 project.
7 20 4. An itemization of the labor or materials yet to be
7 21 provided, or the reason that the request for release of
7 22 retained funds is denied, shall be provided to the contractor
7 23 in writing within thirty calendar days of the receipt of the
7 24 request for release of retained funds.
7 25 5. For purposes of this section, "substantially completed"
7 26 means the first date on which any of the following occurs:
7 27 a. Completion of the public improvement project or when
7 28 the work on the public improvement has been substantially
7 29 completed in general accordance with the terms and provisions
7 30 of the contract.
7 31 b. The work on the public improvement or on the designated
7 32 portion is substantially completed in general accordance with
7 33 the terms of the contract so that the governmental entity can
7 34 occupy or utilize the public improvement or designated portion
7 35 of the public improvement for its intended purpose. This
8 1 paragraph shall not apply to highway, bridge, or culvert
8 2 projects.
8 3 c. The public improvement project is certified as having
8 4 been substantially completed by either of the following:
8 5 (1) The architect or engineer authorized to make such
8 6 certification.
8 7 (2) The authorized contract representative.
8 8 d. The governmental entity is occupying or utilizing the
8 9 public improvement for its intended purpose. This paragraph
8 10 shall not apply to highway, bridge, or culvert projects.
8 11 6. The contractor shall release retained funds to the
8 12 subcontractor or subcontractors in the same manner as retained
8 13 funds are released to the contractor by the governmental
8 14 entity. Each subcontractor shall pass through to each lower
8 15 tier subcontractors all retained fund payments from the
8 16 contractor in accordance with the provisions of chapter 573.
8 17 7. Prior to applying for release of retained funds, the
8 18 contractor shall send a notice to all known subcontractors,
8 19 sub=subcontractors, and suppliers that provided labor or
8 20 materials for the public improvement project. The notice
8 21 shall be substantially similar to the following:
8 22 "NOTICE OF CONTRACTOR'S REQUEST FOR EARLY RELEASE OF
8 23 RETAINED FUNDS
8 24 You are hereby notified that [name of contractor] will be
8 25 requesting an early release of funds on a public improvement
8 26 project designated as [name of project] for which you have or
8 27 may have provided labor or materials. The request will be
8 28 made pursuant to Iowa Code section 38.13. The request may be
8 29 filed with the [name of governmental entity] after ten
8 30 calendar days from the date of this notice. The purpose of
8 31 the request is to have [name of governmental entity] release
8 32 and pay funds for all work that has been performed and charged
8 33 to [name of governmental entity] as of the date of this
8 34 notice. This notice is provided in accordance with Iowa Code
8 35 section 38.13."
9 1 Sec. 14. NEW SECTION. 38.14 COMPETITIVE QUOTATIONS FOR
9 2 PUBLIC IMPROVEMENT CONTRACTS.
9 3 1. Competitive quotations shall be required for a public
9 4 improvement having an estimated total cost that exceeds the
9 5 amount provided in this section, but is less than the
9 6 competitive bid threshold established in section 38.3.
9 7 2. Unless the threshold amount is adjusted pursuant to
9 8 section 314.1B, the competitive quotation threshold shall be
9 9 as follows:
9 10 a. Sixty=seven thousand dollars for a county, including a
9 11 county hospital.
9 12 b. Fifty=one thousand dollars for a city having a
9 13 population of fifty thousand or more.
9 14 c. Fifty=one thousand dollars for a school district having
9 15 a population of fifty thousand or more.
9 16 d. Fifty=one thousand dollars for an aviation authority
9 17 created within a city having a population of fifty thousand or
9 18 more.
9 19 e. Thirty=six thousand dollars for a city having a
9 20 population of less than fifty thousand, for a school district
9 21 having a population of less than fifty thousand, and for any
9 22 other governmental entity.
9 23 f. The threshold amount applied to a city applies to a
9 24 city hospital.
9 25 3. a. When a competitive quotation is required, the
9 26 governmental entity shall make a good faith effort to obtain
9 27 quotations for the work from at least two contractors
9 28 regularly engaged in such work prior to letting a contract.
9 29 Quotations may be obtained from contractors after the
9 30 governmental entity provides a description of the work to be
9 31 performed, including the plans and specifications prepared by
9 32 an architect or engineer, if required under chapter 542B or
9 33 544A, and an opportunity to inspect the work site. The
9 34 contractor shall include in the quotation the price for labor,
9 35 materials, equipment, and supplies required to perform the
10 1 work. If the work can be performed by an employee or
10 2 employees of the governmental entity, the governmental entity
10 3 may file a quotation for the work to be performed in the same
10 4 manner as a contractor.
10 5 b. The governmental entity shall designate the time,
10 6 place, and manner for filing quotations, which may be received
10 7 by mail, facsimile, or electronic mail. The governmental
10 8 entity shall record the approved quotation in meeting minutes.
10 9 Quotations approved outside a meeting of the governing body of
10 10 a governmental entity shall be included in the minutes of the
10 11 next meeting of the governing body. The governmental entity
10 12 shall award the contract to the contractor submitting the
10 13 lowest responsive, responsible quotation subject to section
10 14 38.9, or the governmental entity may reject all of the
10 15 quotations.
10 16 c. If a public improvement may be performed by an employee
10 17 of the governmental entity, the amount of estimated sales and
10 18 fuel tax which a contractor identifies in its quotation shall
10 19 be deducted from the contractor's price for determining the
10 20 lowest responsible bidder. If no quotations are received to
10 21 perform the work, or if the governmental entity's estimated
10 22 cost to do the work with its employee is less than the lowest
10 23 responsive, responsible quotation received, the governmental
10 24 entity may authorize its employee or employees to perform the
10 25 work.
10 26 Sec. 15. NEW SECTION. 38.15 STRUCTURE DEMOLITION
10 27 PROJECT.
10 28 A governmental entity may enter into annual contracts with
10 29 multiple contractors for structure demolition projects, with
10 30 each project having a total estimated cost of one hundred
10 31 thousand dollars or less, or each project having a total
10 32 estimated cost equal to or less than the competitive bid
10 33 threshold as established in section 314.1B. The governmental
10 34 entity shall solicit contractors by publishing a notice as
10 35 provided in section 362.3. A contractor is eligible to
11 1 perform structure demolition work for the governmental entity
11 2 after the contractor executes an annual demolition contract in
11 3 a form satisfactory to the governmental entity, including a
11 4 bond and insurance. For the twelve=month period following
11 5 execution of the contract or contracts, the governmental
11 6 entity may obtain competitive proposals from each eligible
11 7 contractor as necessary for the demolition of structures. The
11 8 contractor submitting the lowest responsible proposal shall
11 9 enter into a contract addendum to perform the work.
11 10 Sec. 16. Section 8A.311, subsection 10, paragraph a, Code
11 11 Supplement 2005, is amended to read as follows:
11 12 a. When the estimated total cost of construction,
11 13 erection, demolition, alteration, or repair of a public
11 14 improvement exceeds twenty=five thousand dollars the
11 15 competitive bid threshold in section 38.3, or as established
11 16 in section 314.1B, the department shall solicit bids on the
11 17 proposed improvement by publishing an advertisement in a print
11 18 format. The advertisement shall appear in two publications in
11 19 a newspaper published in the county in which the work is to be
11 20 done. The first advertisement for bids appearing in a
11 21 newspaper shall be not less than fifteen days prior to the
11 22 date set for receiving bids. The department may publish an
11 23 advertisement in an electronic format as an additional method
11 24 of soliciting bids under this paragraph comply with chapter
11 25 38.
11 26 Sec. 17. Section 28J.9, subsection 18, paragraph b, Code
11 27 Supplement 2005, is amended to read as follows:
11 28 b. Except as provided in paragraph "c", when the cost of a
11 29 contract for the construction of a building, structure, or
11 30 other improvement undertaken by a port authority involves an
11 31 expenditure exceeding twenty=five thousand dollars the
11 32 competitive bid threshold in section 38.3, or as established
11 33 in section 314.1B, and the port authority is the contracting
11 34 entity, the port authority shall make a written contract after
11 35 notice calling for bids for the award of the contract has been
12 1 given by publication twice, with at least seven days between
12 2 publications, in a newspaper of general circulation in the
12 3 area of the port authority. Each such contract shall be let
12 4 to the lowest responsive and responsible bidder. Every
12 5 contract shall be accompanied by or shall refer to plans and
12 6 specifications for the work to be done, prepared for and
12 7 approved by the port authority, and signed by an authorized
12 8 officer of the port authority and by the contractor.
12 9 Sec. 18. Section 35A.10, subsections 2 and 3, Code 2005,
12 10 are amended to read as follows:
12 11 2. The commandant and the commission shall have plans and
12 12 specifications prepared by the department of administrative
12 13 services for authorized construction, repair, or improvement
12 14 projects in excess of twenty=five thousand dollars the
12 15 competitive bid threshold in section 38.3, or as established
12 16 in section 314.1B. An appropriation for a project shall not
12 17 be expended until the department of administrative services
12 18 has adopted plans and specifications and has completed a
12 19 detailed estimate of the cost of the project, prepared under
12 20 the supervision of a registered architect or registered
12 21 professional engineer.
12 22 3. The director of the department of administrative
12 23 services shall, in writing, let all contracts for authorized
12 24 improvements in excess of twenty=five thousand dollars the
12 25 competitive bid threshold in section 38.3, or as established
12 26 in section 314.1B in accordance with chapter 8A, subchapter
12 27 III, and chapter 38. The director of the department of
12 28 administrative services shall not authorize payment for
12 29 construction purposes until satisfactory proof has been
12 30 furnished by the proper officer or supervising architect that
12 31 the parties have complied with the contract.
12 32 Sec. 19. Section 73A.1, subsection 2, Code Supplement
12 33 2005, is amended to read as follows:
12 34 2. "Municipality" as used in this chapter means township,
12 35 school corporation, and or the state fair board.
13 1 Sec. 20. Section 73A.2, Code 2005, is amended to read as
13 2 follows:
13 3 73A.2 NOTICE OF HEARING.
13 4 Before any municipality shall enter into any contract for
13 5 any public improvement to cost twenty=five thousand dollars or
13 6 more in excess of the competitive bid threshold in section
13 7 38.3, or as established in section 314.1B, the governing body
13 8 proposing to make the contract shall adopt proposed plans and
13 9 specifications and proposed form of contract, fix a time and
13 10 place for hearing at the municipality affected or other nearby
13 11 convenient place, and give notice by publication in at least
13 12 one newspaper of general circulation in the municipality at
13 13 least ten days before the hearing.
13 14 Sec. 21. Section 73A.18, Code 2005, is amended to read as
13 15 follows:
13 16 73A.18 WHEN BIDS REQUIRED == ADVERTISEMENT == DEPOSIT.
13 17 When the estimated total cost of construction, erection,
13 18 demolition, alteration or repair of a public improvement
13 19 exceeds twenty=five thousand dollars the competitive bid
13 20 threshold in section 38.3, or as established in section
13 21 314.1B, the municipality shall advertise for bids on the
13 22 proposed improvement by two publications in a newspaper
13 23 published in the county in which the work is to be done. The
13 24 first advertisement for bids shall be not less than fifteen
13 25 days prior to the date set for receiving bids. The
13 26 municipality shall let the work to the lowest responsible
13 27 bidder submitting a sealed proposal. However, if in the
13 28 judgment of the municipality bids received are not acceptable,
13 29 all bids may be rejected and new bids requested. A bid shall
13 30 be accompanied, in a separate envelope, by a deposit of money
13 31 or a certified check or credit union certified share draft in
13 32 an amount to be named in the advertisement for bids as
13 33 security that the bidder will enter into a contract for the
13 34 doing of the work. The municipality shall fix the bid
13 35 security in an amount equal to at least five percent, but not
14 1 more than ten percent of the estimated total cost of the work.
14 2 The checks, share drafts or deposits of money of the
14 3 unsuccessful bidders shall be returned as soon as the
14 4 successful bidder is determined, and the check, share draft or
14 5 deposit of money of the successful bidder shall be returned
14 6 upon execution of the contract documents. This section does
14 7 not apply to the construction, erection, demolition,
14 8 alteration or repair of a public improvement when the
14 9 contracting procedure for the doing of the work is provided
14 10 for in another provision of law.
14 11 Sec. 22. Section 161C.2, subsection 1, paragraph b, Code
14 12 2005, is amended to read as follows:
14 13 b. Any work project with an estimated cost of twenty=five
14 14 thousand dollars or more in excess of the competitive bid
14 15 threshold in section 38.3, or as established in section 314.1B
14 16 shall be undertaken as a public contract as provided in
14 17 chapters 73A and 573. The local contracting organization
14 18 shall designate a contracting officer and shall establish
14 19 procedures to manage the contract, approve bills for payment,
14 20 and review proposed change orders or amendments to the
14 21 contract.
14 22 Sec. 23. Section 218.58, subsections 2 through 4, Code
14 23 2005, are amended to read as follows:
14 24 2. The director shall have plans and specifications
14 25 prepared by the department of administrative services for
14 26 authorized construction, repair, or improvement projects
14 27 costing over twenty=five thousand dollars the competitive bid
14 28 threshold in section 38.3, or as established in section
14 29 314.1B. An appropriation for a project shall not be expended
14 30 until the department of administrative services has adopted
14 31 plans and specifications and has completed a detailed estimate
14 32 of the cost of the project, prepared under the supervision of
14 33 a registered architect or registered professional engineer.
14 34 Plans and specifications shall not be adopted and a project
14 35 shall not proceed if the project would require an expenditure
15 1 of money in excess of the appropriation.
15 2 3. The department of administrative services shall comply
15 3 with the competitive bid procedures in chapter 38 to let all
15 4 contracts under chapter 8A, subchapter III, for authorized
15 5 construction, repair, or improvement of departmental
15 6 buildings, grounds, or equipment.
15 7 4. If the director of the department of human services and
15 8 the director of the department of administrative services
15 9 determine that emergency repairs or improvements estimated to
15 10 cost more than twenty=five thousand dollars the competitive
15 11 bid threshold in section 38.3, or as established in section
15 12 314.1B are necessary to assure the continued operation of a
15 13 departmental institution, the requirements of subsections 2
15 14 and 3 for preparation of plans and specifications and
15 15 competitive procurement procedures are waived. A
15 16 determination of necessity for waiver by the director of the
15 17 department of human services and the director of the
15 18 department of administrative services shall be in writing and
15 19 shall be entered in the project record for emergency repairs
15 20 or improvements. Emergency repairs or improvements shall be
15 21 accomplished using plans and specifications and competitive
15 22 procurement quotation or bid procedures, as applicable, to the
15 23 greatest extent possible, considering the necessity for rapid
15 24 completion of the project. A waiver of the requirements of
15 25 subsections 2 and 3 does not authorize an expenditure in
15 26 excess of an amount otherwise authorized for the repair or
15 27 improvement.
15 28 Sec. 24. Section 262.34, subsection 4, Code Supplement
15 29 2005, is amended by striking the subsection and inserting in
15 30 lieu thereof the following:
15 31 4. The contractor shall release retained funds to the
15 32 subcontractor or subcontractors in the same manner as retained
15 33 funds are released to the contractor by the board. Each
15 34 subcontractor shall pass through to each lower tier
15 35 subcontractors all retained fund payments from the contractor
16 1 in accordance with the provisions of chapter 573.
16 2 Sec. 25. Section 297.7, subsection 1, Code 2005, is
16 3 amended to read as follows:
16 4 1. Sections 73A.2 and 73A.18 are Chapter 38 is applicable
16 5 to the construction and repair of school buildings and other
16 6 public improvements as defined in section 38.2.
16 7 Sec. 26. Section 297.8, Code 2005, is amended to read as
16 8 follows:
16 9 297.8 EMERGENCY REPAIRS.
16 10 When emergency repairs costing more than twenty=five
16 11 thousand dollars the competitive bid threshold in section
16 12 38.3, or as established in section 314.1B are necessary in
16 13 order to prevent the closing of any school, the provisions of
16 14 the law with reference to advertising for bids shall not
16 15 apply, and in that event the board may contract for such
16 16 emergency repairs without advertising for bids. However,
16 17 before such emergency repairs can be made to any schoolhouse,
16 18 it shall be necessary to procure a certificate from the area
16 19 education agency administrator that such emergency repairs are
16 20 necessary to prevent the closing of the school.
16 21 Sec. 27. Section 314.1, subsection 2, Code 2005, is
16 22 amended to read as follows:
16 23 2. Notwithstanding any other provision of law to the
16 24 contrary, a public improvement that involves the construction,
16 25 reconstruction, or improvement of a highway, bridge, or
16 26 culvert and that has a cost in excess of the applicable
16 27 threshold in section 73A.18, 262.34, 297.7, 309.40, 310.14, or
16 28 313.10, or 384.96, as modified by the bid threshold
16 29 subcommittee pursuant to section 314.1B, shall be advertised
16 30 and let for bid, except such public improvements that involve
16 31 emergency work pursuant to section 309.40A, 313.10, 384.95, or
16 32 384.103, subsection 2. However, a public improvement that has
16 33 an estimated total cost to a city in excess of a threshold of
16 34 fifty thousand dollars, as modified by the bid threshold
16 35 subcommittee pursuant to section 314.1B, and that involves the
17 1 construction, reconstruction, or improvement of a highway,
17 2 bridge, or culvert that is under the jurisdiction of a city
17 3 with a population of more than fifty thousand, shall be
17 4 advertised and let for bid.
17 5 Sec. 28. Section 314.1A, Code 2005, is amended to read as
17 6 follows:
17 7 314.1A DETAILED COST ACCOUNTINGS BY CITIES AND COUNTIES ==
17 8 RULES.
17 9 1. The department shall adopt rules prescribing the manner
17 10 by which cities and counties shall provide a detailed cost
17 11 accounting under section 309.93 or 312.14, of all instances of
17 12 the use of day labor or public or private contracts for
17 13 construction, reconstruction, or improvement projects on
17 14 highways of a highway, bridge, or culvert within their
17 15 jurisdiction.
17 16 2. The department shall adopt rules prescribing the manner
17 17 by which governmental entities, as defined in section 38.2,
17 18 shall administer section 38.14 concerning public improvement
17 19 quotations.
17 20 3. The rules shall include definitions concerning types
17 21 of projects and uniform requirements and definitions that
17 22 cities and counties under subsection 1 and governmental
17 23 entities under subsection 2 shall use in determining costs for
17 24 such projects. The department shall establish an advisory
17 25 committee composed of representatives of public sector
17 26 agencies, private sector vertical and horizontal contractor
17 27 organizations, and certified public employee collective
17 28 bargaining organizations to make recommendations for such
17 29 rules.
17 30 Sec. 29. Section 314.1B, Code 2005, is amended to read as
17 31 follows:
17 32 314.1B BID THRESHOLD SUBCOMMITTEE == ADJUSTMENTS ==
17 33 NOTICE.
17 34 1. HORIZONTAL INFRASTRUCTURE.
17 35 a. The director of the department shall appoint, from the
18 1 members of the advisory committee established under section
18 2 314.1A, a horizontal infrastructure bid threshold subcommittee
18 3 for highway, bridge, or culvert projects. The subcommittee
18 4 shall consist of seven members, three of whom shall be
18 5 representatives of local public sector agencies cities and
18 6 counties, three of whom shall be representatives of private
18 7 sector contractor organizations, and with the remaining member
18 8 being the director or the director's designee, who shall serve
18 9 as chairperson of the subcommittee. A vacancy in the
18 10 membership of the subcommittee shall be filled by the
18 11 director.
18 12 2. a. b. The subcommittee shall review the competitive
18 13 bid thresholds applicable to city and county highway, bridge,
18 14 and culvert projects. The subcommittee shall review price
18 15 adjustments for all types of city and county highway, bridge,
18 16 and culvert construction, reconstruction, and improvement
18 17 projects, based on changes in the construction price index
18 18 from the preceding year. Upon completion of the review the
18 19 subcommittee may make adjustments in the applicable bid
18 20 thresholds for types of work based on the price adjustments.
18 21 b. c. A bid threshold, under this subsection, shall not
18 22 be adjusted to an amount that is less than the bid threshold
18 23 applicable to a city or county on July 1, 2002 2006, as
18 24 provided in section 73A.18, 309.40, 310.14, or 314.1, or
18 25 384.96. An adjusted bid threshold shall take effect as
18 26 provided in subsection 3, and shall remain in effect until a
18 27 new adjusted bid threshold is established and becomes
18 28 effective as provided in this section.
18 29 2. VERTICAL INFRASTRUCTURE.
18 30 a. The director of the department shall appoint, from the
18 31 members of the advisory committee established under section
18 32 314.1A, a vertical infrastructure bid threshold subcommittee
18 33 for public improvements as defined in section 38.2. The
18 34 subcommittee shall consist of seven members, three of whom
18 35 shall be representatives of governmental entities as defined
19 1 in section 38.2, three of whom shall be representatives of
19 2 private sector vertical infrastructure contractor
19 3 organizations, and with the remaining member being the
19 4 director or the director's designee, who shall serve as
19 5 chairperson of the subcommittee. A vacancy in the membership
19 6 of the subcommittee shall be filled by the director.
19 7 b. The subcommittee appointed under this subsection shall
19 8 review the competitive bid and quotation thresholds applicable
19 9 to governmental entities under chapter 38. The subcommittee
19 10 shall review price adjustments for all types of construction,
19 11 reconstruction, and public improvement projects based on the
19 12 changes in the construction price index, building cost index,
19 13 and material cost index from the preceding year. Upon
19 14 completion of the review the subcommittee may make adjustments
19 15 in the applicable bid thresholds for types of work based on
19 16 the price adjustments.
19 17 c. The subcommittee shall not make an initial adjustment
19 18 to the competitive bid threshold in section 38.3 to be
19 19 effective prior to January 1, 2012. Thereafter, the
19 20 subcommittee shall adjust the bid threshold amount in
19 21 accordance with subsection 3 but shall not adjust the bid
19 22 threshold to an amount less than the bid threshold applicable
19 23 to a governmental entity on January 1, 2007.
19 24 d. Prior to January 1, 2012, the subcommittee shall make
19 25 adjustments to the competitive quotation threshold in section
19 26 38.14 for vertical infrastructure in accordance with
19 27 adjustments made by the horizontal infrastructure subcommittee
19 28 under subsection 1 applicable to city and county highway,
19 29 bridge, and culvert projects.
19 30 3. REVIEW == PUBLICATION. The Each subcommittee shall
19 31 meet to conduct the review and make the adjustments described
19 32 in this section on or before August 1 of every other year, or
19 33 of every year if determined necessary by the subcommittee,
19 34 with the first meeting occurring on or before August 1, 2002.
19 35 By September 1 of each year in which the a subcommittee makes
20 1 adjustments in the bid or quotation thresholds, the director
20 2 shall cause an advisory notice to be published in the Iowa
20 3 administrative bulletin and in a newspaper of general
20 4 circulation in this state, stating the adjusted bid and
20 5 quotation thresholds to be in effect on January 1 of the
20 6 following year, as established by the subcommittee
20 7 subcommittees under this section.
20 8 Sec. 30. Section 330A.12, Code 2005, is amended to read as
20 9 follows:
20 10 330A.12 AWARD OF CONTRACT.
20 11 All contracts entered into by an authority for the
20 12 construction, reconstruction, and improvement of aviation
20 13 facilities shall be entered into pursuant to and shall comply
20 14 with the competitive bid procedures in chapter 73A 38.
20 15 However, where an authority determines an emergency exists, it
20 16 may enter into contracts obligating the authority for not in
20 17 excess of twenty=five thousand dollars the competitive bid
20 18 threshold in section 38.3, or as established in section 314.1B
20 19 per emergency without regard to the requirements of chapter
20 20 73A 38 and the authority may proceed with the necessary action
20 21 as expeditiously as possible to the extent necessary to
20 22 resolve such emergency.
20 23 Sec. 31. Section 331.341, subsections 1 and 2, Code 2005,
20 24 are amended to read as follows:
20 25 1. When the estimated total cost of a public improvement,
20 26 other than improvements which may be paid for from the
20 27 secondary road fund, exceeds the amount specified in section
20 28 309.40 competitive bid threshold in section 38.3, or as
20 29 established in section 314.1B, the board shall follow the
20 30 contract letting competitive bid procedures provided for
20 31 cities governmental entities in sections 384.95 to 384.103
20 32 chapter 38. However, in following those sections the board
20 33 shall substitute the word "county" for the word "city",
20 34 section 331.305 for section 362.3, shall consider "governing
20 35 body" to mean the board, and shall exclude references to a
21 1 city utility, utility board of trustees, or public utilities.
21 2 As used in this section, "public improvement" means the same
21 3 as defined in section 384.95 38.2 as modified by this
21 4 subsection.
21 5 2. The board shall give preference to Iowa products and
21 6 labor in accordance with chapter 73 and shall comply with bid
21 7 and contract requirements in section 73.2 chapter 38.
21 8 Sec. 32. Section 357.14, unnumbered paragraph 2, Code
21 9 2005, is amended to read as follows:
21 10 When the completed plans and specifications are on file
21 11 with the county auditor, and the estimated total cost of the
21 12 project exceeds the competitive bid threshold in section 38.3,
21 13 or as established in section 314.1B, the board of supervisors
21 14 shall advertise for bids and shall publish a notice once each
21 15 week for two consecutive weeks in some newspaper published in
21 16 the county in which the improvement is to be constructed,
21 17 setting forth the location and nature of the improvement and
21 18 the date and place where bids will be received by the board
21 19 comply with the competitive bid procedures in chapter 38 for
21 20 the construction of the project. The last published notice to
21 21 bidders shall be at least seven days before the time set for
21 22 receiving bids. Bidders shall be required to submit certified
21 23 checks or credit union certified share drafts for five percent
21 24 of the amount of the bid.
21 25 Sec. 33. Section 357A.12, unnumbered paragraph 2, Code
21 26 2005, is amended to read as follows:
21 27 The procedures for contract letting competitive bidding
21 28 specified in sections 384.95 through 384.102 chapter 38 and
21 29 for emergency repairs as specified in section 384.103,
21 30 subsection 2, shall apply to construction carried out pursuant
21 31 to this chapter. References in those sections to a city shall
21 32 be applicable to a rural water district operating under this
21 33 chapter, and references to a city council shall be applicable
21 34 to the board of directors of a rural water district.
21 35 Sec. 34. Section 364.4, subsection 4, paragraph i, Code
22 1 2005, is amended to read as follows:
22 2 i. A contract for construction by a private party of
22 3 property to be leased or lease=purchased by a city is not a
22 4 contract for a public improvement under section 384.95,
22 5 subsection 1, except for purposes of section 384.102 chapter
22 6 38. However, if a lease=purchase contract is funded in
22 7 advance by means of the lessor depositing moneys to be
22 8 administered by a city, with the city's obligations to make
22 9 rent payments commencing with its receipt of moneys, a
22 10 contract for construction of the property in question awarded
22 11 by the city is subject to division VI of chapter 384.
22 12 Sec. 35. Section 380.4, unnumbered paragraph 1, Code 2005,
22 13 is amended to read as follows:
22 14 Passage of an ordinance, amendment, or resolution requires
22 15 a majority vote of all of the members of the council, except
22 16 when the mayor may vote to break a tie vote in a city with an
22 17 even number of council members, as provided in section 372.4.
22 18 Passage of a motion requires a majority vote of a quorum of
22 19 the council. A resolution must be passed to spend public
22 20 funds in excess of twenty=five thousand dollars the
22 21 competitive bid threshold in section 38.3, or as established
22 22 in section 314.1B on any one project, or to accept public
22 23 improvements and facilities upon their completion. Each
22 24 council member's vote on a measure must be recorded. A
22 25 measure which fails to receive sufficient votes for passage
22 26 shall be considered defeated.
22 27 Sec. 36. Section 384.20, unnumbered paragraph 3, Code
22 28 2005, is amended to read as follows:
22 29 "Continuing appropriation" means the unexpended portion of
22 30 the cost of public improvements, as defined in section 384.95
22 31 38.3, which cost was adopted through a public hearing pursuant
22 32 to section 384.102 38.12 and was included in an adopted or
22 33 amended budget of a city. A continuing appropriation does not
22 34 expire at the conclusion of a fiscal year. A continuing
22 35 appropriation continues until the public improvement is
23 1 completed, but expenditures under the continuing appropriation
23 2 shall not exceed the resources available for paying for the
23 3 public improvement.
23 4 Sec. 37. Section 384.103, subsection 2, unnumbered
23 5 paragraph 2, Code 2005, is amended to read as follows:
23 6 In that event the governing body may contract for emergency
23 7 repairs without holding a public hearing and advertising for
23 8 bids, and the provisions of sections 384.96 to 384.102,
23 9 chapter 38 do not apply.
23 10 Sec. 38. Section 390.3, unnumbered paragraph 2, Code 2005,
23 11 is amended to read as follows:
23 12 However, in the performance of a joint agreement, the
23 13 governing body is not subject to statutes generally applicable
23 14 to public contracts, including hearings on plans,
23 15 specifications, form of contracts, costs, notice and
23 16 competitive bidding required under sections 384.95 through
23 17 chapter 38 and section 384.103, unless all parties to the
23 18 joint agreement are cities located within the state of Iowa.
23 19 Sec. 39. Section 573.2, unnumbered paragraph 1, Code 2005,
23 20 is amended to read as follows:
23 21 Contracts for the construction of a public improvement
23 22 shall, when the contract price equals or exceeds twenty=five
23 23 thousand dollars the competitive bid threshold in section
23 24 38.3, or as established in section 314.1B, be accompanied by a
23 25 bond, with surety, conditioned for the faithful performance of
23 26 the contract, and for the fulfillment of other requirements as
23 27 provided by law. The bond may also be required when the
23 28 contract price does not equal that amount. However, if a
23 29 contractor provides a performance or maintenance bond as
23 30 required by a public improvement contract governed by this
23 31 chapter and subsequently the surety company becomes insolvent
23 32 and the contractor is required to purchase a new bond, the
23 33 contractor may apply for reimbursement from the governmental
23 34 agency that required a second bond and the claims shall be
23 35 reimbursed from funds allocated for road construction
24 1 purposes.
24 2 Sec. 40. Section 904.314, unnumbered paragraph 1, Code
24 3 2005, is amended to read as follows:
24 4 The director shall cause plans and specifications to be
24 5 prepared by the department of administrative services for all
24 6 improvements authorized and costing over twenty=five thousand
24 7 dollars the competitive bid threshold in section 38.3, or as
24 8 established in section 314.1B. An appropriation for any
24 9 improvement costing over twenty=five thousand dollars the
24 10 competitive bid threshold in section 38.3, or as established
24 11 in section 314.1B, shall not be expended until the adoption of
24 12 suitable plans and specifications, prepared by a competent
24 13 architect or engineer and accompanied by a detailed statement
24 14 of the amount, quality, and description of all material and
24 15 labor required for the completion of the improvement.
24 16 Sec. 41. Section 904.315, Code 2005, is amended to read as
24 17 follows:
24 18 904.315 CONTRACTS FOR IMPROVEMENTS.
24 19 The director of the department of administrative services
24 20 shall, in writing, let all contracts for authorized
24 21 improvements costing in excess of twenty=five thousand dollars
24 22 under chapter 8A, subchapter III, costing in excess of the
24 23 competitive bid threshold in section 38.3, or as established
24 24 in section 314.1B. Upon prior authorization by the director,
24 25 improvements costing five thousand dollars or less may be made
24 26 by the superintendent of any institution.
24 27 A contract is not required for improvements at a state
24 28 institution where the labor of inmates is to be used if the
24 29 contract is not for a construction, reconstruction,
24 30 demolition, or repair project or improvement with an estimated
24 31 cost in excess of twenty=five thousand dollars the competitive
24 32 bid threshold in section 38.3, or as established in section
24 33 314.1B.
24 34 Sec. 42. Sections 384.95 through 384.102, Code 2005, are
24 35 repealed.
25 1 Sec. 43. EFFECTIVE DATE. Sections 24, 28, and 29 of this
25 2 Act take effect upon enactment and the remainder of this Act
25 3 takes effect January 1, 2007.
25 4 Sec. 44. APPLICABILITY DATE. This Act applies to public
25 5 improvement contracts governed by chapter 38 and entered into
25 6 on or after January 1, 2007.
25 7 EXPLANATION
25 8 This bill creates a new Code chapter to be known as the
25 9 Iowa construction bidding procedures Act. The bill
25 10 incorporates many of the provisions of the contract letting
25 11 procedures used by cities, and also adhered to by counties and
25 12 other governmental entities for public improvements having an
25 13 estimated total cost exceeding $25,000.
25 14 The construction bidding procedures under the bill apply to
25 15 all governmental entities including the state, political
25 16 subdivisions of the state, and public school corporations, but
25 17 excluding the state board of regents. A governmental entity
25 18 is required to follow certain competitive bidding procedures
25 19 if the cost of the public improvement, i.e., a building or
25 20 structure, exceeds the competitive bid threshold of $100,000.
25 21 This competitive bid threshold is subject to change by the
25 22 vertical infrastructure bid threshold subcommittee. However,
25 23 the subcommittee cannot make an initial adjustment to the
25 24 competitive bid threshold to take effect prior to January 1,
25 25 2012.
25 26 The bill also provides procedures, known as competitive
25 27 quotations, for a governmental entity to follow if the public
25 28 improvement costs less than the competitive bid threshold of
25 29 $100,000, and yet exceeds the following threshold amounts:
25 30 1. For a county, including a county hospital, $67,000.
25 31 2. For a city having a population of 50,000 or more,
25 32 $51,000.
25 33 3. For a school district having a population of 50,000 or
25 34 more, $51,000.
25 35 4. For an aviation authority created within a city having
26 1 a population of 50,000 or more, $51,000.
26 2 5. For a city having a population of less than 50,000, for
26 3 a school district having a population of less than 50,000, and
26 4 for any other governmental entity, $36,000.
26 5 6. The threshold amount applied to a city applies to a
26 6 city hospital.
26 7 These competitive quotation threshold amounts are subject
26 8 to change by the same vertical infrastructure bid threshold
26 9 subcommittee that adjusts the competitive bid threshold
26 10 amount. Prior to January 1, 2012, an adjustment to the
26 11 competitive quotation threshold for vertical infrastructure
26 12 must be in accordance with adjustments made by the horizontal
26 13 infrastructure bid threshold subcommittee.
26 14 Currently, the state department of transportation has a
26 15 subcommittee that reviews bid thresholds for highway, bridge,
26 16 or culvert projects. The bill designates this existing
26 17 subcommittee as the horizontal infrastructure bid threshold
26 18 subcommittee. The director of the department appoints the
26 19 members for both the horizontal infrastructure bid threshold
26 20 subcommittee and the vertical infrastructure bid threshold
26 21 subcommittee.
26 22 The bill includes conforming amendments that replace the
26 23 existing $25,000 competitive bid threshold amount with a
26 24 reference to the $100,000 bid threshold in new Code section
26 25 38.3, or as adjusted by the vertical infrastructure bid
26 26 threshold subcommittee in Code section 314.1B.
26 27 The bill provides an immediate effective date for the
26 28 provisions concerning the state board of regents payment of
26 29 retained funds, the state department of transportation
26 30 rulemaking, and the bid threshold subcommittees. The
26 31 remainder of the bill takes effect January 1, 2007. The bill
26 32 applies to public improvement contracts governed by new Code
26 33 chapter 38 and entered into on or after January 1, 2007.
26 34 LSB 5672SV 81
26 35 eg:rj/je/5