Two bills in the Iowa Statehouse aimed at how public universities and local elected bodies bid out large capital projects have survived funnel week.
However, both bills — which seek to add transparency and curb favoritism among universities and local governments when selecting a contractor — have drawn opposition from some state labor groups, including Master Builders of Iowa, a member organization that promotes a business environment friendly to the construction industry.
“Some people are upset, but that is what it is. We believe this is the right step to take and we’re going to proceed,” said Rep. Jake Highfill, R-Johnston, chairman of the House Local Government Committee, who authored both bills.
The bill was crafted in response to Linn County supervisors’ use of a lease-purchase agreement, rather than a traditional competitive-bidding process, to select a contractor for the county’s future public health and youth development services building.
The county board earlier this year approved a $31.5 million project limit — to be paid by the county with general obligation bonds for urban renewal. County officials estimate the final project cost will be several million dollars below that limit.
Chad Kleppe, president and chief executive of Master Builders of Iowa, said the labor organization is strongly opposed to the manner in which Linn County pursued their public project, but added he feels Highfill’s bill would do more harm than good.
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“I think the current bill would basically make lease-purchase agreements useless, or not a viable means of procurement,” Kleppe said. “It would make it so difficult to achieve and I don’t think you would see the interest in working with a public owner with a lease-purchase agreement under the way the House file is written.”
The organization is not against lease-purchase agreements, but rather how Linn County supervisors used the practice to select their preferred contractor, Kleppe said.
While legal action regarding the county agreement was discussed, Kleppe said a lawsuit is unlikely.
“Our legal council didn’t see anything that would rise to a point where a legal challenge was justified,” Kleppe said.
The Metropolitan Coalition, Iowa Federation of Labor, AFSCME Iowa Council 61 and several cities and counties have declared against the bill.
A second bill, House File 2301, applies to how the Board of Regents pursues large capital projects.
Under the bill, the board that governs Iowa’s public universities would have to follow expanded advertising requirements, have an engineer or architect prepare plans and cost estimates and “identify a specific reason” if the board rejects all bids.
Kleppe argued that while HF 2301 gives contractors the opportunity to bid on projects, the board is not required to accept them.
“Forcing a contractor to go through all the hoops to provide a bid — it’s a free bid to that owner, but it’s obviously not free on the contractors side. There’s a lot of time and effort that goes into creating that estimate,” Kleppe said. “We see that bill as very counterproductive and convoluted.”
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Organizations that filed opposition to the bill include Plumbers and Steam Fitters Local 33 and the Iowa Federation of Labor. Iowa Competitive Bidding Alliance, Inc., has filed in support of the legislation.
Formal discussion has not been scheduled for either bill, but Highfill said he has GOP support for both. “So far, every lawmaker on my side of the aisle likes it,” he said.
Highfill said he’s open to discuss amendments to the bills, but added no formal requests have been made so far.
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