Proposed bill could tighten regents’ bidding rules

IOWA CITY - When the Board of Regents decided this month to go ahead with a $95 million residence hall at the University of Iowa, it turned to an increasingly popular way of launching projects without going through a traditional bidding process - one that some legislators say is an inappropriate way of spending public money.

The regents, who oversee Iowa's three public institutions, are exempt from the portion of Iowa Code regulating competitive bids for public improvement contracts. That law requires most of Iowa's boards and commissions to follow a traditional 'design-bid-build” process, which obliges an engineer or architect to prepare plans and specifications, estimate project costs and then make those plans and costs available to bidders interested in constructing the project.

The regents instead have used a 'design-build” process for approving several recent projects. That method differs in that it uses a single contract with one company to provide both design and construction services. Proponents say the method can cut costs, increase speed and improve efficiency.

The board currently operates under a separate section of the Iowa Code that requires it to advertise for bids related to projects exceeding $100,000. If the board finds the bids unacceptable, the law allows it to reject them and proceed in an alternate manner.

The regents-specific portion of the code requires all plans and specifications be made open for public inspection, but it doesn't clearly state when that publication should occur - before or after the design process.

Rep. Dawn Pettengill, R-Mount Auburn, who is representing a proposed bill on the issue in the Legislature, said some lawmakers believe the board already is obliged to follow the 'design-bid-build” process.

'If they don't like the bid, they have the ability to turn it down and select something else,” she said. 'But they have to go through the bidding first - like everyone else.”

In an effort to ensure the board complies with the same standards imposed on other government boards and commissions, Pettengill said the proposed bill would reverse the regents' exemption from the law in undertaking capital projects.

'Everyone should be following the law, the Board of Regents is not exempt,” she said. 'It's blatant disregard for what the law says.”

But the Board of Regents has a different interpretation, according to Aimee Claeys, its associate counsel.

'Our use of design-build is consistent with the current letter and intent of the law,” Claeys said. 'And we certainly believe it presents a useful and efficient opportunity for certain projects the regents undertake.”

Some recent projects for which the board has used the design-build process include an $11.8 million addition to the Hawkeye Tennis and Recreation Complex on the UI campus, a $49.5 million residence hall east at Iowa State University and the UI's $95 million Madison Street Residence Hall.

Claeys said most of the board's projects still follow the traditional process because that's the best option in many cases. Last year, for example, she said the board approved 315 projects valued at $250,000 or more, and only two used the alternative method.

'But design-build presents a unique opportunity to generate the best value for our public dollar in some cases,” she said. 'And we want to take advantage of those opportunities.”

Sen. Bob Dvorsky, D-Coralville, said Iowa's existing law doesn't reflect recent changes in the construction arena, and some lawmakers have suggested doing a study to update the code.

'I'm not sure we need to handcuff the regents,” he said.

Legislation backed by the board in 2007 and 2012 would have provided a clear path for use of the design-build process, including an 'alternative project delivery pilot program.” That would have let the board use an alternative method for up to three projects a year for three years.

Neither piece of legislation passed, according to Pettengill. But, she said, those efforts to try to change the code show the board knew it could be in violation.

Pettengill said lawmakers are working on an amendment to the bill, which could come up next week.