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Regents dig in on disputed building method

Contractors complain board's process shuts them out

People walk down the steps July 28, 2017, at Catlett Residence Hall on the University of Iowa campus in Iowa City. The $95 million dorm was a design-build project, a construction method that allows the use of one entity to both design and build the project. (KC McGinnis/For The Gazette)
People walk down the steps July 28, 2017, at Catlett Residence Hall on the University of Iowa campus in Iowa City. The $95 million dorm was a design-build project, a construction method that allows the use of one entity to both design and build the project. (KC McGinnis/For The Gazette)

For years, the Iowa Board of Regents has held that the public universities it governs are within the law to use alternative construction methods for their expansive and seemingly endless building projects — if they find it’s in the system’s “best interest” to avoid a traditional bidding process.

Some contractors and state lawmakers disagree, even proposing legislation to make explicit what they see as the existing mandate that Iowa’s public universities use a design-bid-build method of construction for projects.

Lobbyists for the University of Iowa, Iowa State University and the University of Northern Iowa have opposed such legislation, including a bill aired in the last legislative session that would have required regent institutions to follow the traditional method of contracting — picking separate entities for the design and construction of a project, not one company to do both.

The regents to date have used the abbreviated design-build process on 10 construction projects — five at ISU and five at the UI, including the $11.8 million addition to the Hawkeye Tennis and Recreation Complex and the 12-story, $95 million Elizabeth Catlett Residence Hall.

The board and proponents of the design-build process have said that, for certain projects, the alternative method can trim costs, improve efficiency and ramp up a project’s pace from start to finish.

But Greg Spenner, president of the Associated Builders and Contractors of Iowa, believes the regents’ use of design-build allows the universities to show favoritism.

“When a public body has a project to put out there for construction, the Iowa competitive bid law was put in place to protect Iowa’s taxpayers from behind-the-scenes, smoke-filled room deals that this (design-build) process provides for,” Spenner said.

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“We stand on the side of open and competitive bidding, where contractors have the ability to bid on projects and not be prohibited from bidding because the board likes a particular contractor.”

The Board of Regents “alternative delivery method guidelines,” crafted in January 2018 and updated in August, maintain that Iowa Code “does not prohibit the use of alternative delivery methods.” Those guidelines also state the board “has long recognized the flexibility afforded it under Iowa Code 262.34 and has adopted policies permitting regent universities to utilize alternative project delivery methods.”

The board did so again last month, amending its policies further to plainly allow the universities to use alternative delivery methods for projects topping $1 million.

The June policy changes said projects under the $1 million threshold could request a waiver to use an alternative method “with proper justification,” according to regent spokesman Josh Lehman.

A policy section requiring that universities give preference when choosing a design consultant or construction manager to those based in Iowa or with permanent offices in Iowa was changed also. The board now gives discretion to the design-build firms.

“It is the design-build firm’s choice whether the design firm or the build firm (or both) are based in Iowa or with permanent offices in Iowa,” according to the new policy language.

Spenner, of the Associated Builders and Contractors, sees the amendments as evidence the regents are afoul of state bidding laws.

“This action that the Board of Regents has taken to me underscores the fact that they truly do not have statutory authority to subvert Iowa’s competitive bid laws, which they’ve been doing,” he said. “They are trying to backdoor their way into greenlighting that.”

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The board for years tried to change Iowa Code to explicitly allow its use of alternative building methods. But in 2012, the board decided it already had authority.

Asked why the board now felt it needed to update its policy, regents spokesman Lehman cited the historical use of the design-build method.

“When appropriate, our institutions have used design-build for certain construction projects, and we wanted to have updated language in the policy manual that specifically addressed these types of projects,” Lehman said.

This summer’s policy revision isn’t the first the board has acted to integrate design-build into its framework. Doug Struyk, a lobbyist with the Iowa Competitive Bidding Alliance, said the alliance has logged concerns about the regents’ increasing use of the method.

“We have heard complaints from the Iowa Competitive Bid Alliance membership about projects they’re not capable of bidding on because they don’t do design-build,” he said. “Or they’ve created a design-build company but not made it past the first stage to bid on the second.”

Struyk argued the design-build method is rife with subjectivity in that it strips away any opportunity to compare the best value for construction of a project.

“We don’t have a level playing field,” he said.

Rep. Bobby Kaufmann, R-Wilton, who backed the most recent iteration of legislation that would have forced the regents to add the bid step back in to its design-build process, said the study bill was aired in subcommittee but didn’t advance to a committee vote.

“There are still many sides to these competitive bid bills, and I have yet to reach consensus on the best way forward,” Kaufmann said.

• Comments: (319) 339-3158; vanessa.miller@thegazette.com

REGENT DESIGN-BUILD PROJECTS

University of Iowa

• The indoor turf addition to the Hawkeye Tennis and Recreation Complex

• Biomedical Research Support Facility

• Elizabeth Catlett Residence Hall

• Hancher footbridge

• The water plant’s rehabilitation gravity filters

Iowa State University

• Gregory L. Geoffroy Hall

• Poultry farm-teaching and research facilities

• Gerdin Business Building addition

• Veterinary Diagnostic Lab

• Curtiss Farm-Feed Mill and Grain Science Complex

Source: Board of Regents

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