Tuesday July 17, 2018 Volume 9 Issue 42 Digital Magazine The Trouble with Low Bid: LMS Talks New K12 Procurement Change By Tasha Anderson for Arizona Builder’s Exchange More than 100 people gathered at the DoubleTree by Hilton in Tempe on Thursday, July 12 for what was by far the most popular AZBEX Leading Market Series topic: the Public K12 market. While most LMS events so far have cov- ered projects that are upcoming/in the works and how to get work within the market, this particular topic was more focused on the unexpected K12 procure- ment rule change expected to go into effect by July 1, 2019. The rule was added to an amendment of the RedforEd Bill and stated that as of July 1, 2019, Alternate Project Delivery Methods for education procurement are to be scrapped, and all State Board of Speakers at the July 12th Leading Market Series on the K-12 market sector. Left to right: Education procurements for materials, Ward Simpson, Bonnie Gonzalez, Michael Baer, Rebekah Morris and Howard Kropp. services and construction will be required Not shown: Patrick O’Grady, Catcher Baden. Credit: Rachel Kettenhofen/AZBEX to be awarded to the lowest qualified bidder. (AZBEX, May 08) “What that should tell everybody is… lots • No public opening of SOQs. of points of entry,” Morris said. “If you • Using a 1-step instead of a 2-step process. The announcement of the change came wanted to be active in this space, there’s a afterScottsdale Unified School District lot of ways to get in.” These and other issues raised an import- came under fire for illegal actions with lax ant question discussed further by the pan- oversight, and AZBEX President Rebekah While this data suggests that a company elists: “Would a requirement to low bid fix Morris invited panelists to discuss their would have an easy time entering the these issues?” opinions on the subject and the impact the market, the reality is quite different. The Trouble with Low Bid change will have on districts. The results of Morris’ research showed The answer to that question was a The K12 Market and Current Procurement that 94 percent of all GC contracts are CMAR and some of the issues with an resounding “No” from both panels. The Issues Alternative Project Delivery Method can first panel, comprised of Howard Kropp, Morris began the presentation by giving make it difficult to enter the market. Some director of purchasing for Washington attendees a brief overview of the market of the issues highlighted in her presenta- Elementary School District and Ward with analytics taken from the AZBEX tion were: Simpson, principal for Rider Levett Database. The total size of the market was Bucknall, and moderated by Patrick pegged at $400M-$600M on an annual • RFQ language requires LOCAL relevant O’Grady, managing editor of the Phoenix basis, with no one school district com- experience in the last three years. Business Journal, discussed the implica- manding more than nine percent of the • Procurement timelines do not meet tions of the low bid change to the schools. total market share. the statute. 5 Design/Consultant 36 Horizontal 43 Commercial/Sub-Bids 51 Products & Equipment 7 Development 6 Utilities 18 Maintenance & Alterations 50 Permits Issued 30 © 2018 Arizona Builder’s Exchange, LLC, All Rights Reserved. Reproduction in whole or in part without written consent of the publisher is PROHIBITED. Copyright violations will be enforced to the fullest extent of the law. 2 Tuesday July 17, 2018 Volume 9 Issue 42 OUR AKAs MEET THE TEAM! Arizona Builder’s Exchange REBEKAH MORRIS 1690 N McClintock Dr. PRESIDENT Tempe, AZ 85281 480-709-4190 [email protected] AZBEX NEWS RACHEL KETTENHOFEN VICE PRESIDENT OF OPERATIONS 480-227-2620 Next Up! [email protected] LMS - Hospitality - August 2nd Save the date for the ROLAND MURPHY Public Works Conference in October! EDITOR & COMMUNICATIONS DIRECTOR October 18th, 2018 602-292-2012 [email protected] LYA PARRISH RESEARCH MANAGER TIP OF THE WEEK 602-319-4912 [email protected] Out in the field a lot? TASHA ANDERSON RESEARCHER & ASSISTANT EDITOR Try putting antiperspirant on the bottom of your feet to prevent sweaty, blistering feet! 623-565-4763 [email protected] TAMMY STEVENS MARKET RESEARCHER 480-747-2769 EDITOR’S PICKS [email protected] KRISTEN AMADO Banner, Select to Build 3 Rehab Hospitals MARKET RESEARCHER Baseball Stadium Could Boost CRE Investment 480-459-0525 [email protected] AMANDA MURRAY OFFICE ADMINISTRATOR 480-600-8693 DATABASE [email protected] This icon will be displayed KRISTEN MIRAGLIA on the articles entered EVENTS COORDINATOR into our database. Each 602-326-4728 project will have in-depth [email protected] research and details as well as contacts. OUR AKA’S FROM THE LAST ISSUE: VINTAGE CARS © Arizona Builder’s Exchange, LLC 2018. All Rights Reserved. Forwarding not permitted. 3 Tuesday July 17, 2018 Contents Volume 9 Issue 42 ARTICLES IN THIS ISSUE 1 The Trouble with Low Bid: LMS Talks K12 Procurement Change 1 6 Arizona Eco to Resubmit Granite Dells Proposal 7 Sedona’s Park Place Condos to Add Units 7 Medical Offices Planned in Maricopa 9 Banner Plans 1st of 3 New Inpatient Rehab Hospitals 10 Old Town Scottsdale Plan Could Reach New Heights 11 MedTech Company to Anchor I.D.E.A. Campus in Tempe 7 12 Canyon del Rio Development Draws Closer 13 Ritz-Carlton PV Debut Pushed Back 15 Development Continues Near Peoria Sports Complex 16 ADOT Planning SR 89A Improvements 17 Desert EDGE Fight Muted for Now 18 Gilbert to Auction Land it Overpaid for 9 19 3 Trailheads Getting Improvements in McDowell Sonoran Preserve 20 Location Key for Phoenix Multifamily Development 21 Charter Board Reverses, Lets Public Speak 22 Design-Build to Deliver Almost Half of US Projects by 2021 This table lists articles in this issue that PRIVATE PPS contain Private Project Opportunities. Private Work Opportunities in this Issue Project Page Product Type Owner Design Firm GC Park Place Townhomes, Page 7 Multifamily Miramonte Homes Miramonte Homes Miramonte Homes Sedona Edison Place Medical Offices, Page 7 Office Signal Healthcare LLC RKAA Architecture Not available at press time Maricopa Banner Health Acute Inpatient Taggart Architects / Page 9 Healthcare Banner Health Brasfield & Gorrie LLC Rehab Hospital, Phoenix GWG3 Architecture City of Tempe / I.D.E.A. Tempe, BD Building Page 11 Office SmithGroupJJR Okland Construction The Boyer Company Ritz-Carlton Resort & Hotel, Page 13 Hospitality Five Star Development, LLC Nelsen Partners Layton Construction Paradise Valley Paradise @ P83, Peoria Page 15 Multifamily The OPUS Group Dekker Perich Sabatini The OPUS Group © Arizona Builder’s Exchange, LLC 2018. All Rights Reserved. Forwarding not permitted. 4 Tuesday July 17, 2018 Contents Volume 9 Issue 42 SECTIONS IN THIS ISSUE 11 23 Classifieds 24 Permits Issued 25 Commercial Real Estate News 28 Industry Events 29 Project Solicitations 13 PROJECT SOLICITATIONS 29 Design / Consultant / Planning / Inspection 35 Development 36 Horizontal 45 Utilities 48 Commercial 15 49 Sub-Bid Requests 56 Maintenance & Alterations 62 Products & Equipment 63 Pre-Solicitations 25 WORKERS WHEN YOU NEED THEM! PHOENIX: 602-682-7855 MESA: 480-983-3600 TUCSON: 520-858-0577 © Arizona Builder’s Exchange, LLC 2018. All Rights Reserved. Forwarding not permitted. 5 Tuesday July 17, 2018 Volume 9 Issue 42 The Trouble with Low Bid: LMS Talks New K12 Procurement Change (Cont’d) 1 “Unfortunately, all of my experiences with “It’s About People Behaving Badly.” All speakers agreed that to fix the issue, low bid were not necessarily successes,” So How do we Fix It? districts need to hire a strong procure- explained Kropp. “While the projects ment team and to give them the proper Both panels were also in agreement that still got done, it was company XYZ that education on the procurement rules in they believed the change was an overre- would low-ball the bid, but then would order to alleviate any wrong doing. action to the Scottsdale Unified School change order and by the time the project District situation, and attendees demon- “This knee-jerk reaction to go just to was done there was no way of knowing strated their agreement with the panel by low bid is going to be very painful to the whether or not they were indeed still the applauding as Kropp mentioned he felt the schools,” said Baer. low bidder.” announcement of the change was a pun- Update from the State Board of Education Both Kropp and Simpson agreed that the ishment and not necessarily in the best Alternative Project Delivery Method was interest of the state. Catcher Baden, deputy director of the the better way to go due to the pre-con- Arizona State Board of Education, also “It has nothing to do with alternative deliv- struction services a CMAR is able to pro- gave an update on new procurement rules ery method or low bid. It has to do with vide versus a low bid contractor. that will be coming sooner than July 1, people behaving badly,” said Gonzalez. 2019. Some of these rules include: “By that low bid rule, you have to award During Morris’ presentation early on, it to that low bidder. You have no idea she identified a key reason why the rules • Requirements for licensure and whether or not they have looked at the aren’t always followed, and that’s because documentation for licensure entire scope. Whereas with the CMAR you some people aren’t fully educated on do your job walks, you have your pre-sub- • Rules on conflict of interest them. mittal meetings and they know the scope.” • Gift and reprisal prohibitions Kropp explained. “There are not a lot of education oppor- According to Baden, these rules are tunities for district employees,” said The second panel, comprised of Bonnie expected to come out in early August.