Materials Management Office John White Materials Management Officer and State Engineer 8037370768 jwhitemmoscgov What is Construction The process of Building a public infrastructure ID: 633548
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Slide1Slide2
What
Procurement Managers Need to Know About Construction
Materials Management Office
John White –
Materials Management Officer and State
Engineer
803-737-0768
jwhite@mmo.sc.govSlide3
What is Construction?
The
process
of:
Building
a public infrastructure
facility,
Altering
a public infrastructure facility
,
Repairing
a public infrastructure facility
,
Remodeling
a public infrastructure facility
,
Improving
a public infrastructure facility
,
or
demolishing
a public infrastructure
facility.
See
§
11-35-310(7)Slide4
What is a Public Infrastructure Facility?Slide5
Infrastructure:
The basic facilities, equipment, and installations needed for the functioning of an organization.
The American Heritage Dictionary
, Second College Edition, 1985Slide6
Facility:
Something (such as a building or large piece of equipment) that is built for a specific purpose.
Merriam-Webster Dictionary
, online editionSlide7
Includes
Public structurePublic building
Public improvements of any kind to real propertySlide8
When Does Work on a Public Infrastructure Facility Not Constitute Construction?
Routine operation
,
Routine repair
, or
Routine maintenance
to an existing
public
infrastructure facility.Slide9
So - What Does Happen When Construction and Non-Construction
Intersect?Slide10
When faced with the question, is it construction or non-construction consider some procurement and non-procurement regulations that apply to construction and the policy behind themSlide11
Performance & Payment Bonds
Performance & payment bonds required for construction contracts over $50,000 [11-35-3030(2)]
Payment bond
required for construction contracts over $50,000 [
29-6-250]
Why?Slide12
What lien rights would the contractor have if the procurement were conducted in the private sector?
See 29-5-10 et seq.Slide13
Licensing Laws
Title
40: Professions and
Occupations
Chapter
3: Architects
Chapter 10: Fire Protection
Sprinkler Systems
Act
Chapter 11:
Contractors
Chapter 22: Engineers & Surveyors
Chapter 79: South Carolina Alarm System Business
Act
Slide14
Building
Codes
Title 10, Chapter
1,
Sect.
180
Title 6, Chapter 9, Sect. 110(A)Slide15
In Addition to the Foregoing, Consider the Predominate Factor of the Procurement
Goods & Services or Construction?Slide16
Example
Solicitation for KI Panels Installed
Case No.: 2009-020
http://procurement.sc.gov/webfiles/OSE_main/Protests/Langston_-_
SCC.pdfSlide17
Facts
Moveable Wall Panels
No Screws or Bolts Attach to Building
Limited Tools RequiredSlide18
Facts
Factory installed electrical an integral part of specified panels
Electric pigtails connect to building electrical
LLR opines that a general contractors specialty license of interior renovation is required to install panels
Building Code applies to moveable walls over 5’ – 8” tall
An architect prepared the plans & specificationsSlide19
Facts
Cost of electrical work = $4,850
Cost of installation
~
$
18,000
Cost of wall panels ~ $103,000Slide20
Is it
construction or a procurement of goods?Slide21
Well - Is it an Improvement to Real Property?
Consider
factors such as whether the item is attached in such a manner that its removal will damage the building (e.g. screw holes in a floor, wall, or ceiling); whether the character of the article is such that it is normally considered to be a part of the real property (e.g. pews in a church or wall cabinets in a kitchen); and whether the annexing party intended the article to become a fixture.
Hyman v. Wellman Enters.
, 337 SC 80, 522 SE2d 150 (Ct. App. 1999);
Carson v. Living Word Outreach Ministries, Inc.
, 315 SC 64, 431 SE2d 615 (Ct. App. 1993);
Carjow
, LLC v. Simmons
,
349 S.C. 514, 563 S.E.2d 359 (Ct. App. 2002).Slide22
Predominate Factor Test
“Under this test, courts evaluate transaction to determine whether the predominate factor … is the rendition of service with goods incidentally involved, or is a transaction of sale, with labor incidentally involved.”
U.S. v. Southern Contracting of Charleston, Inc.
, 862
F.Supp
. 107 (1994); See also
Plantation Shutter Co. v. Ezell
, 492 S.E.2d 404 (S.C. Ct. App. 1997).Slide23
So – What Is the Answer to Our QuestionSlide24
What about a painting
contract over $50,000?Slide25
Bottom Line
If in Doubt AskSlide26
A Construction Procurement Called a Procurement of Goods & Services is Still a Construction Procurement and Must Comply With All Laws Applicable to Construction ProcurementsSlide27
A Procurement of Goods & Services Called a Construction Procurement is Still A Procurement of Goods & Services and Must Comply With All Laws Applicable to the Procurement of Goods & ServicesSlide28
So Its ConstructionSlide29
Next Step – Hire the Architect Engineer
Qualification based selection – Section 11-35-32 et seq.
40-3-300
(i.e. Licensing Law) Prohibits Architects from competing on price
Why not use low bid?Slide30Slide31
Hyatt Regency Hotel Walkway Collapse
114 Killed216 Injured
1984 US House of Representatives Subcommittee report on Structural Failures in Public Facilities
One of six critical factors in causing the structural failures at the Kansas City Hyatt Regency was the selection of architects and engineers on low bid
Slide32
Specifications Prepared by Architects
Must be Non-Restrictive: 11-35-2750Slide33
Next Major Step
Construction Services Procurement – Competitive Sealed Bidding
11-35-1520+/-Slide34
The following sub-sections of 11-35-1520 Apply
(1) Condition for Use
(
2) Invitation for Bids
(
3) Notice
(
4) Receipt and Safeguarding of Bids
(
5) Bid OpeningSlide35
The following sub-sections of 11-35-1520 Apply
(7) Correction or Withdrawal of Bids
(
8) Discussion with Bidders
(
9) Tie Bids
(
13) Minor Informalities and Irregularities in BidsSlide36
Sections of
11-35-1520superseded
by Article 9
(6) Bid Acceptance and Bid Evaluation
Subcontractor
listing
(See 11-35-3020(b))
(
10) Award
Notice
of Date and Location of Posting
(See 11-35-3020(c))
Must Wait 10 if > $50,000
If only
one
bid must still Post but do not wait
(
11) Request for Qualifications
(See 11-35-3023)Slide37
Provisions of Article 9 Modifying Competitive Bidding Under Article 5
11-35-3020(d
) Negotiations after Unsuccessful Competitive Sealed Bidding supersedes 11-35-1540
11-35-3021
Subcontractor Substitution
11-35-3023 Prequalification
11-35-3030
Bond & Security
11-35-3035
Errors and Omissions Insurance Slide38
Provisions of Article 9 Modifying Competitive Bidding Under Article 5
11-35-3040 Contract Clauses and their
Administration
11-35-3070 Change Orders
11-35-3245
Architect-Engineer, or Construction Manager Performance of Other WorkSlide39