Do the waive

Wisconsin's Building Commission has its own limited-bidding game plan

By Jeremy Harrell

Well-known fact: Legislators, lobbyists and trade associations are waging a high-profile battle over the fate of design/build and limited-bidding for public projects.

Sen. Fred Risser D-Madison

Little-known fact: The State Building Commission has for 25 years authorized design/build, negotiated contracts and single-bid prime contractors in the construction of public projects both large and small.
The folks wrangling in Madison might want to take a few moments to look up from the negotiating table to peek at the Building Commission's use of alternative construction processes. The commission's approach to waiving public-bidding laws, its members said, is to proceed with caution, act on reason and respond to the specific needs of every project.

"The only time the Building Commission should utilize design/build is when the staff can demonstrate that there's no alternative," commission member Rep. Daniel Vrakas, R-Hartland, said. "It should be used only in exceptional situations."

Those exceptional situations are, by and large, determined by three factors: size, time and ease. And even when those factors are in evidence, the commission still holds some reservation for deviating from traditional design/bid/build.

The Legislature granted the commission the permission to waive public bidding as part of the 1975 budget bill. In the 25 years since, the commission has invoked the waiver approximately 125 times - a paltry number when compared to the thousands of projects that have appeared on commission agendas.

Of those 125 projects, only on a handful did the commission vote to proceed with design/build or some other form of negotiated contract. And of that already small sum, most were projects costing less than $1 million.

"We try to restrict the waiver to small jobs," said Sen. Fred Risser, D-Madison, who has served on the Building Commission for more than 30 years. "The idea is that it becomes to the advantage of the state, the contractor and all the people involved."

Single-source advantage

Wisconsin is one of the few states that requires separate contracts for what ordinarily falls under the jurisdiction of a general contractor. If the state wants to build a new forest-ranger shed for the Department of Natural Resources, it must by law bid out individual contracts for the carpentry, the electrical, the HVAC, the cement foundation, and all other aspects of construction for an otherwise unremarkable building.
By waiving the state bidding requirements, the Building Commission can bid out the project to general contractors who take the various subcontracts into account when making their bid to the Building Commission, commission Secretary Bob Brandherm said.

"In general, we like to have a single source of responsibility for smaller projects," he said. "But just because we're waiving the bidding statute doesn't mean we're waiving competitive bidding."
On those smaller projects - which tend to be no-brainers like sheds, storage facilities and bathrooms at state parks - the commission will sometimes award design/build contracts to make the process even more simple and direct, Brandherm said.

The commission's frequent decision to waive the bidding requirements on some projects has to some degree come in response to complaints from contractors, Risser said. State contracts entail a stack of paperwork, and the commissioners have heard builders gripe that small jobs aren't worth the hassle.
"We've had a couple of cases where bidders wondered if they were treated fairly," he said. "The waiver is basically used where it's figured that bidding the contracts is minor. In other words, it doesn't pay to bid out to multiple contractors."

... And step on it

As for the larger projects that employed negotiated contracts or design/build, all were the result of time considerations or some perceived specific need, Brandherm said.

Take, for example, the Pettit Ice Center on the state fairgrounds. The state found itself in the awkward position of having to build a world-class ice rink in 10 months because a private donor - who put up nearly a third of the $13.5 million price tag - insisted the project be completed by New Year's Eve of 1991. Bidding the project out would have cost the state the money it needed to build the project in the first place.
"It's much faster to develop a waiver because the statutory process for developing bids takes longer," Risser said. "Sometimes there's a presumed need to speed the process up."

Going with design/build on a large project when there's no time crunch works against the interests of the state, Brandherm said. Private owners using design/build to speed up the pace of a project tend to see their buildings' usefulness in terms of its profit margins. They can cover the cost of construction with seven to 10 years of occupancy, and sometimes they'll build their facilities with that in mind. Wisconsin's government, as Brandherm put it, will most likely be around in another 50 years, and its buildings better be, as well.

"Each owner has different criteria for deciding what needs to go into a building," he said. "You have to compare the public's need for longevity with the private sector's need for speed."

Vrakas said the state is obliged to competitively bid out the most expensive and complicated projects because it might otherwise end up paying more. The relative slowness of the competitive bid process allows those vying for the contract to iron out potential problems and associated cost increases.

"When a project is large and complex, the Building Commission has a responsibility to bid the project out," Vrakas said.

Commission members also said they have to take design factors into account when voting to proceed with a delivery system like design/build. There's the case of the Government Executive Facilities in Madison. The oversized blocks of poured concrete and light brick were constructed on design/build contracts at a time when Madison general contractor Marshall Erdman, an early proponent of the delivery method, served as a citizen member of the Building Commission.

"The state went design/build on the GEFs, and the state didn't have its hands on details like design and selection of materials," Brandherm said.

For Vrakas, letting go of aspects of a building's design is not, in most cases, worth the oft-stated benefits of design/build.

"One of the potential problems with design/build is you lose control of one step in the design process," he said.

As the people who control the state's construction wallet, members of the Building Commission said they weren't thrilled by the idea of tinkering with the design/bid/build tradition.

Rep. Robert Turner, D-Racine, said he worried that going around the statutory bidding laws would shut minority contractors out of the state's building projects.

"I've always found that the bidding process is the only way to include minority contractors," he said. "Competitive bids make sure there's equity among all the contractors."

Put another way, with the waiver, the State Building Commission holds public construction's trump card in its hand, but no one should expect the commission to play it on whim.

"I think it's important we not expand our usage of the waiver beyond what we've done to this point," said commission member Sen. Robert Wirch, D-Pleasant Prairie. "Only in very certain areas is it warranted."

Harrell is The Daily Reporter's Madison Bureau writer.