purchasing issues for municipal construction projects in connecticut january 21, 2015 jeffrey m....

Purchasing Issues for Municipal Construction Projects in

ConnecticutJanuary 21, 2015

Jeffrey M. Donofrio, Ciulla & Donofrio, LLP

INTRODUCTIONUnderstand the chosen project delivery

method;No “one size fits all” delivery system for

successful construction projects; Understand/identify the roles of the

respective members of the construction team;Understand/identify the applicable legal

requirements: local, state, agency-specific, federal and any other third-party funding sources


Project Delivery MethodsDesign-Bid-Build: Owner/Architect/CMa;

Owner/Architect/CMc (a/k/a CMR); Owner/Architect/GC; Owner/Engineer/Contractor; Owner/Contractor

Design-Build The rights, duties, responsibilities and

remedies applicable to all forms of project delivery are primarily determined by the contract documents, not by the label the parties use.


Local LawsMake sure your ITBs, RFQs, RFPs, etc. comply

with the CURRENT version of your Charter, Code, Regulations, Ordinances and Purchasing Policies

Who in your Town is responsible for ensuring that the Purchasing/Finance Department is immediately informed of any relevant changes to local laws?

Definitions: ITB, RFQ or RFP should set forth definitions of relevant terms (i.e., as defined by your local laws).


Contents of Bid DocumentsStatement of the Town’s right to reject all bids,

waive informalities or defects and award to other than the low bidder if deemed to be in the Town’s best interest by the Town(IF PERMITTED BY LAW!).

Statement of the Town’s right to and process for disqualification of bidders/how Town determines whether a bidder is responsible.

Define selection criteria and process.Identification of the criteria to be applied by the

Town in determining whether a bidder is qualified/identification of minimum qualifications.


Contents of Bid DocumentsProvide Bidders with pertinent info re your ethics

code(s) and require certification that they have read it, agree to be subject to it and comply.

Provide Bidders with pertinent “conflict of interest” disclosure requirements and require certification of compliance.

Advise Bidders of the Town’s right to reject any bid by a joint venture unless each entity to such joint venture satisfies the Town’s requirements (i.e., bonding, insurance, responsibility, qualifications).


Contents of Bid DocumentsProvide Affidavit of non- collusion for execution.Provide any Standard Terms and Conditions

applicable to bids/proposals/quotations in your Town.Provide any project-specific Terms and Conditions

applicable.Clearly identify the required format for bids (provide

bid form) or proposals (provide proposal form).Inform bidders of FOIA applicability: per C.G.S. §1-

210(b)(24), responses to any RFP or bid solicitation are exempt from FOIA until the contract is executed or


Content of Bid Documentsnegotiations for the award of the contract have ended, whichever occurs first. CEO of public agency must certify that the public interest in disclosure of the proposal or bid is outweighed by the confidentiality of the response, record or file.****Be certain to respond within 4 business days****

Have bidders agree that by submitting bid/proposal, they agree to be subject to C.G.S. §1-200 et seq.


Contents of Bid DocumentsSet forth a clear protocol for requests for

information (“RFI”), including deadline and response protocol.

Advise bidders of prohibition against ex parte communications and disqualification for violation.

Identify whether any Town-based business ordinance is applicable (if your Town has one).

Identify circumstances, if any, under which bids can be withdrawn and deadline for w/drawing bids.

Identify period during which bids must remain in effect.


Contents of Bid DocumentsIdentify requirements with respect to (a)

correction of bid mistakes discovered prior to opening; (b) correction of mistakes discovered after opening but prior to award; (c) mistakes where intended correct bid is evident; (d) mistakes where intended correct bid is not evident; and (e) mistakes discovered after award.

Provide form upon which bidders disclose all past and pending mediation, arbitration,litigation and disqualification.

Provide form for references.


Contents of Bid DocumentsClearly state all applicable tax exemptions (e.g.,

sales and use).Identify policy for issuance of addenda and provide

space on bid form for bidders to acknowledge receipt of addenda.

Explain how formal bid openings will be conducted, identify bid opening date, time and location.

State that late submissions will not be accepted.Identify payment and performance bond

requirements and applicability of Little Miller Act.Identify insurance requirements.


Contents of Bid Documents Identify applicability of prevailing wage statute. Identify applicability of DAS prequal statute (4b-91j); ever denied?Statement as to applicability of and compliance with non-resident

contractor 5% tax for contracts and change orders (see current version of C.G.S. §12-430(7)):

• 2 classes of nonresident contractors: verified and unverified;• Unverified prime or general contractor must file singe surety

bond for 5% of entire project with DRS when contract for entire project is $250,000 or more. Must obtain proof that prime/GC has filed bond;

• Prime/GC must hold back 5% of sub $ until sub obtains and furnishes Form AU-968;

• Compliance relieves you of w/holding, sales or use tax liability on consumables but not services.


Contents of Bid DocumentsIdentify policy for alternate bids.Customize performance bonds!Identify applicable drawings/plans and

specifications and how potential bidders can obtain same.

Identify requirement that bidders familiarize themselves with the site, do their own due diligence and disclaim any liability for anything and everything that bidders could have learned through reasonable investigation.


Contents of Bid DocumentsIdentify timeline/deadlines/milestones for

both procurement and the specific project.Identify the specific scope of

work/services/materials/equipment being procured.

Describe the project’s intended function and occupancy, general requirements for the project andspecial requirements for the project, including safety and security concerns/protocol.


Contents of Bid DocumentsDescribe any other projects in process or

planned for the same site or timeframe which might affect the project scope, including access.

Describe completed studies, surveys and any other work relevant to the project and available to potential bidders but emphasize bidders required to do own due diligence.

Identify any requirements for inspection of work in place.


Legal RequirementsIdentify legal notice publication requirements

(both in terms of where published (newspaper, online, Town web site) and how much notice is given).

Identify Bid Bond requirements.Provide EEO and Affirmative Action Plan forms.Provide Form AU-766 (guaranty bond) for non-

resident contractors.Provide Form REG-1 (business taxes

registration application for Connecticut DRS).


Legal RequirementsProvide form of Notification of Receipt of

Certificate of Compliance by Non-Resident Contractors.

Provide form AU-764 (Deposit by a person doing business with a non-resident contractor).

Provide insurance requirements in the form of a sample COI.

Identify any set asides for MBE, SBE and WBE, as well as residents.

Inclusion of contractor’s MBE/SBE/WBE utilization form and affidavit, if applicable.


Legal RequirementsIdentify any required licenses/certifications.State that successful bidder must file and

receive an approved affirmative action plan by the CHRO prior to commencement of construction.

Provide proposed contract and require bidders to certify acceptance of contract terms with bid.

Affirmation by bidder that it will comply with all federal and state safety standards and regulations.


Legal RequirementsIdentify any officials or agencies with whom

services must be coordinated and any special requirements regarding coordination, inspection or approval of work.

Identify any activities that are prohibited (e.g., demolition by blasting, work before or after a certain time, enviro abatement with kids in the building).

Statement as to hazardous materials.Identify any special security or safety

requirements (check Safety and Security Plan).


Legal RequirementsIf prequalification required by State law,

prequalification certificate and an update (bid) statement w/ bid; performance evaluation form (50% project completion and 100% completion),.

Provide form for identification of any violations of any OSHA standard, order or regulation, promulgated pursuant to OSHA, during the three years preceding the bid; criminal convictions related to injury/death.

Identify any liquidated damages and any milestones to which liquidated damages are tied.


Bid ProtestsLack of StandingStanding obtained by alleging fraud,

corruption, favoritism or other conduct undermining the integrity of the public bidding process

QBS-based selection methods and preserving the record


The Prime ContractMultiple boilerplate/standard construction

management agreements exist. Standardized agreements reflect the drafter’s

perspective of the typical priorities on a commercial construction project.

Many provisions may be applicable and acceptable for use on most projects, however, merely adapting one form or another is a perilous approach to contracting.

Every project has its own set of issues, concerns, legal requirements and potential problems.


The ContractAll parties are well served by, at a minimum, having the

contract documents reviewed by competent construction law counsel. Not nearly as expensive as you might expect!!

Parties often seek as many exculpatory clauses as possible with little regard for the current state of the law. Parties focus so intently upon such clauses that they overlook less conspicuous but equally significant provisions.

The goal is not to make the owner/CM relationship fit within someone else’s definition, but to develop clear, unambiguous contract documents that define the parties’ relationship and expectations in an accurate manner.


The Contract: Key ProvisionsFiduciary Duty: CM/A vs. CM/RDispute Resolution Process: Multiple

concernsStandard of CareProject Budgeting/Cost EstimatingProject ScheduleResponsibility for Design


Key Contract Provisions (cont.)Responsibility for DesignRelationship with Trade ContractorsProject SafetyInsurance and BondsImplied Duties


Architect’s Duty on Public School ProjectsPursuant to Connecticut General Statutes

§10-290e, a contract for independent architectural services for a school project receiving state assistance must require the architect to perform services at the highest prevailing applicable professional or industry standards and may not limit the liability of the architect for errors and omissions related to the performance of its services.


Architect’s DutiesExpress duties arising from the particular

contractual and/or legal relationship that an architect enters into on a given project.

Implied duties include the degree of skill to be exercised by the architect in carrying out its duties. To reiterate, the degree of skill required, in the absence of a statute or contract provision to the contrary, is that of an ordinarily competent architect professing to have that skill. Expert testimony is necessary in order to establish a breach of the duty of care by a design professional.


Risk Management “Up Front”Design professionals must exercise great care

in allocating risks and responsibilities via contract. The desire to obtain work and/or please clients should not result in commercially unreasonable contracts. Many owners do not have prior experience with major construction projects and do not fully understand the design professional’s role during the construction phase. Expectation management and candid, timely communication are essential to achieving a good outcome.


Legal Rights and Duties: Subs and SuppliersSubcontractors often depend on the performance

of the GC or CM = if the CM/GC is unable to properly manage the project (i.e., schedule, coordinate, sequence or supervise the work and other subs), the subcontractor may be adversely impacted.

Subcontractor’s duties, rights and remedies will be determined, in large part, by its subcontract agreement.

Prime agreement between the owner and the CM/GC often incorporated by reference into the subcontract.


SuppliersTypically, suppliers do not obtain work through the

public bidding process and do not provide labor to the project.

Suppliers often rely upon P.O.s with T&C that are advantageous to the supplier – perhaps even existing credit agreements that the contractor has long since forgotten it signed (with personal guarantees).

Suppliers are at the bottom of the food chain in terms of the payment process and are thus dependent upon the upstream contractors for payment.


SuppliersSupplier payment bond claims and

mechanic’s liens tend to be more simple to prosecute than subcontractor claims. However, establishing the last day that materials were delivered to the job site AND that there is a lienable fund can be a challenge.


Key Subcontract ProvisionsWorkmanlike manner requirementIndemnification/Hold Harmless No Damages for Delay ProvisionsDisclaimers of LiabilityLimitation of Liability ProvisionsLiquidated Damages ProvisionsRisk of LossInspection and TestingImplied Warranty of Plans and Specs


Key Subcontract Express WarrantiesGuaranteesDispute ResolutionForum/Venue SelectionPJR WaiversJury WaiversNotice RequirementsConditions Precedent to Litigation


ConclusionThis was a brief overview; I teach ½ day and

full-day programs on many of the topics we crammed into 90 minutes.

Never take for granted that the law has not changed.

Communication and advance planning is crucial.

No such thing as a “stupid” question!Call me or e-mail if I can be of assistance!


purchasing issues for municipal construction projects in connecticut january 21, 2015 jeffrey m....

Documents

ciulla donofrio

llp slide

bid form

bid solicitation

contract documents

towns requirements

local laws

forms of project delivery