Preparing to Solicit Bids

Volume 5, Chapter 3

• 3.1 CONDITIONS PREREQUISITE TO BIDDING
• 3.2 AVAILABILITY OF FUNDS
• 3.3 CONCURRENT APPROVAL BY FUNDING AGENCY
• 3.4 PROJECT FILE MAINTENANCE
• 3.5 COMPLIANCE WITH STATE AND FEDERAL LAW OR REGULATION

INTRODUCTION

Before bids can be solicited, basic conditions required by University policies, delegations of authority, and federal and state regulations must be met. These conditions apply to competitive and informal bidding and negotiated contracting. (See Permission to Solicit Bids, RD3.1.)

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3.1 CONDITIONS PREREQUISITE TO BIDDING

References:

Before soliciting bids for any construction contract, the University's Designated Administrator must ensure that all of the following conditions are met:

1. The commitment of funds, the scope of construction, and equipment to be acquired conform to the project scope and cost itemization in the current approved Project Planning Guide or conform to the project description in the case of minor capital improvement projects.
2. The bidding documents conform to those in the Facilities Manual or modification to the documents are approved by the Office of the General Council and Office of the President (see 2.2).
3. For state-funded projects, the bidding documents have been approved by the Department of Finance and State Public Works Board, as applicable.
4. Funds are available.
5. The project complies with the most recent version of the "Amended University of California Procedures for Implementation of the California Environmental Quality Act."
6. The documents conform with fire and life safety requirements of the California Building Standard Code.
7. Independent certification is made that the design meets or exceeds energy regulations and standards (see FM6:5.2.1).
8. The project complies with the provisions of the California Coastal Act of 1976, if appropriate.
9. The documents conform with the University's seismic safety policy.
10. Procedures for providing disabled access are followed (see FM3:4.1).
11. Drawings and specifications for licensed hospital facilities are approved and stamped by the Office of Statewide Health Planning and Development (OSHPD). OSHPD approves documents for the design and details of architectural, structural, mechanical, and electrical systems.
12. Drawings and Specifications for state-funded non-hospital related projects are approved and stamped by the Division of the State Architect for disabled access requirements.
13. State review of any required environmental document has been completed.

(See FM3:4 for more information on code compliance in regard to project design and construction.)

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3.2 AVAILABILITY OF FUNDS

Before bids are solicited, the University accounting officer must certify that project funds are available in the plant account approved for the project. Signature for certification of fund availability is included on the Pre-Bid Capital Improvement Budget. The source and amount of funds must match the most recently approved Capital Improvement Budget (CIB) for the project. The approval authority for CIBs depends on the fund source and size of the project. Contact the Office of the President to determine authority.

3.2.1 State-Funded Projects

For state-funded projects, funds are frequently transferred from the state to the University in increments. For such projects, formal action by the State Department of Finance to "release" funds to the University and authorize proceeding with work is sufficient basis for signifying availability of funds.

3.2.2 Non-State-Funded Projects

Most non-state-funded projects must have funds physically transferred into the plant account to proceed with solicitation of bids. Exceptions are discussed below.

For externally financed projects, the Treasurer's Office must notify the Facility that funds are available. Regents' approval of external financing is not sufficient, as it does not mean that funds are immediately available.

Gift pledges (not yet-in-hand) are not an appropriate source of funds for the purposes of bid solicitation. Prior to solicitation of bids for a project with outstanding pledges, the following must occur: (1) The Regents have approved authorization for a standby loan and the Treasurer's Office has notified the Facility that funds are available, or (2) a cash advance from another lawfully available source is temporarily transferred into the plant account and reimbursed as gifts are received.

Some federally-funded projects require that bidding documents be reviewed by the appropriate federal agency for permission to advertise for bid. Refer to the agency agreement for the specific requirements.

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3.3 CONCURRENT APPROVAL BY FUNDING AGENCY

3.3.1 State-Funded Projects

Capital projects funded by State capital appropriations require the submittal to Office of the President of the final, 100% complete bid documents package with all signatures and approvals by the designated Campus Fire Marshall or Division of the State Architect/Access Compliance. The project as detailed by the documents must be within approved scope, budget and schedule. The Facility submits the completed bid document package, including drawings and specifications, with supporting documentation that includes explanatory cover letter, project description, project Capital Improvement budget, detailed cost estimate, component cost summary, area reconciliation, project schedule, and record of final EIR action (if pertinent) to the Office of the President for review and processing. Any bid alternates must be explicitly identified; alternates may not be bid legally without approval of the individual alternates. Depending on the source of the state funds, these submittals may be approved by the State Department of Finance (DOF) or State Public Works Board (SPWB) (if the project is funded with lease-revenue bonds), or the Office of the President (streamlined projects). The project may be put out to bid upon the availability of funds (construction funds are "committed" by legislative authority at the time of bid, but are released by the state only upon approval to award a contract). See 3.1 for a list of other constraints. If the lowest responsive and responsible bid is within budget, the construction contract may be awarded. Contact Capital Planning at the Office of the President for more detailed and updated information regarding submittal documentation and process or for clarification as necessary.

3.3.2 Lease-Revenue Bond-Funded Projects

Capital construction and capital equipment purchases for projects funded with State lease-revenue bonds (in which the State owns the facility and leases it to the University) require steps in addition to those outlined in 3.3.1 above. Prior to approval of Preliminary Plans, the Facility must first prepare and transmit to the Office of the President a legal description and site survey and these must be approved by SPWB. Bidding may occur prior to when Lease Revenue Bonds (LRBs) are sold, but award can only occur after a successful LRB sale. Prior to obtaining approval of the bid document package submittal, a proposed site lease, facility lease, and equipment lease (if applicable), are prepared by SPWB and its bond counsel, but only after a bond sale is initiated; Regents authorization must be submitted to the SPWB for approval. Regents item requesting authorization to prepare and execute the leases and agreements must be approved prior to awarding a contract.

The Office of the President coordinates and submits the necessary documents, in parallel with the bid document package submittal, to SPWB for review and action. The bid document package for a lease-revenue bond-funded project must be approved by the DOF. At conclusion of the bidding phase, the Facility reports the bid results and apparent low responsible bidder to the Office of the President for transmittal to the DOF with a request for approval and authorization to award the contract (see 8.2.1). Upon receipt of this authorization and notification that bond proceeds are available, the contract can be awarded and work can proceed.

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3.4 PROJECT FILE MAINTENANCE

The bid document package as submitted to, and approved by the State, must be the same as the bidding documents issued and must become part of the Facility's project file [see FM3:6, and 11.1.3).

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3.5 COMPLIANCE WITH STATE AND FEDERAL LAW OR REGULATION

On projects funded in whole or in part by the federal government, the rules of the funding agency must be reviewed for competitive bidding and public advertising requirements. Normally, federal agencies require competitive bidding with public advertising only on projects with estimated construction costs exceeding $10,000. If federal requirements are more restrictive than University policy, the more restrictive requirements must be followed.

If the funding agency requires an affirmative action program as a condition for funding, then an affirmative action program that is in compliance with the funding agency's requirements must be included in the bidding documents and the contract documents.

3.5.1 American Recovery and Reinvestment Act of 2009 (ARRA)

If the project is funded in whole or in part through the American Recovery and Reinvestment Act of 2009 (ARRA), see following guidelines for compliance:

For all grant-funded construction projects, whether new construction, renovation, maintenance, repair or upgrade, the terms of the grant may add compliance requirements different from those of the University's "typical" project.  Federal grants funded as part of ARRA (the American Recovery and Reinvestment Act of 2009) entail a separate set of compliance requirements, some of which vary depending on the funding agency (NIH, DOE, NSF, etc.).

While many ARRA-funded University projects have now been completed, some are still in process and others have not yet gone out to bid.  The purpose of these guidelines is to suggest those requirements of ARRA that might otherwise be overlooked so that University staff can determine their applicability to specific projects, obtain more detailed guidance and comply fully with all requirements.

All requirements flow down from the grant recipient to its contractors and subcontractors (collectively "vendors") who receive more than $25,000 in ARRA funds.  Longer record retention may be required.

Highlights of key requirements of ARRA include (not an exhaustive list):

Reporting

Quarterly reporting of specific data elements is required on the use of all funds received, including the number of jobs created and/or saved.

CCR Registration

The University and its vendors (its contractors and subcontractors) must all register in the CCR (Central Contractor Registration) database at https://sam.gov/.  Each entity needs a DUNS number to register.

Buy American

Unless an exemption applies, the project must use American iron, steel and manufactured goods.

Davis-Bacon Wage Rates

The Davis-Bacon Act requires that workers not be paid less than the applicable wage determination, which may be found at https://sam.gov/.  (If California prevailing wage is higher, the higher wage must be paid.) Certified payrolls must be checked for compliance and records must be retained as required.  (LCPtracker https://lcptracker.com/or similar software can be helpful.)

Segregated Accounting

ARRA funds must be tracked, accounted for and reported separately from all other project funds.

Waste, Fraud and Abuse

The University and its vendors have an affirmative duty to report false claims and other misconduct.

Whistleblower Protection

The protection extends to employees of the University and its vendors.

Public Information

Information about the use of funds will be posted at https://www.ed.gov/ based on submitted reports.

Information about ARRA requirements must be included in advertisements for bids, bid packages and contract documents.  Specific information must be posted at the job site.  Failure to comply with the requirements can result in loss of funds.

The laws and regulations encompassed by ARRA are complex.  Specific guidance should be obtained from the campus sponsored projects or contracts and grants office, in consultation with the principal investigator of the project and the contract and grants officer with whom he or she has been working.

3.5.2 Prevailing Wage Determination Date

The University requires the payment of prevailing wage on certain construction and maintenance contracts. (See 14.2) For all project delivery methods except CM at Risk, the prevailing wage determination date for the Project is the first date of Project advertisement for bid. In a CM at Risk contract, there are two dates at which the prevailing wage may be set. If there are subcontractor bid packages (including Design Build subcontractors) or any site or construction work in the initial bid advertisement for the CM/Contractor, the determination date for prevailing wage for the entire Project is that of the initial advertisement. If there are no subcontractor bid packages or site or construction work in the initial bid advertisement for CM/Contractor, the determination date for prevailing wage for the entire Project is that of the first subcontractor trade package advertisement.

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Revised October 8, 2019 (Change No. 19-XXX-X)

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