School District Bidding Requirements Under North Dakota Law NDSBA Fall School Law Seminar Nicholas C. Grant Ebeltoft. Sickler. Lawyers.

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1 School District Bidding Requirements Under North Dakota Law 2018 NDSBA Fall School Law Seminar Nicholas C. Grant Ebeltoft. Sickler. Lawyers. PLLC

2 Topics What types of contracts have to be submitted to public bid? Exceptions Special Considerations What we are NOT going to cover Teacher and Administrator Contracts

3 What can a school board do? Powers of School Board N.D.C.C The board of a school district may (among other thigs): Acquire real property an construct school buildings and facilities Purchase, sell, exchange, and improve real property Lease real property for a maximum of one year (Exception: career and technical education facility constructed with funds acquired under NDCC Ch ) Purchase, sell, exchange, improve, and lease for up to one year equipment, furniture, supplies, and textbooks Independently or jointly with other school districts purchase telecommunications equipment or lease a telecommunications system or network

4 General Bidding Requirements Even if exercising its authority under N.D.C.C , a school board must still comply with N.D.C.C when entering into contracts This statute requires, with a few exceptions, that the board of a school district may not enter a contract involving the expenditure of an aggregate amount greater than twenty-five thousand dollars unless the school board has given ten days notice by publication in the official newspaper of the district, received sealed bids, and accepted the bid of the lowest responsible bidder.

5 What is a contract? Contract is not defined in N.D.C.C Look to other North Dakota law for definitions: A contract is an agreement to do or not do a certain thing N.D.C.C Leasing of real property is a contract by which one gives to another the temporary possession and use of real property.... N.D.C.C Summary: If a school board is going to spend more than $25, in aggregate, then it is a contract, even if it is a lease (including leases of personal property)

6 Exceptions The requirements that expenditures in excess of $25,000 in aggregate be bid has the following exceptions: Personal services of school district employees Textbooks and reference books Articles not sold on the open market Patented, copyrighted, or exclusively sold devices or features Building construction projects under chapter School transportation services under section Vehicle fuel purchased under section Heating fuel purchased under section Purchase of a used motor vehicle (including a school bus) intended primarily for transportation of students Cooperative purchases with office of management and budget The purchase of products from prison industries The purchase of products from work activity centers

7 What if the school board violates the bidding requirements? NDCC (3) states that a board member who participates in a violation of this section is guilty of a class B misdemeanor. Don t be the first one!

8 Exceptions to N.D.C.C Vehicle and Heating Fuel Governed by N.D.C.C The school board must publish, at least once per year, in the official newspaper of the district, information regarding the registration of motor vehicle and heating fuel vendors. The board shall purchase vehicle and heating fuel only after seeking written quotes from all vendors who registered with the district for that school year. Still have to advertise and receive quotes! School Transportation Services N.D.C.C. Ch governs the transportation of students N.D.C.C requires that the board, before the beginning of each school year, to contract for the provision of transportation services during the school year. Except when renewing an existing transportation services contract under N.D.C.C , the board must: Provide notice of intent to contract by publishing the time and place for submission of sealed bids in the official newspaper of the district at least ten days prior to the submission date

9 Transportation Contracts (cont.) The notice must: Include the route covered by each contract; Provide that the board reserves the right to reject all bids; Provide that each successful bidder must submit in a separate envelope a bond in an amount set by the board, provided that the bond must be at least five hundred dollars; Provide that the bond must be conditioned for faithful performance of the duties set forth in the contract; and Provide that any bids must describe the vehicle and name the individual who will operate the vehicle If the vehicles are privately owned, the contract may not exceed seven years The board must award the contract to the lowest responsible bidder, meaning: Furnishes a bond approved by the board; Agrees to use a vehicle which meets the standards imposed by the superintendent of public instruction, and which are safe, comfortable, and suitable ; and Identifies individuals who, in the opinion of the board, are competent and responsible to serve as drivers The board cannot enter into a contract with a member of the board; but, member of board may serve as driver

10 Contents of the Contract Superintendent of public instruction shall prepare a standard transportation contract form The contract MUST: Provide that no vehicle other than that described in the contract be used unless a change is authorized in writing Provide that only the individual named in the contract may operate the vehicle unless a change is authorized in writing Include the routes established by the board and which are to be covered Set compensation Set process for equitable adjustment of compensation

11 Exception to N.D.C.C A contract for the transportation of students, originally bid and let to a contractor, may be renewed by: Direct negotiations between the board and the contractor; or Upon sealed bids If renewed via direct negotiations, board must: Publish notice in the official newspaper of the district, at least 30 days before the date of renewal, and shall make a good faith effort to obtain at least two written quotes Board shall maintain all quotes for at least one year quotes are public. If any written quotes are received, the board may directly negotiate a contract, provided: The board shall conduct a public meeting regarding the contract; The board must provide seven days notice of the public meeting; The public can appear and comment at the public meeting All terms and conditions of contract must be negotiated and agreed to in public meeting

12 Building Construction Projects Governed by N.D.C.C Public improvement any improvement undertaken by a governing body paid for with public funds School districts are a governing body Threshold for bidding: $150,000 If construction will be in excess of $150,000, the board must procure plans, drawings, and specifications from an architect or engineer Bids must be advertised for three consecutive weeks, with first publication being 21 days before bid opening Have to publish the bid proposal in: Official newspaper of district; A daily newspaper having general circulation in the area; and In a trade publication, electronic plan service, builders exchange, or other industry recognized method of general circulation amongst contractors, building manufacturers, and dealers in the state

13 Contents of Advertisement The advertisement must contain: The nature of the work and the type and location; When and where the plans, drawings, and specifications may be examined; The place, date, and time of bid opening; A separate envelope containing the contractor s license and bid security. The bid security must be equal to five percent of the full amount of the bid in the form of a bidder s bond The bidder must be licensed to the full amount of the bid or will obtain the licensure within 20 days of being determined as the lowest responsible bidder The governing body has the right to reject any and all bids and rebid until a satisfactory bid is received

14 Multiple Prime Bids When any individual general, electrical, or mechanical portions of the project (or any combination thereof) are in excess of $150,000, multiple prime bids are required If general, mechanical, or electrical portions are less than 25% of the threshold, the contract may be included in one of the other prime contracts Governing body may allow submission of a single prime bid or bids for other specialized portions May not accept a single prime bid unless that bid is lower than the combined total of the lowest responsible multiple bids

15 Award of Contract Governing body must open publicly and read aloud each responsible bid The governing body shall award the contract to the lowest responsible bidder Note: Officers of the governing body, or any member, appointee, or employee of the governing body, may not be pecuniarily interested in the contract NO CONFLICTS Contents of the Contract Written terms of the agreement; Required surety bond; and Any other document deemed appropriate by the governing body and advertised in the bids

16 Special Considerations Conflicts of Interest N.D.C.C : A school board member or other school officer who has a conflict of interest in any contract shall disclose the conflict and may not participate in any discussions or votes without consent of all board members Conflict of interest means personal, professional, or pecuniary interest of an individual, the individual s spouse or relative, or the individual s business or professional associations. Violation is a Class A misdemeanor Question: Does disclosing a conflict and receiving consent to discuss and vote trump N.D.C.C prohibition on conflicts in public improvement contracts?

17 Construction Management N.D.C.C Sets out requirements when school district chooses construction management method as opposed to general contractor method Two types Agency construction manager delivery method where person provides construction management services, including ideas on constructability, design, construction, and coordination Construction management at risk construction manager provides advice to the governing body during the planning and construction phase, negotiates a contract for the general construction, and contracts with subcontractors and suppliers for the actual construction

18 Construction Management (cont.) Before utilizing CM method, board must determine: In best interest to utilize either method (agency or CMAR); The services of the CM during the planning and design phase will not duplicate architect and engineer services; Same for construction phase (no duplication) The board must provide written documentation of these determinations Selection Committee (CMAR): Administrator from governing body; A registered architect; A registered engineer; A licensed contractor Note: Member of selection committee may not submit proposal for CMAR Procedures for contracting with CM Ask me after or send me an