Bidding on Vertical Construction Public Projects in Massachusetts Contractor Certification and Prequalification
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1 Division i i of Capital Asset Management David B. Perini, Commissioner Susan Goldfischer, Deputy General Counsel The Construction Institute August 6, 2009 Bidding on Vertical Construction Public Projects in Massachusetts Contractor Certification and Prequalification John Adams Courthouse, Boston Massachusetts Vertical Construction Procurement Focus on Contractor Certification and Prequalification Mass Information Technology Center, Chelsea Overview and Applicable Laws Critical Resource: Inspector General s Handbook Designing and Constructing Public Facilities available on IG s website under Publications. Construction, Renovation & Repair M.G.L. c. 149, 44A-J Public Buildings estimated construction cost (ECC) > $100,000. M.G.L. c. 149 A 1-8 (Optional CM at Risk ECC > $5, ) 000) M.G.L. c. 30, 39M Public Buildings ECC > $25,000 < $100,000. Public Works Horizontal/Site only. Materials Only Purchases (no labor.) M.G.L. c.149, 44A Public Buildings estimated construction cost < $25,00 expedited process. Design & Study Contracts M.G.L. c. 7, 38A1/2 O. 1
2 Major Differences Between MGL c. 149, 149A and c.30, 39M Bids MUST BE DCAM CERTIFIED TO BID ON LARGER BUILDING PROJECTS Building Projects, M.G.L. c. 149, 44 A-J and c. 149A CM at Risk projects with Estimated Construction Cost ( ECC ) over $100,000 Must have DCAM Prime Bidder Certification to Bid Over 26 different categories, e.g., General Building Construction, HVAC, must be identified in ad and in bid documents Must have DCAM Filed-Sub-bidder Certification to Bid Filed Sub-Bid Work /CM at Risk Trade if ECC for Trade $20,000 or more 17 Categories of Filed Sub-bid Work in c. 149, 44F DCAM Contractor Certification not required for horizontal work under c. 30, 39M or for building projects with ECC under $100,000 Filed Sub-bidding not required under c. 30, 39M or for projects under $100,000 Construction Project Opportunities & Bids Projects over $25,000 Advertised on Comm-Pass ( in Local Newspaper, Central Register, trade sources such as Dodge. Bids Must be Submitted Before the Filed Sub-bid and General Bid Deadlines-these deadlines are firm, even a bid submitted one minute late can not be accepted. Bids must be complete, signed, acknowledge all addenda, and be accompanied by: 1) Bid Deposit of 5% 2) Current and Valid Certificate of Eligibility 3) Completed Update Statement OR THE BID WILL BE REJECTED! Contractor Certification Campus Center, UMASS Boston 2
3 Construction Reform Review of Key Changes DCAM Certification of filed sub-bid subcontractors Must be certified as a filed sub-bidder if subcontract is over $20K on a Ch. 149 job (building project valued over $100K). Filed Sub-Bid Categories Enumerated under Ch. 149, 44F. Must have separate Sub-Bidder Certificate for these categories. Prime Certificate not Acceptable on Filed Sub-Bid. New thresholds governing general and sub-bids. Must be certified as a Prime/General Contractor if you are the prime/general contractor on a Chapter 149 building project and estimated value is over $100K. Requirements for General/Prime Certification 5 Completed Projects Over $80K in any one Category of Work performed within the past 5 years Bonding letter from licensed Surety Reviewed or Audited CPA Financial Statement for most recent year-end Secretary of State paperwork, if Incorporated (Annual Report/Articles of Organization) Requisite Licenses mandated by state law Changes to General Contractor Certification Goal to make GC/Prime Certification more user-friendly; New factors incorporated into Overall Numerical Rating system including criteria such as: termination, amount of litigation, direct payment claims history, OSHA penalties, workers comp history (EMR ratings); Single Project Limit (highest amount you can bid on per-project) now based on average of largest 2 projects, rather than on just the single largest project; and Single and Aggregate limits reduced to 130% of the average of the 2 largest projects - 180% if the contractor has demonstrated the capacity in the opinion of the Commissioner (if contractor achieves an Overall Rating of 85% or over) 3
4 Evaluations of Prime/General Contractors Awarding Authorities have 70 days from completion to Evaluate the Prime/General Contractor. If Awarding Authorities Fail to Evaluate Contractor, they shall risk being ineligible for the receipt of public funds for future public projects. Awarding Authorities must evaluate Contractor at 50% stage of contract Interim Evaluation Must Be Submitted to the Contractor being Evaluated. Subcontractor Certification Effective January 1, 2006 Filed Sub-bidders must be certified by DCAM All Filed Sub-bids > $20K for projects with total estimated cost of construction >$100,000 shall be accompanied by: - a DCAM Filed Sub-Bidder Certificate of Eligibility; and - a Sub-Bidder Update Statement The Update Statement provides space for updated information regarding all projects which the sub-bidder currently has under contract (submitted with every bid). Subcontractor Certification Effective January 1, 2006 Sub-contractor certification is essentially the same as prime contractor certification except: Projects evaluated over past 3 years compared to 5 years for prime contractors; Certificate of Eligibility does not show single project and aggregate limits like the certificate for prime contractors; and Certificate of Eligibility will show the number of prior construction projects evaluated by DCAM, the average numerical value on those projects, and the number of projects given scores below the passing score established by DCAM (80%) over last 3 years 4
5 Requirements for Subcontractor Certification 3 Projects over $20K in any one Category of Work performed within the past 3 years Filed Sub-bid Categories listed in M.G.L. C F No Bonding Letter requirement Compiled CPA Financial Statement is acceptable Secretary of State Paperwork Requisite Contractor Licenses mandated by state law Filed Sub-Bid Categories Acoustical Tile Electrical Work Elevators Fire Protection Sprinkler Systems Glass and Glazing HVAC Lathing & Plastering Marble Masonry Work Metal Windows Miscellaneous and Ornamental Irons Painting Plumbing Resilient Floors Roofing & Flashing Terrazzo Tile Waterproofing, Damping, and Caulking Subcontractor Certification Effective January 1, 2006 Awarding Authorities must submit Contractor Evaluations within 90 days of project completion (or Certificate of Use/Occupancy, whichever is earlier) or risk state funding for future projects. Awarding Authority evaluations and subcontractor responses considered public records (applied to general and prime contractor evaluations as well). To encourage honest evaluations, indemnification for awarding authorities submitting evaluations (not to exceed $1M). 5
6 Key Updates & Advisory Worcester Trial Court Updates to Certification Prime Application (revised 6/08) and Sub Application (revised 6/08) & Guidelines and Procedures available at under Related Links - Contractor Certification. DCAM Regulations Promulgated May CMR 4.00; 810 CMR 8.00, also found on DCAM web site. Prevailing Wage M.G.L. c. 149, 26-27D Project Specific Wage Rates Set by Division Of Occupational Safety on a Project by Project Basis. Included in Bid and Contract Documents by Awarding Authority. Required to be paid on all construction projects of any dollar value. All Contractors and Subcontractors Required to Prepare, Retain and Submit to Awarding Authority Weekly Payroll Reports on Form Required by Awarding Authority Evidencing that All Workers Were Paid the Prevailing Wage or More for Work on the Project. 6
7 MBE/WBE Participation-Affirmative Marketing Program (M.G.L. c. 7, 40N and c. 23A, 44) MBE/WBE goals set by DCAM and SOMWBA for Construction/Design Published in Central Register and in Project documents, currently Design - 8% MBE, 4% WBE Construction 7.4% MBE, 4% WBE Apply to all DCAM Projects and state assisted building projects includes projects by municipalities i and political l subdivisions i i when costs paid in whole or in part by Commonwealth. DCAM and SOMWBA develop procedures for adjustment of goals by awarding authority on individual projects. Advisory Massachusetts Independent Contractor/Misclassification Law, M.G.L. c. 149, 148B Classification of workers as employees vs. independent contractors Substantial civil and criminal penalties, and in certain circumstances debar violators from public works contracts. Creates liability for business entities and corporate officers, and those with management authority over affected workers. Joint Task Force on the Underground Economy E.O. #499 3 The underground d economy are those that t willfully avoid compliance with labor, licensing and tax laws by misclassifying employees, or deal in cash and other "off-the-books " schemes to conceal their activities, and true tax liability from licensing, regulatory and tax agencies. The Task Force coordinates joint efforts to combat the underground economy and employee misclassification, including efforts to: (a) foster compliance with the law by educating business owners and employees about applicable requirements. (b) conduct joint, targeted investigations and enforcement actions against violators. PREQUALIFICATION OVERVIEW 7
8 Prequalification Overview Prequalification - part of a two-phased procurement process intended to limit the bidding pool to general contractors/ subcontractors qualified to do the work: RFQ Phase the awarding authority issues an RFQ and reviews information submitted to determine qualified bidders Bidding Phase only prequalified bidders are invited to bid Use of Prequalification: Mandatory - estimated construction costs > $10 million Discretionary - estimated construction costs $100K to $10 million Discretionary for exempt agencies (DCAM, MassPort, MWRA, MSCBA, UMBA). Application of Prequalification to CM At-Risk Prequalification of Construction Manager - M.G.L. c. 149A, 5 - detailed process separate and distinct from prequalification of general contractors under M.G.L. c. 149, 44D½ Prequalification of Trade Contractors - M.G.L. c. 149A 8 - separate and distinct but similar to prequalification of filed subbidders under M.G.L. c. 149, 44D¾ Prequalification of Non-Filed Sub-bid bid Trade Contractors - pursuant to M.G.L. c. 149A(8)(j) (CM to submit list of qualifications and list of at least 3 firms that meet qualifications for approval by Awarding Authority and approved firms shall be invited to submit bid). Prequalification Overview Summary of Steps for Prequalification: Prequalification Committee established Prepare prequalification forms (RFQ and SOQ) Public notice of RFQ Statements of Qualifications submitted by GC/CM and filed subs/trade contractors Evaluation of Statements of Qualifications Selection of prequalified bidders RFB issued to prequalified bidders (RFP for Construction Managers) 8
9 How to find opportunities? - Public Notice Requirements for RFQ M.G.L. c. 149, 44D½(f) and 44D¾(f) require public notice of the RFQ not less than 2 weeks before deadline to submit responsive SOQ. Public Notice must be advertised in: a newspaper of general circulation (in geographic area where building project is located); AND the Central Register (published by the Secretary of the Commonwealth); AND COMM-PASS (Commonwealth Procurement Access and Solicitation System) Other potential opportunities related to Federal Stimulus Is the Information in SOQ Public? Opening of SOQs by Awarding Authority NOT public. BUT - Awarding Authority must prepare a Register of Responders at the opening of SOQs which is a public record. SOQs become public records once evaluation completed (excluding update statements, financial statements and revenue information submitted with SOQs which are not public records). Upon inquiry, general contractors and filed sub-bidders are entitled to know their score. Standard RFQ/SOQ Forms DCAM Standard Forms located on DCAM website ( Standard RFQ Form (RFQ) - customize w/ project specific instructions/information (description, address, deadlines, etc) Standard Statement of Interest Form - customize w/project specific instructions/information (include fax number for submission) Standard Statement of Qualifications Response Form (SOQ) - customize SOQ and required schedules w/project specific instructions/information 9
10 Some Recurring Issues/Problems Confusion regarding awarding authority discretion on review of evaluation criteria. Insufficient number of prequalified general contractors and subcontractors. Good general contractors and subcontractors eliminated because mandatory requirements not being met through their administrative errors. General contractors and subcontractors fail to respond fully and accurately. Once prequalified, confusion remains on requirement for subcontractors to carry cost of bonds in bid pursuant M.G.L. c. 149, 44F(D). Failure of prequalified bidders to submit bids due to insufficient project info in the RFQ or to lag time between prequal & bid. important to keep process moving! Statute does not allow rebidding without prequalification. Where is more info available? Prequalification Statutes M.G.L. c. 149, 44D½ and 44D¾ DCAM Regulations for Prequalification 810 CMR 9.00 and 810 CMR DCAM Guidelines for Prequalification - Office of Inspector General s Designing and Constructing Public Facilities manual Browsing Comm-PASS for Open Solicitations page 1 of 3 1. Open internet browser and go to 2. The homepage for Comm-PASS will show (below) 3. Any projects currently being advertised would be under the Solicitations tab. 4. Click on Solicitations and the following screen appears 5. From here, we would Browse All Open Solicitations 10
11 Browsing Comm-PASS for Open Solicitations page 2 of 3 NOTE: If you need to go back to the previous screen, do not use the Back Button on your internet browser. Use the headings at the top of the screen to go to previous screen. 6. Choose to Browse Entity / Department 7. Scroll down to find Division of Capital Asset Management 8. Click on the Check Box to select DCAM 9. Click on the Check Box to select Construction Browsing Comm-PASS for Open Solicitations page 3 of 3 In this example, there are only two open solicitations. To view a solicitation, click on the glasses icon The Summary tab gives you a description and brief overview of the document. The Rules tab states the applicable laws Under the Issuer tab, you will find contact information. The Forms and Terms provides the standard information for the solicitation. The Specifications tab provides the detailed information regarding the project (RFQ, RFP, etc.) Click on the Glasses icon on the right to view these documents or follow stated directions to view multiple documents. If you would like to go back to view another solicitation, do not hit the back button. Click on the List link at the top of the screen. QUESTIONS & ANSWERS 11
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