500: Construction

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

Purpose

This policy is to provide information about the various methods of contracting and types of contracts required for professional services and construction-related procurement and contracting. 

Procurement thresholds for all construction-related services are established under the Oregon University System Oregon Administrative Rules, Division 580. 

Policy:

501: Procurement Thresholds for Professional Services and Construction Services

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

These procurement thresholds pertain to construction-related services and professional consultants as defined in OAR 580-063-0010, and are applicable to all construction-related contracting transactions.

 

501-01: Procurement Thresholds for Professional Services

Procurement thresholds for Professional Services are as follows:

a)    Contracts for professional consultants with a total value (including services and reimbursable expenses and any amendments) of between $0 - $25,000 may be secured using the “Direct Procurement” method as described in OARs 580-063-0020 and 580-063-0025.

b)    Contracts for professional consultants with a total value (including services and reimbursable expenses and any amendments) of between $25,001 - $100,000 may be secured using the “Informal Procurement” or “Formal Procurement” method as described in OARs 580-063-0020 and 580-063-0025.

c)    Contracts for professional consultants with a total value (including services and reimbursable expenses and any amendments) of over $100,001 mus be secured using the “Formal Procurement” method as described in OARs 580-063-0020 and 580-063-0025

 

501-02: Procurement thresholds for Professional Services Retainer Contract Procurements

Procurement thresholds for professional services retainer contract procurements are as follows:

a)    Contracts for professional consultants with a total value (including services and reimbursable expenses and any amendments) of between $0 - $100,000 may be secured using the “Direct Procurement” method as described in OARs 580-063-0020 and 580-063-0025.

b)    Contracts for professional consultants with a total value (including services and reimbursable expenses and any amendments) of between $100,001 - $250,000 may be secured using the “Informal Procurement” or “Formal Procurement” method as described in OARs 580-063-0020 and 580-063-0025.

c)    Contracts for professional consultants with a total value (including services and reimbursable expenses and any amendments) of between $250,001 and $1,000,000 must be secured using the “Formal Procurement” method as described in OARs 580-063-0020 and 580-063-0025.

 

501-03: Procurement Thresholds for Construction Services

Procurement thresholds for Construction Services are as follows:

a)    Contracts for construction services with a total value (including services and reimbursable expenses and any amendments) of between $0 - $25,000 may be secured using the “Direct Procurement” method as described in OAR 580-062-0015, except in cases where Oregon Prevailing Wage Law applies.  See PaCS 504-05.

b)    Contracts for construction services with a total value (including services and reimbursable expenses and any amendments) of between $25,001 - $100,000 may be secured using the “Informal Procurement” or “Formal Procurement” method as described in OARs 580-063-0020 and 580-063-0030.

c)    Contracts for construction services with a total value (including services and reimbursable expenses and any amendments) of over $100,001 mus be secured using the “Formal Procurement” method as described in OARs 580-063-0020 and 580-063-0030.

 

501-04: Procurement Thresholds for Construction Services Retainer Contract Procurements

Procurement thresholds for construction services retainer contract procurements are as follows:

a)    Contracts for construction services with a total value (including services and any change orders) of between $0 - $50,000 may be secured using the “Direct Procurement” method as described in OARs 580-063-0020 and 580-063-0030.

b)    Contracts for construction services with a total value (including services and any change orders) of between $50,001 - $500,000 may be secured using the “Informal Procurement” or “Formal Procurement” method as described in OARs 580-063-0020 and 580-063-0030.

c)    Contracts for construction services with a total value (including services and any change orders) of between $500,001 and $1,000,000 must be secured using the “Formal Procurement” method as described in OARs 580-063-0020 and 580-063-0030.

502: Project Requests, Preparation and Timing

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

Purpose:

The purpose of this Section 502 policy is twofold:

a)    To provide information on project requests and requirements in preparing requests for solicitation and/or contracting and contract management;

b)    To coordinate the efforts of the OSU departments of Facilities Services and Procurement and Contract Services (PaCS) prior to making certain purchases and arranging for design or construction activities.

Applicability:

Facilities Services, PaCS, and OSU personnel authorized to make purchases on behalf of the University, as well as architects, engineers and other consultants and contractors providing services for OSU.

Policy:

502-01: Legislative Spending Limit for Capital Construction

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2014

 

Approval for expenditure of public funds for construction is required by the Oregon Constitution, regardless of the source of the funding.  If the project is to be contracted by a public agency (in this case, the Oregon University System), the expenditure must be approved in compliance with OAR 580-063-0005 and Oregon Law.

Legislative approval is required for every construction project in which the estimated total project cost exceeds $500,000.  The Board of Higher Education is allocated a specific “system-wide” limitation that may be allocated to any institution in the system for projects that total $500,000 or more, but less than $1 million, inclusive of all fund sources. 

Should the project exceed $1 million or there is inadequate system-wide limitation available, project-specific approval must be granted by the Legislature.

Procedure:

Facilities Services staff provide information on the project scope of work, funding source, and request for spending authorization to the Chancellor’s Office, who then present the project to the Board of Higher Education for approval.  Upon receipt of Board approval, the project is submitted for legislative approval through the Governor’s office as part of the biennium budget request or to the Legislative Emergency Board if the project requires approval during a time when the legislature is not in session.

502-02: Project Submittals to PaCS Construction Contracting

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

Authorization to proceed with solicitation or execution of a contract to a consulting or construction firm must come in writing from Facilities Services or authorized departmental project and/or construction manager.  After authorization has been received by Facilities Services all submissions for construction or consultant solicitations or contracts shall be submitted to the Construction Contracts Supervisor in PaCS.

 

Procedure:

a)    Design requests: Facilities Services or authorized departmental project manager or construction manager must send an email to the Construction Contracts Supervisor, including the following:

  1. Name of OSU project manager
  2. Index or Facilities Services work request number
  3. Description of project, estimated project budget, and authorization for expenditure of funds for design
  4. Design proposal containing the following:
    • Name, address, phone and email for design firm’s project manager
    • Description of project and services to be provided
    • Not-to-exceed fee for services and separate reimbursable expenses
    • List of personnel to be assigned to the project.

b)    Construction requests: Facilities Services or authorized departmental project manager or construction manager must send an email to the Construction Contracts Supervisor, including the following:

  1. Name of OSU project & construction managers
  2. Index or Facilities Services work request number
  3. Description of project, construction estimate, and authorization for expenditure of funds for construction
  4. Desired method of procurement
  5. Hard copies of drawings, one-sided set of specifications and review comment responses from the design consultant, if applicable.

502-03: Facilities Services Role and Interactions

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/12/2013

 

Facilities Services (Design & Construction section and Facilities Operations section), along with PaCS have established procedures of notification and approval for certain types of procurements that require professional design or may have critical impact on the structural integrity of a building.

Procedure:

The following items require review and approval from Facilities Services Design & Construction section prior to issuing a contract:

  • Any architectural or engineering design work, whether new construction or remodel.
  • Any project involving air conditioners (or “move and cool” units), uninterruptible power supply (UPS) units; autoclaves and/or fume hoods; hazardous materials (including asbestos, lead, mold, silica, radiation); roofs or roof penetrations.
  • Any services that require a building permit or a building trade permit from the City or County.
  • Electrical work.
  • Design/build work
  • Telecommunications/wiring
  • When the estimated total cost of construction exceeds $25,000.

502-04: OSU Campus Standards Compliance

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

Oregon State University must incorporate design and materials consistent with the character and standards of the campus environment to; support the Campus Master Plan; and to facilitate the cost-effectiveness and ease of maintenance of campus buildings and systems.   Projects completed for OSU will utilize the OSU Design Criteria in the design and construction phases.

The campus design standards are specified in the OSU Construction Standards document which identifies OSU standard equipment, materials and building systems.  It provides guidelines and standards for design consultants, contractors, and/or OSU staff for use in developing campus construction contract documents.  The OSU Construction Standards  are reviewed periodically by a team of OSU staff under the direction of Facilities Services.

Procedure:

OSU PaCS staff will provide the OSU Construction Standards document to contracted consultants and contractors, as applicable.  Prior to issuing a solicitation, plans and specifications will be reviewed by Facilities Services, PaCS, and departmental personnel for compliance to OSU Construction Standards.  The most current version of the OSU Construction Standards can be obtained from Facilities Services website at http://oregonstate.edu/facilities/cpd/ .

502-05: Projects Needing Professional Design

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2014

 

Facilities Services departments of Design & Construction , Facilities Operations, and Accounting, and PaCS have established procedures of notification and approval for certain types of small (under $100,000) procurements that require professional design or may have critical impact on the mechanical, electrical or structural integrity of a building.

Projects requiring Professional Consultant services as identified in OAR 580-063-0010 are required to be reviewed by Facilities Services and/or PaCS prior to selection of a design professional to ensure the project complies with existing building use standards established by the OSU Campus Planning Committee, that a qualified design professional has been selected using the appropriate solicitation process, and that adequate funding is in place.  A contract for professional services must be executed by PaCS, in compliance with OAR 580-061-0020.

Procedure:

Upon determination by a department that alterations to a portion of a building, grounds or surrounding areas is desired, contact Facilities Services to determine if professional design services will be required.  If professional design services are required, Facilities Services or designated departmental personnel will contact PaCS to establish funding and submit a contract request by email. 

PaCS staff will review the request and, as applicable, prepare the contract or begin an appropriate solicitation process.

502-06: Timelines

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2014

 

The authority for contracts for repairs and public improvements is provided in OAR 580-063-0000.  Requests to solicit and/or execute contracts will be processed on a first-come, first-served basis, in as timely manner as possible given the available resources at the time.

For capital construction contracts for contractors and consultants, the timeline is dependent on multiple factors:

  • the solicitation method,
  • length of legal  review,
  • coordination of selection committee schedules,
  • in the case of consultants, the responsiveness of consultant during the contract negotiation phase, the accuracy and acceptability of the consultant’s proposal and the responsiveness of the consultant in returning signed agreements and insurance.

For smaller construction solicitations, the timeline is dependent on multiple factors:

  • the solicitation method (advertised, retainer, sole source),
  • coordination of project team schedules for the pre-bid walk through,
  • responsiveness of the awarded contractor in returning signed agreements, insurance, and bonds.

Generally, this process can take up to 10 weeks, depending on the above factors.

For smaller consultant solicitations, the timeline is dependent on multiple factors:

  • whether the consultant is on the OUS Retainer List
  • has done work on campus before, 
  • the accuracy and acceptability of the consultant’s proposal,
  • responsiveness of the consultant in returning signed agreements and insurance (if applicable). 

Generally, this process can take up to 1 month, depending on the above factors.

503: Methods of Competition

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

Purpose:

To provide information on the methods of competition for construction related procurements and contracts.

Applicability:

Facilities Services, PaCS, and OSU personnel authorized to make purchases on behalf of the University, as well as architects, engineers and other consultants performing services for OSU and  construction contractors performing work on campus

Background:

This section pertains to construction-related services and professional consultants per OAR 580-063-0020, and is applicable to construction-related contracting transactions in accordance with the requirements of OUS administrative rules.

Policy:

503-01: Request for Qualification (RFQ)

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

When factors other than price, such as a firm’s financial stability, project experience, ability to meet a specific schedule, experience of key personnel assigned to the project, etc., are desired to be taken into consideration when selecting a consultant or construction firm for any project, but most typically for capital construction projects, a Request for Qualifications may be issued prior to an Invitation to Bid where price is the only consideration or prior to a Request for Proposals.  Utilizing a Request for Qualifications assures quality workmanship on public projects and to encourage competition for contracts at the management skills level.

Procedure:

Working in conjunction with a Facilities Services project manager, PaCS recommends the appropriate solicitation procedure and develops the solicitation documents in compliance with applicable statutes and Oregon Administrative Rules.

The Facilities Services project manager may work with the client to develop the project parameters and obtain necessary approvals.  Once permission to proceed is obtained, PaCS works with the project manager to assist with development of the solicitation and the schedule, arranges advertisement of the solicitation, and schedules the review of responses with the appointed selection committee to develop a “short-list” of firms to proceed to the next stage of the solicitation.

503-02: Request for Proposal (RFP)

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

When factors other than price, such as a firm’s financial stability, project experience, ability to meet a specific schedule, experience of key personnel assigned to the project, etc., are desired to be taken into consideration when selecting a consultant or construction firm for any project, but most typically for capital construction projects, a Request for Proposals may be issued.  The Request for Proposals may be issued in conjunction with a Request for Qualifications.  Utilizing a Request for Proposal assures quality workmanship on public projects and to encourage competition for contracts at the management skills level.

Working in conjunction with a Facilities Services project manager, PaCS recommends the appropriate solicitation procedure and develops the solicitation documents and contract form in compliance with applicable statutes and Oregon Administrative Rules.

Procedure:

The Facilities Services project manager works with the client to develop the project parameters and obtain necessary approvals.  When permission to proceed is obtained, PaCS works with the project manager to develop the solicitation, contract documents, and outline the project schedule.   PaCS coordinates the development of the solicitation and contract documents consulting for legal review as applicable, and when all approvals are obtained, finalizes the project schedule, arranges for advertisement of the project, and:

1)   Distributes the responses to the appointed selection committee for review and to develop a “short-list” of firms to proceed to the final stage of the solicitation (interview or selection) (if no RFQ was issued); or

2)   Distributes the responses to the appointed selection committee to review the responses prior to interviews (if applicable); or

3)   Distributes the responses to the appointed selection committee to review and select a firm to perform the services; and

4)   Completes solicitation/selection and proceeds with contract negotiations or execution (as applicable).

503-03: Bid/Basic Bid

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2014

 

A bid (or also known as a basic bid) may be utilized when the scope of work and specifications are well defined and price is a major consideration.

Working in conjunction with a Facilities Services or departmental project manager, PaCS recommends the appropriate solicitation procedure (advertised bid or retainer bid) and develops the solicitation documents and contract form in compliance with applicable statutes and Oregon Administrative Rules.  This process is managed solely by PaCS staff.  The competitive bid process awards to the lowest responsive and responsible bidder.

Procedure:

1)    Retainer:  Projects that are estimated to be between $50,000 and $500,000 (including any potential change orders) may be solicited using the OUS Retainer program.  OSU may invite a minimum of 3 contractors from the OUS Retainer list to submit a bid on the project.  Invitation letters are sent to the selected contractors.  Two sets of contract documents (plans and specifications) are provided to each contractor invited to bid.  Bids are received and evaluated for compliance.  The lowest responsive and responsible bidder is awarded the project.  Projects estimated to be between $500,000 and $1,000,000 must be offered to all contractors under the OUS Retainer Program for bidding.

2)    Advertised Bid:  Projects that are estimated to be in excess of $1,00,000 (including any potential change orders) are required by OAR 580-063-0030 to be advertised publicly.  PaCS staff will prepare the advertisement and solicit on the OUS website and, if determined to be in the best interest of the project, in various publications as well.  Contractors may purchase plans and specifications from the PaCS office and submit a bid on the project.  Bids are received and evaluated for compliance.  The lowest responsive and responsible bidder is awarded the project.

504: Types of Construction Contracts

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/14/2013

 

Purpose:

To provide information about the various types of required Construction Contracts and how they are utilized.

Applicability:

PaCS personnel, Facilities Services personnel, and OSU personnel authorized to make construction-related services on behalf of the University.

Background:

Retainer Contracts:

In 1996 OUS, on behalf of its seven universities, first solicited and entered into contracts with qualified contractors to provide construction services to OUS institutions.  The successful contractors are to furnish all necessary labor, materials, and equipment necessary to provide construction services for future, undetermined renovation and/or improvement projects in the areas of carpentry, masonry, painting, electrical, plumbing, mechanical, roofing, paving/concrete, fire protection, and other trades generally associated with minor construction and renovation.

Successful contractors sign two-year retainer agreements that contain general terms and conditions between OUS and the contractor.  Entering into a retainer agreement does not assure selection to provide services.  It enables OUS institutions to select contractors on retainer to perform projects with direct construction costs under $1,000,000 for construction.  A supplemental project contract or supplement contains a description of services to be provided and the monetary consideration for each project.  Contractors are selected for projects based on factors the institutions deem appropriate.

Similar agreements are also in place for OUS-retained consultants to provide professional services up to $1,000,000 for design and engineering, soil studies, surveys, geotechnical or traffic study projects.

Policy:

504-01: OUS Retainer Supplements for Professional Consultants, Construction and Design-Build

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

Only PaCS staff are authorized to solicit and process contracts utilizing the OUS Retainer Agreement Program in accordance with OAR 580-063-0025 and 580-063-0030. 

The primary advantages of the Retainer Agreement Program over regular advertised projects are the savings in advertising costs, printing and mailing costs, and time.  Institutions do not have to advertise the projects.  The bidding period is also shortened, thereby getting the project underway quickly.

 

Procedure

To utilize the OUS Retainer Agreement Program for construction contracting services, contact Facilities Services at 541-737-2969 for assistance with scope, specifications, and document development.  Facilities Services and PaCS will solicit at least three contractors on the retainer list to participate in the bidding process.  A construction contract will be issued by PaCS to the lowest responsive and responsible bidder, with approval from Facilities Services and the department.

To utilize the OUS Retainer Agreement Program for professional consultants, departments must also work through Facilities Services, who will contact PaCS to determine the appropriate process for contacting a consultant on the retainer list and obtaining a written proposal for services. Once the proposal has been approved by the funding department and Facilities Services, the project or construction manager will request PaCS to issue a supplement.  PaCS will then issue a supplemental contract for these services.  See PCC 502-02.

504-02: Standard Advertised Bid for Construction

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

Only PaCS personnel are authorized to solicit and process contracts utilizing the standard advertising process in accordance with OAR 580-063-0020.  Projects with an estimated construction cost of over $100,000 would follow the process for a standard advertised bid

Procedure

To advertise for a construction contract, begin by contacting Facilities Services at 541-737-2969 for assistance with scope, specifications, and document development.  FS will direct PaCS to proceed with putting the project out for bid once all design documents are developed and required review processes are completed.  PaCS will advertise on the OUS website, and possibly on the PaCS website and in local and trade publications, as well as provide documents to various plan exchanges throughout Oregon.  A construction contract will be issued by PaCS to the lowest responsive and responsible bidder, if the bids came within the anticipated budget, upon approval from Facilities Services and the funding department.

504-03: Professional Consultant Services

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

The selection and employment of architects, engineers, planners, surveyors and related professional consultants (collectively called “consultants” or “professional consultants”) for energy management, construction, construction management, facilities planning, improvements, repairs, deferred maintenance, technical services and related activities may only be accomplished through the designated authority of the Vice President of Finance and Administration, in accordance with OAR 580-063-0025.

Facilities Services must be contacted prior to the selection/management of professional consultants and their work.  Working in conjunction with Facilities Services, PaCS will recommend the appropriate solicitation procedure and develop the solicitation documents and contract form in compliance with the Oregon Administrative Rules.

Procedure

When using the OUS Capital Construction Retainer Program, the following procedure will be utilized, in accordance with OAR 580-063-0025:

  1. When the anticipated contract price (fees, reimbursable expenses, and amendments) is $100,000 or less, the University may select any qualified consultant firm from the retainer list.
  2. When the anticipated contract price (fees, reimbursable expenses and amendments) is between $100,000.01 and $250,000.00, the University will select a minimum of three firms from the retainer list to provide proposals to the University.  Selection of the consultant will be based on criteria provided in the solicitation document.
  3. When the anticipated contract price (fees, reimbursable expenses and amendments) is $250,000.01 to $1,000,000.00, the University will post an advertisement on the OUS procurement website, which provides the opportunity to all professional consultants on the OUS retainer list.  Selection of the consultant will be based on criteria provided in the solicitation document.

To employ a consulting firm which is not on the OUS retainer list, the following procedure will be utilized:

  1. When the anticipated contract price (fees, reimbursable expenses and amendments) is $25, 000 or less, the University may request a proposal from any qualified firm to provide consulting services.
  2. When the anticipated contract price (fees, reimbursable expenses and amendments) is between $25,000.01 and $100,000.00, the University may use an informal or formal procurement method as described in OAR 580-063-0020.
  3. When the anticipated contract price (fees, reimbursable expenses and amendments) is greater than $100,000, the University will use a formal procurement method as described in OAR 580-063-0020.

504-04: Construction Manager/General Contractor (CM/GC)

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

When factors other than price, such as a firm’s financial stability, project experience, ability to meet a specific schedule, experience of key personnel assigned to the project, etc., are desired to be taken into consideration when selecting a construction firm for capital construction projects, a project may be considered appropriate for the Construction Manager/General Contractor (CM/GC) process.

When a project’s direct construction cost is estimated to be greater than $5M, and/or the required completion date of the project requires an accelerated/phased construction schedule or other pertinent factors apply, the project is considered appropriate for the Construction Manager/General Contractor process in which the contractor provides consulting services during the design phase, and in some cases begins phased construction, beginning with site development, prior to completion of the entire building design.

Procedure

Working with Facilities Services Project Management staff, and in consultation with the funding department, PaCS develops an appropriate solicitation to secure the services of a contractor to provide CM/GC services.

504-05: BOLI Procurements

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

PaCS has established a procurement method for certain construction related procurements in order to comply with ORS 279C.800 through 279C.870 pertaining to the Bureau of Labor and Industries (BOLI) Prevailing Wage Rate (PWR) requirements.  All applicable BOLI procurements must be issued from PaCS, regardless of dollar value.  Departments and Business Centers have $0 in delegated purchasing authority for BOLI PWR projects.

BOLI prevailing wage rates apply on construction-related projects over $50,000 or on construction-related projects where $50,000 or more of labor and materials was provided within the same building (or site, in the case of the Agriculture Experiment Stations) within a 12-month window and the solicitation of all such services shall be processed through PaCS, regardless of dollar value. 

Purchase Orders may be utilized for those BOLI procurements that are:

  • generally valued at or under $25,000 or in some cases in excess of $25,000 where the procurement is mainly for equipment with minimal construction-related services for installation of the procured equipment. For those purchases exceeding $25,000, PaCS will review and determine the appropriate method of procurement
  • do not require or have obtained design or design related services
  • have no retainer contracts available for utilization 

Procedure

A fully completed and signed requisition (see PaCS 302), must be submitted to PaCS.  If the department has obtained 3 quotes, copies of the quotes must be included with the requisition submittal.  If the purchase is valued at $25,000 or less or being purchased off of an OSU contract or Price Agreement (See PaCS 315-002) PaCS will proceed with obtaining a final quote from the contractor utilizing the necessary BOLI solicitation and contractual language.  If no quotes are included and/or the purchase estimate exceeds $25,000, the PaCS analyst will issue the appropriate solicitation allowed under the OARs.  If the procurement is a sole source procurement in accordance with PaCS 314 then a Sole Source Justification form must be completed and submitted with the requisition. 

505 Bonds and Insurance

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

Purpose

To provide information on the various types of bonding and insurance requirements.

Applicability

All OSU construction procurements and contracts.

 

PaCS personnel, Facilities Services personnel, and OSU personnel authorized to make construction-related services on behalf of the University.

505-01: Bid Bond

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

A bid bond or bid security requirement is stated in OAR 580-061-0090 and in the OUS Instructions to Bidders document.  Bid Bonds are required for all construction contracts not procured under the direct procurement process.  The bid bond is required at the time of bid submission and provides the University with a guarantee that if awarded the contract, the bidder will execute the contract and provide a performance and payment bond as required.

OSU requires the contractor to submit a bid bond, executed by the bidder and their surety, in an amount equal to 10% of the bid amount, at the time of bid submission.  A certified or cashier’s check may be submitted in lieu of a bid bond, in an amount equal to 10% of the bid amount.

Procedure

A standard OUS bid bond form is provided to each bidder upon procurement of plans and specifications for a construction project.  Instructions on bond execution are provided to the bidder in the OUS Instructions to Bidder included in the project solicitation documents.  The bidder must complete and have their surety execute the bond, then submit with their bid by the bid closing date and time.

505-02: Payment Bond

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

A payment bond is required at the time of contract execution, and provides a guarantee that all workers and suppliers providing labor, materials or equipment to the contractor awarded the contract, have an avenue for collection of payment should the contractor or any of its subcontractors fail to 1) pay workers or 2) pay for materials or equipment delivered for incorporation into the work of the project.  Payment bonds are required for all construction contracts, and may be required for purchase orders for construction-related services.

OSU requires the contractor to submit a payment bond, executed by the contractor and their surety, in an amount equal to the contract amount, after award and prior to execution of the contract on behalf of OSU. 

Procedure

A standard OUS payment bond form is provided to the contractor upon award of a contract for a construction project.  Instructions on bond execution are provided to the bidder in the OUS General Conditions for Construction Projects included in the project solicitation documents.  The bidder must complete and have their surety execute the bond, then submit with their signed contract form for execution on behalf of OSU.

505-03: Performance Bond

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

A performance bond is required at the time of contract execution, and provides a guarantee that all labor, materials, and equipment to be provided by the contractor awarded the contract will be provided should the contractor fail to complete the work to be delivered for incorporation into the work of the project.  Performance bonds are required for all construction contracts, and may be required for purchase orders for construction-related services on a case-by-case basis.

OSU requires the contractor to submit a performance bond, executed by the bidder and their surety, in an amount equal to the contract amount, after award and prior to execution of the contract on behalf of OSU. 

Procedure

A standard OUS performance bond form is provided to the contractor upon award of a contract for a construction project.  Instructions on bond execution are provided to the bidder in the OUS General Conditions for Construction Projects included in the project solicitation documents.  The bidder must complete and have their surety execute the bond, then submit with their signed contract form for execution on behalf of OSU.

505-04: Insurance

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

This policy pertains to all contracts for professional consultants and construction-related services, as defined in OAR 580-063-0010.

Coverage for (at minimum) general liability, auto liability, and worker’s compensation insurance is required at the time of contract execution, and provides for compensation to the University or other injured party should the contractor cause damage to OSU, public or private property in the performance of the contract, or should a worker, OSU staff member or member of the public be injured in the performance of the work.

OSU requires the consultant or contractor to submit evidence of coverage for liability and worker’s compensation insurance and is required prior to contract execution. 

Insurance requirements are included in the solicitation and contract documents, and are specific to the services being provided.  Additional forms of liability insurance are also required based on the type of services being provided.

505-05 Public Works Bond

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

ORS 279C.836 requires that a $30,000 Public Works bond be on file with the Oregon Construction Contractor’s Board for all contractors and subcontractors engaged to perform a Public Works project.  The OSU Construction Supplemental Instructions to Bidders additionally requires this bond to be in place prior to bidding.  In some cases, this bond may be waived for Purchase Order construction projects when the value of the work to be performed is less than $25,000.

505-06 Payment Bond Waivers

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

BOLI statute requires that before starting work on a contract for a Public Works project, a contractor or subcontractor must file with the contracting agency a payment bond issued by a corporate surety authorized to do business in Oregon in the full amount of the contract.

ORS 279C.625 holds the State of Oregon and the Contract Officers authorizing the contract jointly liable for the labor and materials used in performance of any work under the contract and for claims due the Industrial Accident Fund, the Unemployment Compensation Trust Fund and the Department of Revenue, on any contract that neglects to require the person entering into the contract to execute the payment bond.

While OSU must require Payment Bonds for all purchase orders subject to BOLI PWR, OSU has determined that it may be in the best interest of the University to waive the requirement for Payment Bonds on purchases with a total value not to exceed $50,000.  There may be instances where there is little risk involved and requiring the contractor to provide a payment bond may substantially impact the cost of the contract.

Policy

For Public Improvement projects or for on-site services portions of mixed contracts with total values of less than $50,000, the determination of whether or not to waive the Payment Bond will be based on the following:

  • Contractor’s performance and payment history with OSU or other Institutions and Entities;
  • The ratio of goods to on-site services;
  • The value of the contract or the on-site services portion;
  • Whether other contracted construction or installation services are being held at the same general time and within the same general area of the job site;
  • The contractor’s experience specific to the type of services being contracted
  • Whether or not the purchase is for furniture or carpet placed off of an OSU Contract or State of Oregon Price Agreement.  Special consideration may be given for these purchases;
  • Contractor’s financial standing;
  • Other factors that may indicate possible risks

PaCS will be the final authority on whether to waive any Payment Bond in these instances with consultation and a decision by the Associate Director of Facilities Design and Construction or Construction Contracting Supervisor.  The act of waiving the requirement of a Payment Bond does not influence or impact the other necessary requirements such as other types of bonds or insurance.

506 Contractors

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

506-01: Communication During the Competitive Process

To ensure fairness and provide consistent information to all potential bidders, all communication between OSU staff and potential bidders during a procurement process must be channeled through the individual PaCS staff member managing the procurement.

Procedure

All questions from potential bidders are to be directed to the PaCS staff member managing the procurement, who will then contact the Facilities Services or department project manager to obtain the requested information.  The PaCS staff member will then issue a formal addendum to all potential bidders.  Should OSU project management staff or the design consultant for the project become aware of information that potential bidders should take into consideration in the development of their bid, the PaCS staff member managing the procurement should be notified of the issue, and a formal addendum prepared for issuance to all potential bidders.

507 Other Construction Considerations and Processes

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

507-01: Funding Sources/Implications

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

Projects are funded by a variety of funding sources and there are different requirements associated with spending/accounting for the different sources:

a)    Bond funds,

b)    Education and General Funds,

c)    Gifts,

d)    Grants or Contracts, and

e)    Student Fees

  1. There are two types of costs associated with Federal grant or contract funds; direct and Facilities and Administrative (F&A) (formerly “indirect costs”).  Direct costs are expenditures associated with grants, contracts, and cooperative agreements that are necessary for, and can be identified with, the performance of a specific sponsored project. Facilities and Administrative (F&A) costs are expenditures associated with a grant, contract or cooperative agreement that cannot be directly charged to nor specifically identified with individual sponsored projects.  These costs include maintenance of physical facilities, library services, administrative services, and departmental administration.
  2. Construction projects funded by Federal grant funds may have specific requirements for: information included in the solicitation, payment of wages to construction workers, specific approvals required by the funding agency for hiring of consultants or execution of construction contracts, etc.  PaCS must be informed of the funding source if Federal funds are part of the project funding and any specific requirements of the grant conditions that may affect procurement procedures, terms or conditions prior to the solicitation.

Refer to Budget Policies and Procedures for further information.

507-02: Bureau of Labor and Industries (BOLI) Prevailing Wage Law

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

ORS 279C.800 - 870 governs the requirements of BOLI prevailing wage law on public works projects.

BOLI prevailing wage rates apply on projects where total contracted value exceeds $50,000, or on projects where $50,000 or more of contracted labor and materials was provided within the same building (or site, in the case of the Agriculture Experiment Stations) within a 12-month window.  Projects subject to BOLI prevailing wage law must be processed through PaCS, regardless of dollar value of the individual purchase.

Procedure

For all projects subject to BOLI prevailing wage rate law, the Purchase Requisition and/or request must be submitted to the PaCS office, via email, fax, or hand-delivery.

See also PaCS 504-05 BOLI Purchase Orders.

507-03: BOLI Fees

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

Per OAR 839-025-0200, Oregon State University is required to pay BOLI a fee for each contract where BOLI prevailing wage rates apply in the amount of one tenth of one percent of the contract amount.  However, the fee may be no less than $250 and not more than $7,500, regardless of the contract price.

Procedue

PaCS personnel, upon execution of a contract or a purchase order, must notify BOLI of the contract award using forms provided by BOLI.  In addition, the PaCS analyst must submit the BOLI Payment Information form and the BOLI Request for Payment Form to the Auxiliaries and Activities Business Center (AABC).  AABC will then process the payment of the BOLI fee and back-charging the funding department.

507-04: Procurement Method Determination

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

While OSU may elect to act as the “general contractor” on small construction-related procurements by issuing separate contracts or purchase orders for different trades and/or portions of the work, this process is not appropriate for all projects, and will generally be limited to projects with a total direct construction value of less than $100,000 and consisting of no more than three separate work packages (i.e. furniture, flooring, and painting) with no less than two of those services being procured through an existing price agreement.

For Public Improvement projects or for on-site services portions of mixed contracts with total values of less than $100,000, the determination of whether or not to permit multiple purchase orders/contracts will be based on the following:

  • Project includes mechanical, electrical and/or plumbing trades;
  • The ratio of goods to on-site services;
  • Whether other contracted construction or installation services are being held at the same general time and within the same general area of the job site;
  • Complexity of the work;
  • Project requires professional design services;
  • Availability of in-house project management services; and

Other factors that may indicate possible risks.

Procedure

PaCS will be the final authority on whether to issue a single “general contractor” procurement or issue multiple purchase orders/contracts to construct the project in these instances with consultation and a decision by the Design and Construction Associate Director or Construction Contracting Supervisor.  The act of splitting the construction delivery packages does not influence or impact the other necessary requirements such as types of bonds or insurance required, alter the applicability to Oregon Prevailing Wage law, etc.

507-05: Amendments and Change Orders

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

An amendment to a consulting contract for additional services that is reasonably related to the scope of Work under the original contract, including extra work or other change in the original scope of work that increases the original contract price or length of time, may be made with the consultant without using a competitive process provided that the amendment does not materially alter such a Contract.

A change order to a construction contract for additional services or materials that is reasonably related to the scope of Work under the original contract, including extra work, field orders or other change in the original Specifications that increases the original contract price or length of time, may be made with the contractor without using a competitive process provided that the change order does not materially alter such a Contract.

Upon determination by the OSU project manager that an adjustment to the contract is required, the project manager shall obtain from the contractor or consultant a description of the specific services to be added or deleted, along with back-up for any changes in price due to an increase or decrease of services or materials and provide that information to PaCS. 

Procedure

Upon PaCS’ review of the documents provided to ensure changes are in compliance with contract terms and conditions, PaCS will prepare the appropriate change order or contract amendment, obtain any necessary reviews or approvals (legal , etc.), and present the document to the contractor or consultant for signature.

507-06: Sustainability

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

In 2000 Executive Order E0-00-07 was issued by John A. Kitzhaber, M.D., Governor of Oregon.  This Executive Order directs all State of Oregon agencies and employees to develop and promote policies and programs that will help Oregon to meet a goal of sustainability by the year 2025.

All major facility projects will be planned, designed, constructed, and renovated to meet high performance building standards for energy efficiency and environmental sustainability as defined by the Department of Energy and the State of Oregon.

Green building design and construction is an integral part of OUS Capital Construction.  Institution projects should consider design standards that incorporate the “Leadership in Energy & Environmental Design” (LEED) Silver standards or higher standards, which promote buildings that significantly reduce or eliminate the negative impact of buildings on the environment and occupants.

507-07: Final Acceptance – Substantial Completion

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

Substantial completion occurs after a minimum of 30 days of trouble-free operation and/or when OSU personnel occupy and begin to use a space that has been under construction or renovation, and when all warranties for a project become effective. 

Final Acceptance occurs when the contractor has completely finished the work associated with the project including provision of the record documents and the University is ready to release final payment to the contractor.

Procedure

After 30 days of continuous, trouble-free operation of a newly renovated or constructed space or building, the Facilities Services project manager, along with the contractor, determine the date of substantial completion.  At this time, OSU personnel can begin to occupy the renovated or constructed space and the space has been put to its intended use.  The Facilities Services project manager may send a written request to the PaCS office to send a letter of substantial completion to the contractor, which will dictate the date that warranties become effective. 

Once the Facilities Services project manager deems it appropriate and is prepared to release final payment to the contractor, he or she will send another request to the PaCS office to close out (See PaCS 507-08 Closeouts) and accept the project in its entirety.  This letter authorizes the contractor to submit for final payment and is sent to Facilities Services Accounting to inform them of the accepted project.

507-08: Closeouts

Procurement and Contract Services Policy & Procedures Manual
Section 500: Construction
Effective: 7/01/2010
Revised: 3/19/2013

 

All construction projects contain a requirement for the contractor to provide official “Record Documents” before Oregon State University (OSU) formally accepts a project and warranties for the installed work become effective at substantial completion.  This ensures that OSU has complete information regarding building infrastructure, materials used, and operating and maintenance information for any equipment or systems installed, and all specified warranties.

All construction contracts are subject to provision of specific documentation upon completion of the project.  These requirements are set out within the contract documents.

Procedure

When a project has been completed, the contractor will prepare two sets of the record documents for submittal to the appropriate project manager, who then reviews them for compliance the project manual.  The project manager will email PaCS that the project is ready for final acceptance.

PaCS will review the project specifications to ensure all required warranties and other documents have been included in the record documents.  If all materials have not been provided, PaCS contacts the project manager who works with the contractor to make any required changes or provide the required warranty. 

Original required warranties are pulled from the record documents and are filed with Facilities Services for any possible use during the warranty period.  One complete set of the record documents are forwarded to Facilities Services for permanent record storage.  The second set of the record documents goes to the Operations section of Facilities Services for maintenance purposes or to the affected department (University Housing & Dining Services, Athletics, and Memorial Union) to maintain.