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Contracting change halts bidding ‘gamble’

Ally Marotti / Copy Chief

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Changes Ohio State’s Board of Trustees made to the way it hires contractors will increase workmanship quality and save the university money. Since December, 14 projects have been identified under these new requirements, valued at more than $1.5 million.

Doug Rhoades of Rhoades Construction has been working with the university for about 20 years on projects that typically cost between $5,000 and $200,000.

Until the Board of Trustees met in February, the university’s threshold for competitive bidding was $50,000. The university had to post any project costing more than that for public bidding.

So for the majority of Rhoades’ projects, his company and others like it, had to submit expected costs and quotations for the work that needed done. The university would then contract the company with the most competitive quote.

Pieter Wykoff, director of public affairs for the Ohio Department of Administrative Services, said these changes came about because there was a section in Gov. John Kasich’s state budget that included public construction reform.

The Ohio Construction Reform laws, included in House Bill 153, went into effect in January and raised the competitive bidding threshold for public institutions, like OSU, from $50,000 to $200,000.

Ken Wayman, senior director of design and construction for OSU’s Facilities Operations and Development, said with the new changes, projects costing less than $200,000 can be contracted via purchase order.

“It will lower the cost of the project and it will let us complete the project more quickly because all contractors have costs associated with publicly bidding work,” he said. “If we don’t have to publicly bid, they can give us a lower overall cost.”

Wayman said that since December, the university has identified about 14 projects on which it is using the less than $200,000 non-bid threshold. Some of these projects include lighting in the French Field House, room renovations in Howlett Hall and construction on the second floor labs in Caldwell Laboratory.

The total value of these 14 projects is more than $1.5 million, Wayman said.

But Wayman said the university will still give contractors opportunity for work.

“We’ll still seek competitive quotations, they just won’t be publicly advertised or publicly bid,” Wayman said.

Even companies contracted for the bigger projects, or those costing more than $200,000, would run into problems with the competitive bidding system, said Nathan Andridge, director of purchasing administration at OSU.

Historically, Andridge said, contractors would come in with a bid, but their work would be halted because they would have to put subcontract work out to bid. This system, he said, was not efficient.

“Each phase takes time, so a lot of our construction projects were running over the time limit,” Andridge said. “They were running over cost. … You’re not necessarily getting the best workmanship either.”

Rhoades said sometimes contractors offering the most competitive quotes resulted in setbacks. This workmanship issue, he said, could be fixed with the new competitive bidding threshold.

“There’s a reason they took that threshold up, believe me,” he said. “I had to go in and clean up mop-up jobs from companies they got in off the street.”

But even with these changes, several university administrators said they didn’t think those “companies they got in off the street” would be without work.

“I think there were a set number of companies that could do this type of work before, and I think it’s going to be the same going forward,” Andridge said.

He said there might be about a 10 percent drop off of contracted companies, but due to the “construction boom” in Columbus, those companies shouldn’t have a problem finding work.

“There’s a lot of other work going on around the city,” Andridge said.

Adam Greger, a third-year in construction systems management, said these changes will speed up the construction processes. With the bidding process, it usually takes months or even up to a year for a project to start, he said.

“The time it takes to put together a bid … it’s kind of a gamble,” he said.

Wykoff said those with dissenting views of the changes were given a chance to complain in public meetings, which hardly anyone from the community attended.

“They had their chance to complain about it, but we still implemented the law,” Wykoff said. “We’ve tried to accommodate the (differing) viewpoints.”

But Rhoades agreed with Wayman and Aldridge that the competitive bidding changes will save the university time and money, and shouldn’t be a problem for quality contractors.

“It’s a good thing for contractors that can perform and get the job done,” Rhoades said. “If a contractor is a good contractor and he performs, he’ll get work … and that’s the way it goes everywhere.”

 

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