Good afternoon. I hereby call the special meeting of the Board of Trustees of Katy Independent School District to order.
Katy ISD · Special Board Meeting - Workshop
Katy ISD Special Board Meeting - Workshop, June 3, 2024
Find something in this meeting
Search every word of the automated transcript. A result moves the recording to the moment the words were spoken.
In this meeting
The headings and the descriptions beneath them are the district’s own words, taken from its index of this recording.
- 0:00 to 1:36 1. Call to Order - Upon announcement by the presiding officer that a quorum is present, the meeting will be called to order. The presiding officer will verify that the meeting has been duly called and notice of the meeting has been posted for the time and manner required by law.
- 1:36 to 2:01 4. Closed Meeting - Closed Meeting will be held for the purposes authorized by the Texas Open Meetings Act, Texas Government Code Section 551.001 et seq. concerning any and all purposes permitted by the Act, including but not limited to the sections and purposes listed below.
- 2:01 to 3:11 5. Reconvene from Closed Meeting - The Board will reconvene from Closed Meeting.
- 3:11 to 1:46:05 6.1 Discuss the Katy Independent School District Capital Project Procurement process.
- 1:46:05 to 1:46:20 7.1 Board Work Study Meeting - June 17, 2024
Full transcript
Automated transcript, not human verified. It is a way to find a passage, not a quotation.
1. Call to Order - Upon announcement by the presiding officer that a quorum is present, the meeting will be called to order. The presiding officer will verify that the meeting has been duly called and notice of the meeting has been posted for the time and manner required by law.
Today is Monday, June 3rd, 2024, and the time is 5 p.m.
Noting that a quorum is present, the Board will now convene an open meeting.
Dr. Rogorski, will you verify that we are in compliance with the provisions of the Texas Open Meetings Act with regard to the notice for this meeting?
Mr. Perez, I do confirm we are in compliance with the provisions of the Texas Open Meeting Act for our meeting tonight.
Thank you.
KDISD Police Chief Henry Gall will lead us in the Pledge of Allegiance.
I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.
Honor the Texas flag. I pledge allegiance to thee, Texas, one state, under God, one and indivisible.
He got us there.
Normally at this time, we, the Board of Trustees give members of the public an opportunity
to speak in accordance with KDIC Board Policy BED Local.
However, we had no one that signed up to speak as the topic was limited to agenda items.
items.
And so this concludes the public comment portion of our meeting.
4. Closed Meeting - Closed Meeting will be held for the purposes authorized by the Texas Open Meetings Act, Texas Government Code Section 551.001 et seq. concerning any and all purposes permitted by the Act, including but not limited to the sections and purposes listed below.
The Board will now convene in closed meeting as authorized under Section 551.001, the Texas
Government Code, for the following purposes 551.071, 551.074, and 551.129.
5. Reconvene from Closed Meeting - The Board will reconvene from Closed Meeting.
The Board will now reconvene in open meeting. Today is Monday, June 3rd, 2024, and the time is 528 p.m.
On behalf of my colleagues, I welcome everyone to today's special board meeting.
The Board has just reconvened from closed meeting.
In accordance with Chapter 551 of the Texas Government Code, any action arising from discussions in a closed meeting must be taken in an open meeting.
We are considering the action to send notice of proposed termination of a term contract employee, Tompkins High School teacher James Stone, for good cause.
I will now entertain a motion for this item.
Mr. President, I move that the Board of Trustees sends notice of proposed termination of a term contract to Tompkins High School teacher James Stone for good cause, as discussed in closed meeting, and directs the superintendent to give him written notice to him of these proposed actions.
Do I have a second?
Second.
We will now proceed to vote. Board members please record your vote on the screen via your keypad.
The ayes have it and the motion is adopted. Thank you.
6.1 Discuss the Katy Independent School District Capital Project Procurement process.
We're now on to our topic at hand today in this workshop that we're having.
Workshop meeting and that's to discuss the Independent School District Capital Project Procurement Process
process and this is at the request of the board from a meeting we had a couple of months
ago.
We're going to hear a presentation from Mickey Morris who is a partner with Rogers, Morris
and Grover.
And thank you Dr. Gorski for arranging this presentation and again it's at the request
of the board to just get more familiar with and ask questions related to our procurement
process.
Thank you so much.
Thanks for coming. Thank you. Can everyone hear me? Mr. President, Dr. Grzybowski and trustees,
I'm so happy to be here. My name is Mickey Morris. I'm with Rogers, Morris & Grover. We are a school
law firm with offices here in Houston and in Austin. I have worked with KDISD for a long time,
So just a little bit about me. I've been practicing law for 25 years, a little over 25 years, and the entirety of my practice has been focused on construction and representation of school districts in areas of construction, real estate, procurement, business, technology.
I'm that part of the firm that doesn't deal with employees or students.
I deal with drainage and technology and asbestos and I like it there.
But I've been working with KDISD for over 15 years on their bond programs and real estate
transactions.
I am an annual presenter and certification course instructor for the Texas Association
Association of School Business Officials in the area of construction and procurement and contracts
and I'm
annually involved in training school district bond and capital departments
business and
operations teams across the state at the annual construction Academy operations Academy and their annual bonds building and beyond series
I'm also been a guest faculty
instructor at Texas A&M where I went to undergrad at their superintendents
program on the topic of facilities law and facilities project management for
superintendent candidates and I work with a lot of your neighboring districts
actually all over the state but some of the big growth districts that have
have unique bond programs.
Obviously, districts that are closer to town
are always having bond programs because they're aging.
But the large growth districts are really interesting
because I get to be involved in the site location,
the development of the property, the construction program,
the opening and commissioning of the building from soup to nuts.
And it's a very enjoyable process.
I've also conducted quite a few operational audits to guide districts on best practices for their bond programs.
And last but not least, I am a proud graduate of KDISD.
I attended Memorial Parkway Junior High and Taylor High School class of 1990, so I have a soft spot in my heart for this school district.
district. I do this presentation training for a lot of school boards throughout the
state. Sometimes in closed session, I like it in open session because it's good for the
public to hear what happens behind the scenes that they may not see in board meetings. And
one thing I'm often asked, particularly by districts who don't do bond programs very
very often and they want to know what makes a successful bond program.
One thing I will tell you about your district is, and I'm not just saying this because I
graduated from here, but you all are kind of a gold standard.
I don't know if you appreciate that because I've had a number of boards ask me, well,
how does Katie do it?
Why does Katie not have to use outside program managers?
managers. And so I have used you all as kind of a bellwether for other districts because
one of the things that has made you all so successful is that you have quality internal
staff. You're one of the few districts I work with and a large district at that that has
not had to outsource your project management and program management. And so that's a real
feather in your cap that you've had a stable of experienced staff running your capital
improvement programs. And when you have good staff and stable staff, you are an attractive owner.
So there's a lot of work out there. You have a lot of other school districts that have bonds,
dollars to spend. And while vendors have to compete for your business, you're also competing
for vendors. They have a lot of options as far as what school district projects they bid for,
and not all school districts are high on the attractive owner scale. For example, they
may not pay very quickly. They may have demands of their contractors that are pretty onerous.
I don't know how many of you own your own businesses, but there are a lot of districts
out there that pride themselves in we're going to make sure our vendors don't
make you know one penny in profit and they're just going to stick it to them
at every turn to save money well you're not going to get very good vendors if
they can't make a living and pay their salaries and and have some overhead and
profit and when you're an attractive owner you draw attractive vendors
high-quality sought-out contractors architects and those are the companies
that also attract the best subcontractors.
Those are the ones actually building the sticks and bricks
of your schools and your buildings.
Another thing that I think is critically important as an owner
is transparency and fidelity to your voters.
Not falling so short on a budget
that you're not meeting your obligation to the voters
to complete all the projects that you committed to complete
when you ask them to vote for a bond election.
And on the internal side,
and this is what we're going to talk more about this evening,
is the strategic approach to procurement and vendor selection.
And there's a lot of law in this area, and it's pretty strict law,
but the legislature does give you some flexibility.
And I'll be honest,
it's not all districts strike the right balance between quality and price factors,
and we're going to talk a lot about that tonight.
But I will say, and I've shared this with your team,
that of all of the districts that I work for in the Gulf Coast area,
you are one of two for whom I've never had a construction-related lawsuit
or a formal bid protest.
protest. That's a big deal because of all of your neighbors out there that I work with,
at any given time, Jonathan Brush in my office and I are managing a docket of construction
related lawsuits, either where there's a dispute about more money that a contractor might want
so they sue the school district or a quality of work issue or a default or a delay in a
a project where the school district has to be the plaintiff. And at any given time, your neighbors
have pending litigation, and I've never had one for KDIC, and I've never had to defend you all
in a bid protest from a disgruntled vendor. So that's one of many reasons you all have a great
reputation out there. So as a high growth district your budgeting process reaches
far back to the to the ground that you're going to build a new school on or
rebuild a school or repurpose a school and there there are a lot of things
factors and discussions and planning a lot of planning that goes into setting a
project budget and you all see that when you're developing a bond program you see it when a
project comes to you and you might see different line items within a budget what does this mean
the factors that the team is looking at before they even call a bond election or start a project
largely relate to the land and i've just listed some out here for you but in every project
there's got to be the ability to adapt to the things that cannot be planned or at least can't be planned with certainty.
What does that mean? That you can start a project whether it's in the design phase or construction phase
and there are going to be things that happen that you all have to have contingency for.
And I'm sure you've seen that in a lot of your action items whether it's on the design side or the construction side.
There are things that you know fall within the discretion of certain platting and building officials.
The fire marshal has a lot of discretion to walk through at the very end of the project and say,
I want three more of these, and I want to see one of these over there, and you've got to be able to adapt to that.
There are surprises underground and behind walls that you don't know until you get there,
that you've got to be prepared for and be ready to recalibrate your schedule
and have contingency funds available to address them.
There are legal changes that come out every legislative session.
We just went through a big overhaul in 2021,
and after the tragedy in Uvalde,
the commissioner rolled out additional very rigid school safety requirements
that all of the districts had until last summer
to get into place in building not just new projects, but to retrofit existing buildings.
So every once in a while, there will be big changes that you have to find additional funding for.
And then inflation.
You know, we can project it.
We have indices to help with that, but we know in the last few years,
there have been supply chain issues and hyperinflation that have impacted budgets.
So those are just some of the things that you might see as a board member. You think well we budgeted this project
We had this architect in place. We had this contractor in place. Why are we having to do budget amendments?
Why are we having to approve change orders and
Those are just some of the reasons that that will come your way
The first type of vendor we're going to talk about
is
is a professional service vendor and the reason I'm
separating those is the the rules are very different
for construction related professional services
and the types of companies that will work with you in the planning and scope
development of a project whether you're buying a piece of land some of these are
involved
when we're working on the land purchase were
in a feasibility period for a piece of land and then some of them continue to
to be involved throughout the design of the project.
But what's unique about these types of vendors
is that the legislature forbids you from competing them
on the basis of price.
And that's unique to Texas.
Many states have that same rule, but not all states do.
But in Texas, the legislature has
decided that for these types of professional service providers
who are tasked with making sure that things are designed
and engineered and planned in a way that's safe for the public, that price
shouldn't be a factor at all. That you should be making your decision based
solely on demonstrated competence and qualifications and that's the language
that the legislature uses. You have to first select these providers, your number
one choice based solely on qualifications and competence and until
until you select them, you cannot have discussions or pit them against one another on the basis
of price.
So if you all see an architect contract or a portion of a budget that talks about building
commissioning or geotechnical services, just know that there's not a price-based competition
because there can't be in Texas.
So once you select them on the basis of demonstrated competence and qualifications, then once you've
assigned a project to them, you can negotiate a fair and reasonable price.
Now how do you do that if you don't compete? You know. You've negotiated with
enough of these vendors over the years. You know what they're charging. You know
what their competitors charge. You can't bid them against each other, but you do
get to make sure that their price is fair and reasonable. If it's not, you have
to formally terminate negotiations with that vendor and then you move on to your
your next second most highly ranked provider on the basis of qualifications and competence.
And what you and most other districts who have large capital improvement programs do,
you create pools.
You might issue a request for qualifications and pre-qualify professional service providers
to put in a pool.
You shortlist the ones that you want to work with, and then as you pair them up with projects
throughout your capital program, you negotiate their price for each project at that time.
So any questions about professional service providers for that process?
Yes, I have a question.
Thank you for your presentation.
One question I have is it has to do with why I'm just concerned about this.
I'm just wondering, why is the attorney doing the presentation rather than Mrs. Casman?
I just didn't know that the attorney was going to.
Oh, because I'm covering all of the procurement laws.
Okay.
Yeah.
Okay, cool.
And then the next thing I have is, so when you say that we cannot use price as a determining factor, is that a Texas law?
Yes, ma'am.
Okay, so that's nothing that anybody can do anything about that.
That is correct.
Correct. And it doesn't just apply to architects and engineers. It applies to all governmental
entities and other types of professional services as well. Physicians, nurses, CPAs.
That sounds like almost anybody with a certification.
It's the highest degree of skill and training required. That's how the Attorney General
has described it and really if you look at the list it's tends to be professions
that are directly related to a more fiduciary obligation or life safety
issues thanks mr. president I have a question let me let me just say Mickey
he's going to ask for questions from time to time and so you don't you don't
need to ask mr. president you know for me to recognize you so this is a
workshop sure and so when you ask for questions then people should feel free
to ask questions in those in that particular area that she's asking about
and I don't need to recognize you it's a workshop and feel free to ask her
questions when she asked for questions okay i have a question um the providers i just want to clarify
so any kind of provider that's the law in any kind of provider cannot be no decision can be based on
price any kind of provider there are two there are two different statutory lists one that's unique to
school districts in the texas education code okay that talks about fiscal agents financial
financial consultants, technology consultants, you have an option.
To look at price.
An option.
You have the option for technology consultants and financial consultants.
Okay.
And lawyers.
You can look at price or not look at price.
Then there's a list in the government code that applies to all types of governmental entities.
and that list is very specific that you cannot, not optional, you cannot compete them on the basis of price.
And that list is architects, engineers, landscape architects, surveyors, interior designers, physicians, nurses, optometrists, surveyors, real estate appraisers.
It's a long list, but yeah.
A lot of them are construction related, but not all.
CPAs are on that list.
Okay, and in what you're presenting, you're distinguishing between private sector and public sector?
That is correct. These are all public sector laws. Yes. Okay. Yeah. Thank you.
Selecting the contractor is a very highly regulated set of procurement laws.
and if you look at the enabling procurement statute for school districts
in the Education Code you start with the notion that any contract for goods or
services valued at 50,000 or more and it's in the aggregate it's a very
complicated concept has to be competitively procured unless a
statutory exception applies by one of the listed methods that the legislature
has provided and they're very specific on how each of these methods have to be
handled we're here to talk about construction so I won't cover the goods
and non construction but their rules whether it's electricity depository
banks I mean there there are rules for all different types of commodities and
services, school buses even, but on this list, you're kicked over to a different statute in the
government code for construction services. And the government code statute applies not just to
school districts, but to state agencies, municipalities, counties, mud districts,
districts, housing authorities, all other political subdivisions of the state.
So when we're talking about construction, we go over to the Texas Government Code.
Now, I got out of law school in 1998, and I remember how excited the school districts
districts I started working with were because in the 1997 legislative session, the law fundamentally
changed. Prior to that time, cities, school district counties could only pick contractors
using the lowest responsible bidder method. And that was the default. It's called competitive
competitive bidding, that was the default, the only method you could use up until 1997.
And in 1997, the legislature added additional options for governmental entities to bid out construction projects.
And it came about because there were a lot of lawsuits related to quality and games being played with companies underbidding each other,
but you didn't know if they were leaving things out, then they'd cut corners to make their margins.
And so the legislature enacted alternate delivery methods that school districts and other governmental entities could use
that didn't just look at price, but had a more holistic approach and allowed you to score and consider other things.
But this old default, which is competitive bidding, lowest responsible bidder, what was limiting about this is that an architect would design a project,
contractors would have, what, two, three weeks to study the plans, get all of their subs involved, do an estimate, do a takeoff.
They would bid on the project, and the government was pretty tied.
their hands were tied, you had to award to the lowest responsible bidder. To declare a bidder not responsible is not easy to do. You can't engage in any type of comparison. You've got to be able to show that they can't even perform the base minimum specifications. You don't get to look at how long they've been in business, are they stable. If they could meet the bonding requirements and they claimed they could perform and they hadn't been debarred,
or had some disqualifying safety record, that's one of the few things the
Attorney General would let you look at, you couldn't consider any other
qualitative factors. You certainly couldn't compare them to the other
people that were bidding. On bid day when you read the prices everybody
pretty much knew who won, right? The other limiting thing about competitive bidding
is that you couldn't negotiate with the top ranked contractor, the apparent
parent winner to see, okay, if we took this out or put this in, we're a little over budget,
we want to make some scope changes, how would that change your price?
You can't engage in those types of negotiations under the competitive bidding method.
If you changed anything, you'd have to put it back out to bid and give everybody an opportunity
to put in a new price.
So for obvious reasons, this method is rarely, if ever, I don't know of any K-12 school district
that I work with or that I've heard of that has used competitive bidding since
the other methods came about. So there are various other methods that that are
really not popular in K-12 world because some don't have any price competition at
all but the three main ones that school districts use and that that KDISD uses
are what we call best value methods.
It's an overall best value.
It's a balance of price and other factors.
And the three that we're going to talk about tonight,
competitive sealed proposals, construction manager at risk,
and job order contracting.
Now, I'm going to start with job order contracting
because it's very different than the other two.
And the other two really need a side-by-side comparison
that we're going to walk through.
So we're going to start with job order contracting.
You all probably see that as JOC.
If you see an agenda item, you'll see a JOC.
What's a JOC?
Well, it came from the military, actually.
This is a federal type of contracting.
In the federal world, they call it IDIQ contracting,
and it started with the Department of Defense.
And it's a method that allows you to keep one or two or a pool of standby contractors that are available to go out and do a maintenance, a repair, a minor renovation, remediation, minor construction.
and it's a pool of vendors you want to have available to you for things that you know you're going to need
or that you do on a recurring basis, but the delivery times, the quantities are indefinite.
IDIQ stands for indefinite delivery, indefinite quantities,
and it's a concept that is now used by all types of governments, not just the federal government.
States all have IDIQ.
Most of them call them job order contracting.
So that's what it is. It's a fixed unit price type of contracting method for what we call jockable work.
You wouldn't use this to build a new school. You couldn't under the law or a massive repurposing of a building, but small things.
We need sidewalks. We need to site portables.
And what's so great about job order contracting for most governmental entities throughout the country is that it's the one method where you don't have to procure your own pool of vendors.
You can, but invariably school districts and other governmental entities use purchasing cooperatives.
And so purchasing cooperatives will issue the solicitation for various types of job order contractors.
It could be a general contractor, it could be a trade-specific jock, a plumbing company,
an HVAC company, a roofing company.
And the cooperative does the solicitation, complies with all of the competitive procurement
requirements.
They score them on pricing, qualifications, experience, references.
And then if you're a member of that purchasing cooperative, you can go to their pool of jocks
and pick one that's appropriate for what you need.
So the type of projects that are suited for JOC,
and there's a whole potpourri of little things that come out of bond programs
and deferred maintenance, even out of your maintenance department.
that end up being jocks. But these are smaller budget projects of shorter duration.
But what's so valuable about the jock method is that when you have a need for vendor certainty,
perhaps you have a company that has knowledge of your buildings, your maintenance systems,
they're very familiar with your roofing systems, your HVAC system, you can go directly to the
vendor that you know has done good work for you they've already been pre-procured by the
cooperative they know the building they're responsive um or if you have options they'll
have them in all categories of trade or general construction so you can look at your options and
decide who's going to give you the best performance on your delivery schedule the other great benefit
of JOC is that you can do something that you can't do with the other methods on a
big project and that is they serve a diagnostic and a scope development role.
So because they've already been procured, we're going to talk about what that
looks like, they can come out and walk the building with you, walk the job with
you and look at does this need to be fixed, can we make this work, does this
have useful life left in it, does this need to be repaired or replaced. They can
can help you develop the scope of the project that you need.
And you can use them for projects
where you need architect or engineering assistance,
or you can just use them for a flooring project
where there's no architect or engineer needed at all.
You can go straight to a trade.
If you have a roofing project, go straight to a roofing jock.
You don't need to have a general contractor that then brings
in a roof subcontractor, and you cut out that middleman cost.
And so you see this used a lot for lifecycle maintenance deferred maintenance
Critical systems needs where you wouldn't want to put out a standalone bid. Anyway, you want to get somebody in right away
That's what jock is is perfect for so how is jock competed
When the cooperative puts out the solicitation
They designate a unit price book a nationally published unit price book and for any of you who've ever had
I know I did with Harvey, an insurance adjuster walking through your house with their iPad and their Exactimate database.
They're like, okay, we're going to need, you know, eight sheets of sheetrock and so many linear feet of conduit and so many cubic yards of concrete.
And they do a little takeoff, and they've got a unit price for that.
That's how job order contracting works.
It's a unit price-based procurement method.
So the cooperative will identify, and that's how long I've been doing this, it used to be a book and now it's an electronic database, but I still say book.
RS means facilities cost data, the 2023 edition.
And they'll designate that book.
And then every company that submits a proposal to the cooperative will say, I'll charge .9, that's my coefficient, 90% of every unit price.
or I'll charge 1.1, you know, 10% markup from every unit price.
But it's an all-in number.
And everything you can imagine, just look at the list up here, is in that book.
The supervisory personnel, the project manager, the superintendent, demolition, doors, louvers, partitions,
shipboard, wall base, carpet tile, every rental equipment, cranes, dump trucks,
everything is in that book and they'll have a how the unit is measured and then
they have a column in the book or the database called total including overhead
and profit. So it's a fully loaded number and when you get a price quote from a
a jock by law, they've got to give you that takeoff, right? So you know exactly how many
cubic yards of concrete or carpet that they are charging you for, the unit price out of the book
loaded with overhead and profit. So they don't put a double market up or put anything else on
there except for bonds or surety bonds and insurance. And they'll give you a total that
that looks like this and I have a lot of clients who will
send me
jock contracts and say
isn't there supposed to be a take off on this is this right
you know they're adding overhead and profit and
the co-op is very specific with the rules you do not you know overhead and
profits already baked into your unit price you don't get to charge it again
and they'll even look at your jock quotes for you
the cooperative that you're a member of to see
if the vendor is pricing it correctly. So they don't get to make it up. So they'll
they'll give you a total of all the estimated quantities and units and then
because it's a national price book every database has a CCI, a city cost index,
because what you pay for an hour of labor in Pittsburgh is very different
than Houston or concrete. So every major market area Houston has a CCI that
that adjust those unit price universally upward or downward.
And so they have to show you the total adjusted by the CCI.
And then their coefficient that they bid to the cooperative.
This particular example here was 0.89.
So they're discounting everything in the unit price
book by 11%.
And they give you a subtotal.
Non-pre-priced items, every once in a while,
there's something that's not in the book.
and it's usually something custom like like a custom-made cafeteria line that's
one I see pretty often you know cut to spec logos on your turf or painted on
the wall signage and graphics and so when they price something that's called
a non pre-priced item they have to show you what price they're charging and then
the overhead and profit and often the cooperatives make them bid their maximum
maximum markup for overhead and profit on a non-pre-priced or custom item.
And then you see the total.
If the law requires surety, payment, and performance bonds, they get to add that.
Sometimes the insurance is baked into their coefficient, sometimes not.
It differs from cooperative to cooperative.
And so you know you're only paying for exactly what you need,
the quantities that they're using at the unit fixed prices that they all competed for on bid day
so the benefit of a jock of course is that the pricing is certain you have flexibility to pick
a vendor that you know has done good work for you that knows your district and you can go straight
straight to trades and you have that ability to walk through and have their expertise in
helping you scope exactly what needs to be done, what doesn't need to be done, and then
you can see that they're only charging you for what needs to be done.
Any questions about job order contracting?
I have some questions.
So when I look at this, it says it's for smaller budgets, but that looks like a large.
I don't know what the definition of a small budget is.
That's a great question.
You wouldn't see it for a $10 million renovation project, right?
So Texas doesn't have a dollar limit on jock.
Some states do.
Texas doesn't.
We don't know what minor construction is.
The only guideline we have is there was a school district in the area who had a lawsuit.
It was actually a lawsuit against the school district for using job order contracting for a major middle school renovation.
and this was in, I want to say 2003 and at the time it was about a nine million
dollar project and the court said no. That's the only guidance we really have.
It over the years you see school districts use it for major chiller
replacements that could be you know millions of dollars so there's really
not a bright line rule in Texas what you're really looking at is is it the
type of work that's recurring is it something that you're repeatedly having
to do if it's so unique that like how often do you convert an elementary
school into a fifth grade campus right you may do it but it's not the type of
recurring re-roofing, HVAC upgrades, electrical upgrades.
And when there's a job order that by law is over $500,000,
it has to go to the board for approval.
And that's really more for cities because they were using job order
contracting so often that companies were complaining.
planning, but I see school districts use job order contracts for up to five, $6 million
projects.
Yeah.
And usually it's the type of projects where the cost is driven by expensive equipment
like HVAC equipment.
So what I'd like to also say, so who governs it?
Which government?
Is this the Texas government?
Is it the federal government?
So job order contracting is a creation of Texas state law, although other states have it.
But this is part of the Texas government code.
So these are rules that apply to governmental entities in the state of Texas.
So when I look at this, I just want to say this example quote that you put, that looks very similar to things that I've seen before in a bond committee.
MS.
And in what?
MS.
And in the bond committee?
COMMISSIONER MAYES.
MS.
Mr. VEALING.
You know, when we look at the, when we're trying to figure out the bond, the cost of
things in the bond, I've seen things like this.
So are JOCs sometimes embedded within a bond, you know, like a bond?
MS.
That's a fair question.
No, they usually are the smaller type of projects.
But what you're seeing is the same process that your facilities assessment team would do.
For example, if they're going to do a database of facilities assessment needs throughout your district,
look to see where things are in their useful life, what your different priority deferred maintenance
and capital projects need to be, they use a very similar process.
So they do a takeoff, a cost estimating takeoff.
They factor in soft costs, overhead and profit.
They may adjust for years of inflation assumptions depending on when you might get to the project.
So it's very similar to the exercise you'll see when you're coming up with your bond budgets to begin with.
They do that kind of cost estimating.
I have seen this before in the bond.
And if you've ever worked near a construction company, this is how they put their bids together.
They do the same type of
scope and quantity takeoffs to make sure that they're not leaving things out on bid day.
I have a question.
Do you know or does anybody know how many vendors we have in our co-op that we're a part of
or what co-op we're a part of?
Who is that with?
Are we co-opted with other school districts or is this, what does that look like for us specifically?
There are, if I had to guess, I would say there are probably 25 to 30 purchasing cooperatives
that Texas school districts use. First, every ESC, your Region 4, most of them
have their own co-op. The ESCs have gotten into the co-op business. The State
of Texas Comptroller has the TexMAS cooperative which uses federal GSA
schedules. There are Harris County Department of Education Choice Partners.
They have a job. TASB by board is a cooperative that has job order contractors.
And then there are a few others in the state. If you looked at their offerings of job order contractors,
each one of them will have dozens. They'll have some that are just general contractors.
They'll have them sorted out by trade, plumbing, HVAC, paving, flooring, athletic surfaces.
So there are a lot to choose from, but they're located throughout the state.
So most of the Gulf Coast area school districts focus on the cooperatives with the vendors that are located nearby,
particularly because these are things that, you know, when you need them, you need them.
You need somebody to mobilize and come in and be responsive.
So that doesn't have to go out to bid, then this is just, I'm understanding that correctly,
this is just we say, hey, we've got a job, we put the proposal out, we pick whoever we
want to do it, if we have a specific vendor that we like, then we know that they've already
been approved through this co-op process and we throw that out there to that vendor.
That is correct.
You do not have to bid them again.
They have been bid by the cooperative and their unit prices have been set and their
coefficients fixed.
You don't have to then engage in a second procurement.
And then how do those contractors come on and off that vendor list?
How often does that happen?
Is that a fluid kind of movement, or what does that look like?
The law in Texas is that a job order contractor can,
whether it's you doing your own or a cooperative,
they can be given a base term of two years
with up to three additional one-year renewals.
The maximum then is five.
And so these cooperatives, on a rolling basis, will redo their jock procurements roughly every five years.
And then they can kind of flow in and out of the different jocks, right?
So if you have one that's in kind of like this bucket over here for Harris County,
then you have another one that's over here in this bucket,
then they can serve their term here and then kind of flow into the secondary one, or does that not?
They can be on as many as they want.
So you can find the same vendor that's a buy board jock,
who's also a choice jock and a region three jock they can be in as many cooperative pools as they
want to okay all right thank you i appreciate it dr grugorski who do we usually use for our
cooperative i'd have to ask chris if he's got a list of that with him i don't mean to put him
on the spot but if i remember correctly we have probably as many as maybe six or eight ten co-ops
eight twenty we're expanding look at that yes and and I work with some large
districts that they they will actually go to their board and say look here are
the jocks that we're going to use that we've kind of vetted from the co-op
offerings that have done great work for us and they create even a more closed
closed pool. Some do that, some don't. But it's a very common, I don't know what maintenance
departments and bond departments would do without the ability to, because when the school
dude work orders come in, remember the law we talked about at 50,000 or more, you'd have
to do your own advertised solicitation. So to have to do that for everything that would
would be 50,000 or more, if it weren't for job order contracting, things would not be
moving and getting done quickly.
Yeah.
I have another question.
So in those 20 JOCs that we have, do we get to choose?
So let's say we're going to do some HVACs, but we have three different JOCs that do it.
Do we get to choose between those JOCs?
You can pick a jock that's on a cooperative pool that you're a member of, and if you have
a preference because it's somebody who might have worked on your system already, or they
know the system or they know the building, yes, you can pick whoever you want.
They've already been procured.
And so we don't need to do any kind of comparison between the ones that we already
have?
You do get to see.
So the co-ops use the same unit price books.
Some may have an older price book than others, but you can look, when you log into your account on a cooperative, you can see what their coefficient is.
So you can see, okay, this one charges a .89, this one charges a .92.
They may be using a different underlying price book, but they typically update the price book from year to year.
All right, so there is some choice in that.
So I would say there's due diligence, but you don't have to do additional competition.
Okay, so construction manager at risk versus competitive sealed proposal.
There are whole day trainings I do on nothing but these two things, but I am going to boil it down for you.
because these are the two main delivery methods that you see for your major projects in school districts.
And like I said, these were the best value delivery methods that the legislature added in 1997.
And so what do we mean by best value?
you that means that on bid day when you open the proposals you hear every might
hear everybody's numbers but you still don't know who won right because it's
not just about price and what the legislature added is additional factors
that the government the school district may consider now when they're awarding
their contracts so in addition to price we see these list of other factors now
Now what they said is, and this is where you see a lot of protests and compliance issues,
the factors have to be published in the solicitation.
They have to be assigned a weight.
And once they're published that way, that's the way it's going to work for that solicitation.
You can't change the weights.
You can't add or pull out factors.
Everybody has to know the rules.
There has to be transparency on which of these factors you're going to score, how much they're going to be weighted, and you have to describe the methodology you're going to use.
So what do you mean by the quality of the offerors' goods and services?
Are you talking about their people, their subcontractors?
So you've got to be very specific in how you put these solicitations together.
So competitive seal proposal, this is kind of the traditional design, bid, build.
Okay, you get an architect or an engineer to prepare plans and specifications. You
issue a solicitation with those plans and specifications. All the contractors
are looking at the fully designed project, all the plans, all the specs. They
know what the rough budget is because if they don't have the bonding capacity or
the bandwidth to handle it they need to know is this a million dollar project is this a
50 million dollar project they have the weighted selection criteria and they do their estimating
they go to their subcontractors they submit lump sum proposals it's an all-in price
you can also ask for additional unit pricing so if it's a project you think we don't know we might
need additional dirt the county may make us do additional grading you can ask for unit pricing
for cubic yards of select fill concrete anything you think might be a contingency or an allowance
or a change order down the road you can lock in unit prices and when you get the proposals with
all of their qualitative information and their pricing you score you evaluate score and rank
rank them in all of the different weighted factor categories.
And once you know who the top ranked is, the total overall score,
one of the benefits of CSP that we didn't have in the hard lowest responsible bidder
is that you can go to the top ranked winner before you sign the contract and say,
you know what, we want to get the budget down a little bit.
What if we took out 25 parking spaces?
Or what if we added two stalls to this bathroom or made changes here?
And you can negotiate with that company, well, this is how much it would change my proposal.
It would go up, it would go down.
What if we shortened the schedule?
What if we went longer?
And you don't have to go back out to bid with the other contractors.
You can have some of those scope negotiations before you sign the contract
So you get exactly what you want, which is what you'd want to do if somebody were coming to renovate your house, right?
You know, well, what if we did this?
What if we did that?
But once you've decided who's going to win, you can have those negotiation discussions without having to go back out to market or give everybody else a chance to compete.
But you can only negotiate with one proposer at a time, starting with the top ranked.
If you can't agree to those scope or schedule changes, you have to terminate with that number one,
and then you can move on and engage in the exercise with your number two.
Now, remember, when I say number one and number two, I'm not talking about price.
I'm talking about the total overall score.
Construction manager at risk, very different.
This is a more collaborative delivery method.
So this is one where you're going to hire the architect or an engineer, but at the very
beginning of design or pretty early on in design, you're then going to solicit a construction
manager at risk who's going to actually sit at the table with the team, including the
design team.
And they provide what are called pre-construction services.
And you pay a fee for that.
that. But as part of those pre-construction services, the company who's then going to
serve as your general contractor will review the plans and specs as they're being designed
for constructability, feasibility issues. They will do periodic cost estimating to make sure
that the design is staying in budget. These are things that you wouldn't get with a CSP
contractor, right? They're bidding once it's done. They'll make systems and materials recommendations
that can help keep the budget on track. And as you see, and we'll talk about this more,
school districts were so excited about this delivery method for renovations, right? Because
there are things that architects or engineers may assume and contractors have the day-to-day
on the ground knowledge that, you know, I don't think you have the plenum to run that
ductwork up in the ceiling.
I think it would be better if we ran it up at the top of the wall.
We're less likely to run into plumbing obstruction.
There are discussions that happen that under a CSP project would be a change order, right?
We need to do this differently.
So having that collaboration during the design phase is really valuable for certain types
of projects.
You do pay for it, but that's the benefit of having your GC join the party very early
on before the designs are finished.
Then of course that CM at risk serves as your general contractor during the construction
phase.
Another thing that's different about CMR, and you'll understand this when we talk about
how they compete on price, is that when a general contractor under competitive seal
proposal comes to you on bid day, they've pretty much got their team assembled, right? They've
gone out to the subcontractor market. They've gotten quotes from the subs. They've got their
team together. And if they win, they go out and execute all the contracts with their subs.
On CMAR, it's not designed yet. And so you're only bringing the CMAR on board. By law, in Texas,
they have to compete their subcontractors. And the reason for this is, is when you pick the CMAR,
you don't know how much the project's going to cost yet.
You may have a budget, but you don't know because it hasn't been designed yet, right?
So once it is designed and you have the roofing system all done, ready for permit, everything's done,
then the CMAR has to advertise.
They have to run an ad and allow subcontractors to compete on lump sum bids for the trade work.
Once you go through that process, you sit down with your CMAR,
you know, who the subs are going to be or what the sub pricing is, and they fix at that point
a guaranteed maximum price, a GMP. So when you all do construction manager at risk,
you'll first see an agreement with the construction manager at risk when they come on board,
when they're selected during design. And it's not until later on that same project that the
the administration will bring back a GMP amendment.
Okay, so that's the point now where, okay, now this project is designed,
we've got all the subs on board, we know what it's going to cost,
and we are not responsible for anything more than that GMP.
Okay, they're at risk for any escalation, inflation, any cost overruns,
unless it's something that truly is an unforeseen condition that nobody could have known about.
Yeah.
So let's just look, kind of do a run through on a side by side.
So on your CM at risk, they're selected at the beginning of or during the design phase
and during that time they perform the cost estimating, feasibility, constructability
reviews.
On CSP, they're not picked until the completion of design, until you're ready to get a building
permit.
And they're responsible for the project as designed and they didn't have input, right?
So if things are wrong, things are missing, there are errors and omissions,
those are the change orders that they're going to have to be paid for.
The determination of price.
Okay, so if we don't know what the project is going to cost,
how on earth do construction managers at risk compete on price?
For our CSP general contractors, we know it's the all-in lump sum cost to build it.
It's already been designed.
So the law has three areas where you can compete a construction manager at risk
when you solicit them. What are they going to charge for those pre-construction
services that we talked about during the design phase, the cost estimating, the
plan review. What are their general conditions costs or job costs? That's the
salaries for their project manager, job site superintendent, their monthly
monthly trailer rental, their insurance premiums, their payment performance bond costs, erosion
fencing, just all of the home office and job site job costs that they charge, they have
to compete on that.
And you ask for a long detailed list of their unit prices, their salaries.
and then the CM fee, it's a percentage fee for profit, for home office overhead and profit,
on the cost of actual construction once you know it.
And you don't know that at the time you pick them, so they're all competing on this fee, this percentage fee.
And then once you know the cost of construction and you've got your sub-bids,
They add all of that up for the guaranteed maximum price, the cost of construction, their general condition job costs are usually capped.
So whatever they told you on bid day for their monthly salaries, that's going to be their not to exceed cost of general conditions.
They calculate their fee on that, and that's how you come up with the guaranteed maximum price.
CSP, they get to pick whatever subs they want, but you get to score them on that.
You know, you're going to give them points as part of that evaluation criteria on the
quality of the subcontractors that they're using.
Have you worked with them before?
They done good work for you before.
On a CM at risk project, they have to advertise and compete their subcontractors, but the
owner gets to be part of that process.
Okay, so when those proposals come in, you sit with the architect and the CMAR and you
look and they
don't have just like you don't they don't have to pick the cheapest if they
say look you know this this concrete company came in cheaper but we've had
issues with them in the past they're not they're not the greatest or they're
really slow or late we wait on them so you can have a discussion about the best
value subcontractors and how that will impact the guaranteed maximum price the
The other interesting component about CM at Risk is that it is only an actual cost,
auditable contract.
So you don't pay the GMP no matter what it is.
On a competitive seal proposal project, if they say,
I'll build this elementary school for $30 million, you're paying them $30 million.
If it's over, you only pay them $30 million.
If it's under, that's just additional profit for them.
On a construction manager at risk project, if the actual cost, and you get to audit it, review it, all their invoices have to have all the backup of what they've paid the subs, those actual general conditions costs, they do a reconciliation at the end.
If the total final cost comes in under the guaranteed maximum price, you keep those savings.
And they can only charge to the project what we have said in the contract they get to charge the project.
And they see that on bid day.
They know they can't charge out-of-town travel for their people unless they get, you know, pre-written authorization.
So it's a very transparent pricing method.
So because of these differences now you can see why some projects are going to be CM at risk projects and others are going to be CSP projects.
So CM at risk, where we see CM at risk, renovations.
Because you have the benefit of that guaranteed maximum price.
And so if things are a little more complex or take a little longer, you've got the protection of that GMP.
And there are a lot less change orders because the contractors there during design, they can walk the project, they can take field measurements,
they can study as built, come up with a really tight set of plans and specifications to really minimize those surprises on a renovation project.
project and then you have that auditable GMP maximum.
Rebuilds. So if there's a phased project and you want to start with the construction of a new school on the same site, and this is how Spring Branch has done all of its elementary replacements.
They did some on site and some on a T campus, but they'd build the new building and then
they'd knock the old one down.
You can start one phase while the other is still being designed.
So you might have a phased GMP, couple GMPs, a new building GMP and then a demolition GMP.
So it's very popular for rebuilds.
If you have a tight schedule, having that general contractor with you during design,
they can start ordering materials that are long lead items, things that they know have supply chain challenges.
They can get the structural steel ordered.
They can get long lead HVAC equipment ordered.
They can start a site work package.
You know, we're still going through design of the building, but we know that we're going to need to run new plumbing.
We're going to need a detention pond over here.
We're going to need some maybe some road work that the city or county requires so you can get early packages going
Before you have permits for the whole building so it's great for a phased schedule project or where you have scheduled challenges
If there's a very complex scope, and you just want more eyes and ears on the plans and specs and on the building
It's very popular and
Obviously where you have need for design teamwork
work. CSP, though, is still a great and very popular method, but you tend to see it on projects
where there aren't going to be a lot of surprises or challenges. For example, a brand new building
on a green grass site. You know what the building is going to be. You might have built that similar
type elementary school 10 times. It might be a prototype design. Could be a simple addition.
condition, something where you have a pretty high certainty of the schedule, it's not terribly
complex, or you have a flexible schedule. If you're late, it's not a school that has to be
open right at this time, you know, it is something where you can kind of roll with the punches if
there's bad weather or supply chain issues. But you also would use it on a project where you have
high scope certainty, because anything that's not on those plans or specifications is going to be
a change order and there's not going to be a lot of collaboration up front to
work out those bugs so when we talk about these methods the rules for
evaluation and scoring are the same pretty much for both but before we get
into the evaluation just on the differences between the two anybody have
any questions or things that are still not clear i had a question too thank you um when you were
talking about the competitive seal proposal and you mentioned that you can negotiate with the
the number one correct um the winner so to speak at that point in time is that um
confined to changing scope or can you just say hey um you know i wanted to lower the price
That's a good question.
I'll give you the typical lawyer answer.
There's many ways to skin a cat.
Typically, it's for value engineering.
It's to try to get the number where you want it
or maybe make sure that they understood the drawings and specifications.
So a lot of it is just scope refinement or negotiation of scope.
Can you look at your number one and say,
come on, you can do better than that?
Our number two was lower than you.
No.
Could you eliminate them?
Could you terminate negotiations and move on then?
No.
And the reason why you couldn't do it that expressly is then what are you doing to the weight of price relative to the other weighted criteria that you published?
You're increasing its weight.
You're making it the sole determinative factor, which you can't do.
you're stuck with that percentage now how do you handle that look we really
this is the budget we were looking for this is the number we were looking to
get to what can we do to get to where we want to be what recommendations can you
make or is there something you can substitute is there something we can
look at to get the number where we want it to be and that's how that discussion
would go. I had a second question on the your slide where you're comparing the
two construction manager determination of contract price? Yes. Yeah that one. Okay
down below actual cost of construction unknown until CMR bids for construct
contractors and guaranteed maximum prices negotiated. Correct. Who is actually
providing that in terms of I know we're negotiating but where's the number
coming from is it are we you know because we had we had a certain number
in the bond so to speak like an original estimate okay and now but in the
meantime the the contractor at risk construction manager at risk is doing
all this work right talking to subcontractors and etc they have their
overhead profit in their general conditions pre-construction services
etc who was actually providing that number you know how much of a give and
take the construction manager at risk is providing that number but remember
that's not the first time you're seeing it so part of their obligations during
pre-construction services is they're running that number and refreshing that
number as the scope is being developed throughout design right so there should
not be when you see that GMP proposal number it should not be a surprise to
you if it is you need to maybe find another CM at risk because they're
They're supposed to throughout the design phase be telling you this is where we are.
This is what it's going to cost.
They're talking to the subcontractor market.
They're using that takeoff cost estimating software to make sure that you're within budget
and if you're not, you're making adjustments then and there during the design phase.
So they give you a proposal.
Here is the proposed guaranteed maximum price, all broken down by CSI division, concrete site, framing, everything.
You get to see every line item, their job costs, their profit.
So all of that will be in there.
Now, you pour through it, and this is a long process.
By the time you all see the GMP amendment here at the board, that final number, there
are weeks of work going on where they're looking at subcontractor proposals, they're looking
at line item pricing, they're negotiating, okay, we need to reduce scope or change, we
need to make some changes here.
So it is a negotiation.
And there have been times where a school district gets to a point and they just aren't happy
with the GMP proposal and they think, you know, I just am not sure that these subs are
giving us their best price or maybe not a lot of subs bid.
It happens sometimes where they go out for sub bids and one concrete company will respond.
And that's very disappointing.
There's a lot of work out there.
You're competing with other owners.
They may be busy.
And so you can make them rebid subcontractor packages, or you may decide, you know what,
we've got a great set of plans and specifications.
We're just not seeing eye to eye.
We're going to terminate you for convenience.
Thank you.
Pay you for your pre-construction services.
And now we'll put this out as a CSP project.
So if you're really unhappy with the construction manager at risk, what they're coming up with,
yep there's always that absolutely if you if it's if you're seeing it's developing the way you don't
want it to that is correct how often does that happen oh it happens it happens more often than
anything it was happening a lot more during covid because there was so much fear factor
built into these gmps the subs were doing it the c mars were doing it so we were doing it a lot more
But I would say I probably write those termination letters for clients a couple times a year.
Is there a legal risk with saying, I'm sorry, I think we're going to change to CSP?
Nope.
The contract says up front, in fact, the AIA contracts have a provision in there that if you cannot agree upon a guaranteed maximum price, the owner may terminate for convenience.
And you just pay them for the pre-construction services.
When they're negotiating back and forth with a CMR or a CSP,
and say we decide that we don't want to do the CMR,
we want to terminate that and we want to go with the CSP,
is that really happening kind of before it gets to the board?
So once it gets to the board, our people, our teams,
have not needed our input to go ahead and say,
we terminated this and we shifted to that.
Does that, am I understanding that correctly?
Yes, I understand you perfectly.
Yes, that groundwork will be done before you see it.
They're not going to bring you a GMP that they don't feel confident in.
But you'll know about it because you as the board have to approve the project delivery
method, right?
So you will have approved that project for the CMAR method and then they have to come
back to you and say, we couldn't reach an acceptable GMP.
we would like your approval to put this back out as a CSP project okay so what's
the I like the sound of a CMR but I'm a newbie here but it just seems smart it
seems like we're always on a strict schedule and on a timeline so the risk
would be the fees I guess that you're paying upfront what that looks like and
and if that would be potentially a sunk cost or too big of a cost.
Because you can always revert to a CSP if it wasn't working out well.
You get great design input ahead of time, hopefully efficient plans.
So what am I missing?
You've got it exactly right.
You pay a premium for those pre-construction services.
There's also a higher level of skill.
Not all general contractors can be CMARS, right?
One, because it requires an incredible amount of record keeping in terms of your costs because it's an auditable project, right?
You've got to watch every penny.
So there's a higher level of supervision at the project management level of the general contractor team.
But for us, right, go for it.
You need to audit.
But for us, the district, right?
Yes.
And, look, there are districts that I work with.
with they don't like it because they're afraid of it.
They don't have the time or the bandwidth to really dig in and hold the contractor's
feet to the fire on the cost billing.
They just don't have it.
Your team does.
And so there are districts that just stick with CSP.
There's some that only you see them at risk.
And what do I think makes a successful bond program is knowing which method works best
for which type of project because there's there's a benefit to each one
depending on the type of project which so which one do we use the most is it
CMR you use CMR for renovation or complex additions you use CSP for
for prototype repeat design, green grass.
So where does the architecture firm fit into this process?
So on a CMAR, you mean in terms of helping you decide the method?
Helping you to decide the method, what's their position, you know, where do they fit in.
So I'm assuming they don't have anything to do with the competitive sealed process, do they?
They do.
And, in fact, that kind of dovetails is a great segue into the evaluation discussion
because the architects are pretty indispensable in helping you navigate through both types.
So they're going to design the project no matter what.
Some architects are better suited for CM at-risk projects.
They've got to have the maturity to sit at the table and have a contractor tell them
that's a terrible idea or you're designing over budget.
They've got to be a team player.
And they're also, it's a higher quality architect that you want on a CMAR project because somebody
is going to be catching those errors and omissions and you've got to work quickly to resolve
those in a collaborative way.
Now, on the flip side of that, you have to have a high quality architect for CSP as well
because nobody's going to be checking their homework, right?
Those plans are going to go out on bid day.
Everybody's got a grand total of maybe three weeks to study them.
And if there's an error, if there's omission, if there's a conflict, those are going to
be resolved through the change order process, right?
Right? So having, you know, we talked about what makes an attractive owner and draws the best contractors and subs.
It really starts with having high quality architects.
And I'll just tell you, I know there are contractors out there that when they're looking to bid a project,
that's the very first thing they, the first thing they look for is who's the owner.
The second thing they look for is who's the architect.
They do not want to be the bad guys having to nickel and dime on a bad set of plans.
So, along with that, on the competitive sealed proposal, when we hired, obviously, the architectures
to do the design, and then, like you said, then they just have to, the people just have
to do it.
So, then, would we ever use the architectures again to, you know, evaluate the job that
they did?
Yes.
So, the architect stays with you through the entirety of the project.
Okay?
So they do most of their work up to the time where the project is permitted,
but then they stay on for what's called contract administration.
Part of their fee is staying on, being at those weekly job site meetings,
answering RFIs, requests for information.
Contractor will send a question.
They need something clarified.
They're trying to figure something out.
So the architect stays throughout answering questions,
sometimes issuing field revisions,
working with the owner to say, you know what, we need to call an audible here,
and they'll issue a design, a supplemental design or an instruction.
They review change order pricing to make sure that it's priced correctly
and scoped properly and is correct.
So they're a team player all the way through.
They walk the project to make sure that the pay applications reflect the work
that the contractor says has been done to the extent the contractor says it's
been done they walk through and help you develop the punch list look for
defective work warranty items so they're integral from beginning through one year
after substantial completion the architect will come back and do an
eleven-month walkthrough with you to catch any warranty issues so regardless
of which plan that is correct that is correct yeah so when we talk about the
best value evaluation and scoring and this is important for boards to understand because it's
a very fair question when you've got an agenda item in front of you and you're seeing a list
you know and somebody likes number one and somebody likes number four you know what options
do you have as a board and the legislature really doesn't allow for flexibility it's a very objective
objective and prescribed process. So this is statutory language here that you must state the selection criteria in the solicitation, the weights as we discussed. You have to evaluate and rank each proposal submitted in relation to the weighted criteria. This is for both CSP and CMAR. You shall select the offer that submits the proposal that offers the best value based on the published selection criteria.
and it's ranking evaluation.
So this comes straight out of statute.
So you as a board, you're at the end of the process, right,
and all the work that's been done evaluating and scoring.
Do you have options?
Well, of course.
You're the board, right?
You are the contract awarding body,
and by law you have to approve all contract awards
unless you've delegated that authority,
and you all have by board policy for certain dollar levels.
Your practice here at Katy is that contracts,
$250,000 or more, come to the board.
That's been your practice.
So what happens if you're up there and you're looking
and you have concerns?
One, you can ask questions, of course,
but your options are really three.
One, you approve the results of the administration's evaluation, scoring, and ranking, in which case you're statutorily obligated to award to the top overall scoring proposer on the overall best value with all the factors.
Option two, and we're going to look at the statutory basis for this next, you can reject the recommendation of the administration.
Okay, you can treat their recommendation as advisory only, but then you have to start
the process over.
You have a solicitation, you've had weighted selection criteria out there, everybody's
responded, so you all can be the evaluation committee.
You can review the proposals, you can fill out the score sheets, you can review the references,
you can do the price spread.
You all have to start over and review, score, rank, evaluate, and it has to happen in an open public meeting.
I only have one client who's ever done that before.
In fact, I'm going to be at a board meeting on Wednesday for a client who's doing this.
It's not for construction. It's for their external auditor.
They care very deeply about who the external auditor is, so they are going to be reviewing,
evaluating, filling out the score sheets in an open public meeting, voting to pick the
finalists, interviewing the finalists all in the open board meeting and voting for the
winner.
Most entities do not do that, but that is your option.
So if you do not like the recommendation, you can reject it, but then you are the evaluation
committee.
You can't just rearrange the results.
You have to start over wholesale and evaluate score rank.
Option three, and this happens when really you don't get adequate competition or you
think all the pricing is over budget or you're just not sure that this is the right way to
go at this time.
You can cancel the solicitation, re-bid it later.
You can make changes.
If all the bids or proposals are coming in over budget, you can say, look, let's go back
to the drawing board and try to re-scope this and see what we can do and amend the specifications.
You can't just say, I don't like your list, go re-bid it, bring me back a different result.
If you try to take a second bite at the apple but you haven't really changed anything, somebody's
going to file a protest.
But those are your options.
Any questions about that?
I'm going to put the statute up where this comes from.
I have a question.
Sure.
So I've been on the board for six years, and this is really good information
because I haven't had a lot of this information before,
so I appreciate your time with this.
But when we've been presented things, you know, that are new buildings
or renovations, whatever, we're shown a rubric.
Who came up with the rubric?
Excuse me.
Is that a KDIC rubric?
Is that a state rubric?
No, the legislature doesn't dictate what the weights need to be.
excuse me, so the administration comes up with the rubric.
And the way that works in your administration,
like other school districts in the area,
they are constantly communicating with one another.
And the reason it's not set by law or board policy
is that different projects may warrant different adjustments, right?
There might be projects where you want to be heavier on qualifications than price.
And I'm not just talking about construction.
I'm talking about any type of solicitation.
So you want the flexibility, but invariably it's the administration that comes up with that rubric.
And in consultation with other school districts in the area that are competing for the same contractors,
their statewide conferences and best practice trainings that they go to.
So I actually made a slide on that.
So here are the area averages here in the Gulf Coast area,
and really focusing more on the larger districts that both suburban and mid-urban that do a lot of building and bonds.
On CSP, price ranges between 30, some of those highs 40%.
The most common number is 30.
The average is 37.
You're at 30, which leaves about 70% for you all, 70% exactly for qualitative factors,
but you're roughly in line with the area averages.
On CM at risk, a lot of districts drop the price down, focus more on qualification factors.
You all are still at 30, but the average in the area drops down to 26%.
And that's something that I'm constantly working.
I know you all survey and your your neighbors survey everyone kind of communicates, but I
Keep an eye on it myself because when I see something that's pretty anomalous and like I tell you like I said the
beginning
The districts that have the most lawsuits
They're very high on price, I'm sorry we changed the most way that have the most
Most lawsuits are the ones that tend to be heavier on scoring price.
And I'll, you know, just in my experience, what I notice is when, you know,
when new companies or companies that are new to the area or maybe don't work a lot in K-12
or they're not getting selected by other districts,
when they see an opportunity to come in and undercut their competition with a lower price,
they can get in the door but it's if they're not a good quality contractor
you know it doesn't really end up being a lot cheaper once you're dealing with
somebody who just doesn't have the qualifications or experience or the track
record so there's a reason you see kind of this 30-70 split. Can I ask a question?
Sure.
So I would imagine that even though you say a district could change its weightings,
where it's rubric, that's not something you really want to be doing.
No.
Because it looks like you're customizing for a particular, you're customizing the weighting
for a particular project as opposed to keeping it more standard.
Yeah.
Where people can rely and know what it's going to be as opposed to...
Right.
Trying to come up with the answer, if you will.
Yeah, exactly.
And where I see adjustments made on an ad hoc basis is when you're using unique funding sources.
For example, when there was a lot of ESSER money or federal grant money,
the federal government, they like seeing price as the primary factor,
and they can be pretty persnickety if you're not very price heavy.
So if you're doing a federally funded project, you know,
and your child nutrition department is used to this price has to be the most heavily weighted factor when you're using federal funds so
You might have to adjust based on a funding source, or if you're getting funds from a county or a state
Agency for a grant project, but by and large
You find what works best for you, and you stick with it because you're right the contractors rely on it, and it's transparent
parent.
Ms. Morris?
Yes.
It's Rebecca.
So when we have a rubric, it's set, the rubric comes in, the score's there, can the construction
department or whoever's weighting those things and, sorry, analyzing them, can they just
choose which one they want or do they have to take the one that's ranked the highest?
They have to take the one that's ranked the highest.
So if the other one's like really close, just a few thousand dollars off, they can't just choose number two?
I have been on those losing in a bid protest where the number two is .0001 points behind,
but a million dollars cheaper, you will not win that bid protest.
Yeah.
So the qualitative factors that you all look at, again, you can't just,
It's got to be very detailed and described in your solicitation with the methodology.
But obviously you don't want to go with the cheapest.
What are you looking at? What matters to you?
What do you know works for a successful project?
And it changes from project to project.
You might have a vocational
project that you know is for a welding shop and you want somebody who has done work in vocational
projects before there are companies that are better on renovations than are a new build better
at athletic facilities better at high schools better at administration buildings so um and
you know what team uh performed well in your neighboring district might not be the team that
is being proposed for you, right? A company has many different people working for them. Some are
great. Some are okay. So you don't just look at the company. You look, who's going to be our
project manager, our area superintendent on this, our job site superintendent on this project? You
look at their subs, if it's not a CMAR. Financial stability and safety record is huge, particularly
particularly financial stability.
These contractors, they're billing you in arrears, right?
They're fronting a lot of cash and capital.
They're having to pay subcontractors sometimes before you pay them.
They're having to order materials on factoring credit agreements before they bill you.
So they need to have a solid financial record.
You want to make sure that they're around in three years if something cracks in your foundation, right?
right? And you want to know how responsive are they during the warranty period? Because they
can do a great job, but then, you know, once they pack up and leave, you know, the HVAC's not
working, right? And how responsive are they? Do they have integrity? Do they come back? Do they
fix things? So for that reason, reputation and references and school districts, as I said,
they communicate with each other. They give references for each other. And you get to score
or a vendor's past performance with you.
You're your own best reference, right?
You know how somebody's performed for you.
You don't punish somebody if they don't have any experience with you,
but you can reward them if they've done great work for you.
You can give them lower points if they haven't.
Quality of pre-construction services is critically important for CM at risk
because if you have someone that's just going to sit there at the table
and collect money and they're not really rolling up their sleeves during doing the hard work then
you're really missing one of the biggest benefits of cm at risk and so those are highly
scored areas of cm at risk evaluations and evaluation what i see in my experience is that
the best evaluation committees are you know full of subject matter experts and i'll tell you i have
districts where, nope, no one can talk to you, everybody's in a silo and we're
gonna have a principal and we're gonna have someone from curriculum and we're
gonna have some, you know, and then it's just a beauty contest of, you know, who's
got great paper. And so you will see evaluation committees that have the
architects on them. They see contractors in other contexts, they've worked with
them on other projects, they've worked with a lot of people in the same company,
There are great evaluators, internal, sometimes external project managers.
If it's something really HVAC heavy, you may have someone from your maintenance staff consulting
with you as far as how good are these folks with warranty and do their products and do
their installations stand the test of time.
I've been asked to be on evaluation committees.
I often decline.
Every once in a while I'll help interview.
view but there will be some projects where you bring in subject matter
experts if it's a child nutrition project you may have someone from your
John nutrition department if it's a technology heavy project someone from
technology or athletics or somebody who's in your vocational department
who's helping programmatically during the design phase I could ask questions
So what is our practice in KDIC in terms of the makeup of the evaluators or the team or the committee, what have you, that's doing the evaluating?
You all use your internal project managers.
You use your architects.
If it's a specialized project, not as a voting scoring member, but you may consult with a subject matter expert on issues related to, hey, past performance, how have they done from a maintenance standpoint, coming and fixing warranty items or technology issues.
issues if you need the consultation of a subject matter expert whether it's
internal or external you rate your e-rate consultant weighs in a lot on
projects that have e-rate funded technology but by and large it's your
internal project management staff and your design team there's does the what
there's one method way itself lend itself more to like an internal team
versus external for example the competitive seal proposal versus the
the construction manager at risk, you would think construction manager at risk, you might
have more external input?
No, they're both, they work pretty much the same on both.
And you want to keep it, you don't want to wander off far beyond your architect.
One, because it's a very confidential process.
You know, I often get questions, can board members be on committees?
Not a good idea because the vendors will never leave you alone, you know.
And you want to protect the integrity and confidentiality of the process.
So the best practice that I see is largely internal, maybe someone from the design team,
either the architect or if it's a very mechanical heavy project or a roofing project,
it might be a structural engineer or an MEP.
But having that design perspective is really important
because they see it from a different vantage point
than you do.
But it pretty much works the same for both.
Thank you.
I have a question.
Oh, go ahead.
Sorry.
I wanted to know, kind of,
I know we're talking about the evaluation
and really the evaluatory standards
that we have prior to the project starting
and then us as we're going along
and once it gets to where we, the board, say yes,
we want to move forward with this.
But do we have anything that gives us
an evaluatory standard after the project is done like a follow-up to where we can
say what went right what went wrong what where do we stand once the project is
finished how over budget were we work did we does that make sense it does the
districts who have in and you all without question I know do this and most
districts do this just like you would with an employee an exit interview you
You know, would I rehire this employee?
There's a lot of feedback that is shared at the end of a project.
What worked?
What didn't work?
How did this team work together?
How did they handle their own mistakes?
Things are going to go wrong on construction projects, right?
You just expect that you know it.
How do they handle those mistakes?
Do they stand up?
Do they act with integrity?
Do they fix it?
Do they take responsibility?
Are they demanding more money, right?
So there's a lot of communication that's documented because that's the best way, particularly if you have new project managers or you're working with new staff or it's a new contractor, you want to rely on other people in the district who know more about that vendor or other districts that may know more about that vendor.
So that's why references are important.
That's why keeping your own feedback data is important because it can be.
It can be.
The legislature has said past performance with the district, reputation, experience.
It can be considered in future solicitations.
So do we get presented kind of like a report card, so to speak, once everything's said and done?
We as the board, do we get to see that?
You certainly could.
Would I do that publicly?
Right.
I would not do it publicly.
Okay.
I wanted to just make sure I understood correctly.
You made us on the rubric and the price weighting and the value qualitative rating rankings.
It sounds like you made a statement, used a $2 million figure.
You have to go with that number one ranked vendor.
This bugs me.
Instead of that second place, who was .00 whatever on value behind number one, but would have saved you $2 million, we're talking about limited funding from the state, working with taxpayer dollars.
There's no threshold with the amount of savings we could save, no exceptions allowed by the state.
Is that what you're telling me?
That is correct.
Okay.
That bugs me.
That is the way the statute is written.
I know.
No.
Okay.
Yeah.
Okay.
I have a question.
Is our rubric publicly known?
So do the IR subcontractors know what it is?
Yes.
It has to be published with the solicitation.
Okay.
I was asking.
And it cannot be changed.
So, yes.
So what you're doing then in that situation, and I understand how frustrating that can
be.
and but you know there has to be so at you know at what point a million dollars
difference I've got you know what matters to you and matters to you know
so but yeah that that's just the bright line rule of the way the statute is
written I wish there was flexibility there's an intelligent way to do that I
I would think.
But I'll be honest with you.
There are other types of governmental entities that do have more flexibility.
School districts do not.
And I'll just give you one example.
There is a local bidder preference that certain municipalities have where if a local vendor is within 3% of a not local vendor, you know.
No, but those options are not available to school districts,
and they're not available to large counties and cities.
So I would like to just finish my question.
I was asking that question for a specific reason,
because since the subcontractors know what the rubric is,
I just wanted to make it known that everyone knows what it is,
then they are used to this process.
So the subcontractors, this is not a new thing for them
where all of a sudden they're blown out by the .001 and then they're shocked.
They know this.
They know what the rubric is.
So it's no surprise to anybody, and they're used to going through this process.
They probably do lots of bids, and sometimes they get it and sometimes they don't.
So also I wanted to say one more thing.
So, our process of the rubric and our process for picking people and even the jocks and
all this, you made a statement at the beginning of your presentation, and I just wanted you
to restate that, that from what you have witnessed as a person that has very been around for
a while and done this a lot, the KDISD, just say what you said earlier.
This is a good way to me to end, at least as part of it.
I'm not saying you're done, but just circle back to what you said at the beginning.
What I said, and I mean it, is when I do this presentation, whether it's open session or
closed session for other districts, particularly districts in the area, you all are commonly
referred to as the gold standard.
In fact, I started out another program wanting to know, well, what is it that
that they do, that they don't have this problem,
they don't have this issue.
And so, in fact, Lisa knows.
I've called and gotten information from her.
I was like, I've got to go talk to this board.
And, you know, looking at your salaries,
looking at your attrition rates, looking at...
And it's impressive to other districts
that you all are not bringing in expensive outside program managers.
Your neighbors are not so lucky
and have not been sued, knock on wood.
So that's really impressive to me because there are over 1,200 school districts in this state,
and that we're looked at as the gold standard I think is very impressive,
and I really appreciate you saying that because I think it's good for everyone to hear that.
Thank you so much to all.
And you all may have heard that from trustees that you know from other districts who may have.
I have one more thing to say. I don't know if we're done or not, but I have really appreciated this. As I said before, I've been on the board for six years. We have an orientation class at the very beginning when we become new board members.
and we go through lots of, I can't even remember,
I just looked through my binder,
but we talk to all the different cabinet members
and it's a lot of information.
But I think this should be part of the orientation.
I would just like to suggest that to Dr. Grigorski and the team.
I mean, I know that this is pretty complicated,
but maybe it could be a more condensed thing
and maybe people won't remember it or not.
But I do think for me at least to know that there was some kind of process that's there
that we can more, I hate to say it, but more understand, respect that there's a process
and that it's governed by law.
So that's something that a lot of people don't know.
There's not much we can do about that.
That is correct.
And if you heard that from the get-go as a new trustee, I think that that would be very
valuable.
Yeah, I want to just mention I appreciate this board requesting this presentation.
I think it's been helpful.
I appreciate the curiosity of the board and the eagerness to learn more about this really important topic.
So I appreciate the board, again, interest in wanting to learn more about this because it is really critical.
Well, thank you, Mr. Perez, for putting this together.
And thank you, Dr. Gorski, for arranging it.
Did you have anything else?
I don't know if you wanted to add.
That was the end, unless there were any other questions.
I appreciate the opportunity to be here.
I agree it's very important.
And for new trustees, you don't know what you don't know.
So when you get stopped in the grocery store and somebody has a question,
it's important for you to be able to explain, you know,
what the rules are and what the limitations are.
Yes.
Could we just give them your cell number?
You do it so well.
Well, Mr. Perez and maybe it's really Mrs. Champagne, may I have a suggestion?
I don't know if your microphone will come closer to your voice or if it's just me,
but when you're turned that direction, I don't hear you very well.
So I don't know if it comes closer or not.
Would you like for me to repeat all of my questions?
For next month?
No.
For next meeting.
For next meeting, please.
Okay.
I'll be better next week.
Or you can just tell everything to me directly like that.
Thank you so much.
Thank you.
Great job.
Appreciate it.
It's been really helpful.
Again, thank you to the board for asking for this.
I appreciate it very much.
And thank you, Dr. Gorski, for putting it together and arranging it.
Thank you.
And if there's nothing else, then we're adjourned.
7.1 Board Work Study Meeting - June 17, 2024
And the next board meeting will be on June 17.
We have a work-study meeting June 17.
And on June 24th, we have our regular board meeting.
There being no further business for the board, this meeting is adjourned and the time is
713.
Official documents
Motions and votes
Recorded actions
MOTION 001 · AGENDA 5.1
PassedIt is recommended that the Board of Trustees sends notice of proposed termination of a term contract to Tompkins High School teacher, James Stone, for good cause, as discussed in Closed Meeting and directs the superintendent to give written notice to him of these proposed actions.
7 Yes · 0 No
| Trustee | Vote |
|---|---|
| amy-thieme | Yes |
| dawn-champagne | Yes |
| lance-redmon | Yes |
| mary-ellen-cuzela | Yes |
| morgan-calhoun | Yes |
| rebecca-fox | Yes |
| victor-perez | Yes |