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Bill > HF564

IA HF564

A bill for an act relating to contracts for the construction of public improvements.

summary

Introduced
02/24/2025
In Committee
02/24/2025
Crossed Over
Passed
Dead

Introduced Session

91st General Assembly

Bill Summary

This bill relates to contracts for the construction of a public improvement. The bill allows a governmental entity to reject the lowest responsive bidder for the construction of a public improvement under Code chapter 26 or the lowest cost construction manager-at-risk for a guaranteed maximum price contract under Code chapter 26A due to the bidder’s or construction manager-at-risk’s experience, number of employees, or ability to finance the cost of the public improvement. A rejected bidder or construction manager-at-risk may maintain an action against the governmental entity, challenging the governmental entity’s action as fraudulent, arbitrary, in bad faith, or an abuse of discretion. Under current law, a governmental entity is authorized to enter into a guaranteed maximum price contract for the construction of a public improvement. The bill allows a governmental entity to enter into such a contract only if the estimated cost of the project exceeds $150 million. The bill requires each proposal submitted by a construction manager-at-risk to include the proposed costs for general conditions. The proposed fees and costs may not contain a contingency. A bid containing a contingent amount must be rejected. The bill provides that a governmental entity or representative must select the construction manager-at-risk that submits the lowest cost proposal, based on the published selection criteria and its ranking evaluation, rather than the proposal that offers the best value. The bill strikes a requirement that the governmental entity consider whether awarding a contract to the construction manager-at-risk who was not the apparent lowest bidder is in the best interest of the project. If the estimated cost of trade contract work and materials packages exceeds the adjusted competitive bid threshold, the bill requires the construction manager-at-risk to direct the designated licensed engineer, architect, or landscape architect to prepare and make available plans and specifications for the public improvement project.

AI Summary

This bill modifies regulations for public improvement construction contracts in Iowa, introducing several key changes. The bill allows governmental entities to reject the lowest responsive bidder or lowest cost construction manager-at-risk based on factors like experience, number of employees, and financial capability, but requires the entity to specifically explain its reasons for rejection. The rejected bidder would then have legal standing to challenge the decision. The bill restricts guaranteed maximum price contracts to only projects estimated to cost over $150 million. It mandates that construction manager-at-risk proposals must include proposed costs for general conditions without any contingency, and any bid containing a contingent amount will be automatically rejected. The selection process for construction managers is also modified, requiring entities to choose the lowest cost proposal based on published criteria, rather than the previous "best value" approach. Additionally, the bill removes a previous requirement for governmental entities to evaluate whether awarding a contract to a non-lowest bidder is in the project's best interest. For trade contract work exceeding a certain cost threshold, the construction manager-at-risk must now direct a licensed professional to prepare and make project plans and specifications available, and must follow specific bidding and evaluation procedures.

Committee Categories

Government Affairs

Sponsors (2)

Last Action

House State Government Committee (09:00:00 2/26/2025 RM 103) (on 02/26/2025)

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