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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
school districts: procurement practices; auditors
Purpose
An emergency measure that removes restrictions on school district auditing and consulting services. Repeals the requirement that certain school district procurement contracts be awarded based on the lowest qualified bidder and establishes the School Procurement Consulting Pilot Program.
Background
The State Board of Education (SBE) must adopt rules for procurement practices for all school districts in Arizona that are consistent with the Arizona Procurement Code, with modifications as necessary. Procurement practice requirements vary depending on the project delivery method provided in the contract. Statute and SBE rule allow for the following project delivery methods: 1) construction-manager-at-risk; 2) design-build; 3) qualified select bidders list; and 4) job-order-contracting (A.R.S. § 15-213).
In 2018, the Legislature added the requirement that the SBE adopt school district procurement rules for materials, services, goods, construction or construction services that ensure maximum practicable competition. Effective July 1, 2019, the SBE school district procurement rules must require contracts to be awarded based on the lowest qualified bidder (Laws 2018, Chapter 285).
Laws 2018, Chapter 285 also caps the hiring by a school district of the same auditor or auditing firm at three consecutive years and prohibits an auditor or auditing firm hired by a school district from receiving consulting fees from the school district (A.R.S. § 15-213).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Repeals the requirement that SBE adopt rules for school district procurement requiring contracts for materials, services, goods, construction or construction services to be awarded based on the lowest qualified bidder.
2. Removes the prohibition on a school district hiring the same auditor or auditing firm for more than three consecutive years.
3. Removes the prohibition on an auditor or auditing firm hired by a school district receiving consulting fees from that school district.
4. Requires the Arizona Department of Administration (ADOA) to establish the School Procurement Consulting Pilot Program.
5. Requires, by July 1, 2019, each school district to submit to the ADOA a report that includes all upcoming procurements of construction services and alternative project delivery methods, including actual or intended start and completion dates of any bid invitations, requests for proposals or requests for qualifications.
6. Requires ADOA to select and provide procurement consulting services for three school districts with ongoing or planned procurements of construction services, at least one of which has an average daily membership (ADM) between 2,000 and 8,000 students, and at least one of which has an ADM of less than 2,000 students.
7. Requires ADOA to provide guidance and advice to procurement evaluation committees and prohibits ADOA from serving as a voting member of the committee.
8. Requires selected school districts to allow ADOA to assist in:
a) drafting specifications;
b) developing solicitations;
c) managing the procurement and construction processes; and
d) reviewing all bids, proposals, responses to requests for information, technical offers, statements of qualifications, specifications and protests.
9. Requires ADOA, by December 15, 2020, to submit a report of the findings to the Governor, President of the Senate and Speaker of the House of Representatives and provide a copy to the Secretary of State.
10. Defines construction.
11. Repeals the Pilot Program on February 16, 2021.
12. Becomes effective on signature of the Governor, if the emergency clause is enacted.
Prepared by Senate Research
February 15, 2019
JO/LB/gs