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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
AMENDED
school districts: procurement practices; auditors
Purpose
An emergency measure that removes certain 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 the 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, by September 1, 2019, the School Facilities Board (SFB) to select three school districts with ongoing or planned procurements of construction services using alternative project delivery methods to establish a School Procurement Consulting Pilot Program (Pilot Program).
5. Requires one selected school to have an average daily membership (ADM) between 2,000 and 8,000, and two selected schools to have an ADM of less than 2,000.
6. Requires the SFB to provide technical assistance and procurement consulting services to the school districts, including:
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.
7. Requires the SFB to provide guidance and advice to a selected school district's procurement evaluation committee, if any, and prohibits the SFB from serving as a voting member of the committee.
8. Requires selected school districts to agree to participate in the Pilot Program.
9. Requires the selected school districts' ongoing or planned procurements of construction services and alternative project delivery methods to be SFB-approved projects or locally-procured projects that are not submitted to or paid for through the SFB.
10. Requires the SFB, by September 1, 2020, to submit a report of its findings to the Governor, President of the Senate and Speaker of the House of Representatives, the chairpersons of the Senate Education Committee and House of Representatives Education Committee, or successor committees, and provide a copy to the Secretary of State.
11. Repeals the Pilot Program on February 16, 2021.
12. Defines construction.
13. Becomes effective on signature of the Governor, if the emergency clause is enacted.
Amendments Adopted by Committee
1. Transfers the Pilot Program from the Arizona Department of Administration to the SFB.
2. Requires two of the three selected schools to have an ADM of less than 2,000.
3. Removes school reporting requirements and requires the SFB to select schools by September 1, 2019.
4. Requires selected to schools to agree to participate in the Pilot Program.
5. Changes the report date.
Senate Action
ED 2/19/19 DPA 8-0-0
Prepared by Senate Research
February 21, 2019
JO/LB/gs