Hot Topics in School Procurement, Construction, and Contract Law

The January 20, 2021, Wednesdays with Wightman Town Hall session featured guest presenter Jeremy S. Motz, Esq, partner with Clark Hill PLC.

Jeremy has been practicing law for almost 16 years. The majority of his practice focuses on assisting schools with a wide variety of legal issues. In addition to providing general counsel legal services to schools and their respective boards, Jeremy focuses on matters involving procurements, construction, real estate, transportation, custodial, operations and food service contracts, cell tower leasing and business, and operational contracts.

During the town hall, Jeremy covered a number of bid- and procurement-related issues resulting from the restrictions and changes during the pandemic and the ways schools have adapted to remain in compliance with the law.

• Common Misperceptions of School Purchasing Laws 
  Key questions schools have been raising as they look for ways to cope with logistical challenges posed by the pandemic include:

• Are there any exceptions in Sections 1274 or 1267 to allow sole or single source procurement?
  There are no sole or single source exceptions. The bid process must still be used.

• Are there any “emergency” exceptions to the bid process?
  Yes, but only as it applies to building repairs, not supplies, materials, or equipment. Competitive bids can be bypassed if building repairs address emergent issues that affect the health, safety, or welfare of the buildings or occupants of those buildings.

• Can consortium or cooperative bidding be used?
  Yes, for supplies, materials, and equipment. However, the processes of theses channels may not always be compliant. It is up to each school to verify legal requirements are being met. Using consortiums or cooperatives for construction projects can be especially problematic. Extra care is needed to ensure all legal and school board requirements are met.

• Are there any provisions to waive legal requirements vs. RFP/procedural requirements?
  Legal requirements related to bids and procurement cannot be waived. However, if school-specific RFP/procedural requirements exceed what is required by law, those more stringent regulations can be wavied as long as legal requirements are followed.

• Is a licensed architect or engineer required for construction projects?
  If a construction project is valued at over $15,000, a licensed architect or engineer must design plans and specifications, regardless of bidding requirements. It is worth noting that under Michigan law, professional services such as architectural and engineering, do not need to be competitively bid, though many school districts choose to do so.

School Construction – Nuances of Section 1264

Section 1264 has a new requirement schools must meet when planning major construction or renovation of school buildings, where school buildings are defined as structures used by students for instruction, recreation, or athletics. In addition to working with a licensed architect and having the State review all design plans, school districts, intermediate school districts, and public school academies must now also consult with local law enforcement agencies with jurisdiction to serve as first responders for that building.

The review is designed to provide input that enhances safety and aids in emergency response. Implementation of all recommendations is not required; however, it is advisable to implement as many as reasonably possible. It is important to note that “major” and “consult” are not clearly defined, so reasonable judgement needs to be used related to these. Ultimately, though, the State has the final approval authority on designs.

Legal Aspects of Purchasing – Electronic Bid Submissions & Virtual Bid Openings

Pandemic school closures and gathering restrictions have raised concerns about how schools can comply with bid submission requirements. To adapt, many schools have migrated to electronic bid submission platforms.

A key to using electronic platforms for bid submissions is the availability of a lock box feature to prohibit the school district from opening bids until a specified day and time. Email submissions do not meet the sealed bid requirement. The electronic bid submission platform must also allow the saving of all bids to keep on file. Schools need to clearly delineate in the RFP and in any advertisements how electronic bid submissions will be accepted. It is also recommended that some sort of drop off or mail-in submissions be accepted, if possible, so as to not exclude any potential bidders.

During the Q&A session, Jeremy noted that it is permissible for schools to alert specific contractors, after the RFP has been made public and advertised, that the district is seeking bids for a project. It is also permissible for a district to remove and reject all bids and rebid the project at any time and for any reason.

When it is time for pre-bid meetings and public bid openings, virtual meetings can be used as long as various issues are addressed. Section 1267 requires that bids be opened and read aloud in a public forum. To make sure everyone is aware of the virtual meeting format and how to attend, it is best to include the Zoom address or other access links in the RFP and in all bid advertising. Attendance can be documented using screen shots or through video recording of the meeting. As bids are open, it is important to show that none were opened prior to the online meeting.

Legal Aspects of Purchasing – Emergencies and Delays

Emergency purchasing has been an issue during the pandemic. An example has been the necessity to quickly acquire personal protection equipment (PPE) to allow teachers’ and students’ safe return to the classroom. Section 1274 requires Board approval for large dollar purchases. However, since all schools were competing for a limited supply of PPE, waiting for the next Board meeting for authorization often meant missing out of available supplies.

Two methods to deal with this while staying in compliance with the law are 1) purchasing through cooperatives, and 2) receiving blanket approvals from the Board. Blanket approvals provide administrators authorization to purchase designated items up to a certain dollar amount from approved vendors or consortiums.

Another challenge many schools have faced during the pandemic is that of bid opening delays caused by quarantines, shutdown orders, and gathering restrictions. Something schools can consider is including contingencies in RFPs and in the advertising of the bid process to provide flexibility for acts of God and delays on the district’s end. Jeremy noted that vendor issues, such as bids not arriving on time, cannot legally be used to delay the bid opening process.

The next Town Hall meeting on Wednesday, February 17. Watch your email inbox for more details. The playback of the January 20 Town Hall is below.