Governments and other public bodies in Oregon don't always have to take the lowest qualified bidder. There are exceptions under Oregon's bidding laws. Central Oregon Community College is considering using an exception when it bids out the construction of a new $22 million, 330-bed student dormitory.
COCC's choice appears to be justified — at this point.
There are good reasons why Oregon law generally insists on competitive bidding. Requiring the use of the lowest qualified bidder creates a level playing field for businesses seeking government contracts. It's a check on favoritism and other bad “isms.”
The exception COCC is considering is known as construction manager/general contractor, or CM/GC. Under CM/GC, COCC does not have to take the low bid. It is allowed to consider such things as the expertise of applicants. CM/GC also gives the contractor more ability to weigh in during the design of a project.
But one of the biggest benefits CM/GC can offer is greater certainty about price. Sometimes, buildings or projects turn out to be more expensive than anyone thought. Things are discovered during construction of the project that require change orders and can run up the cost.
CM/GC offers some protection against that. COCC would get a guaranteed maximum price. As long as costly changes were not COCC's fault, the contractor has to pay for them and the price of the building stays the same.
CM/GC is not perfect. The city of Bend built the downtown parking garage with a CM/GC contract. The guaranteed maximum price was $9.7 million. It cost the city $10.7 million, though primarily because of changes the city requested.
Governments that use CM/GC are also supposed to justify it. Under law, CM/GC bidding should still be competitive and there should be other benefits, such as cost and time savings. Governments are required to write up a report after the project ends to justify the use of CM/GC.
That all sounds good. It's the execution that is flawed.
When Bend filed its report on the parking garage, for instance, it said it had saved time and $500,000 on the project. But it didn't offer any details.
And to whom does the government submit this report justifying CM/GC? To itself.
That's not much of a check or balance on CM/GC.
COCC officials are aware of these concerns. We hope COCC will become a model of how CM/GC should be used.