Projects up to $3 million awarded by job-order contract instead of bids process, council decides

Queen Creek Councilman Jeff Brown listens intently during a recent Queen Creek public hearing. (Arianna Grainey, Independent Newsmedia)

The limit for single projects awarded under a job-order contract, instead of with a competitive bidding process, was increased from $1 million to $3 million by the Queen Creek Town Council.

The council voted 4-2 on March 6 to approve the change, with council members Jake Hoffman and Emilena Turley voting no and Mayor Gail Barney absent.

Scott McCarty

The town will develop a list of contractors through a competitive solicitation process where selection is based on qualifications, Scott McCarty, finance director, said in a memo to the council.

“Once selected, the town negotiates with the contractor to determine the rates or prices that will be included in the contractor’s final agreement,” he said, noting that all job-order contracts would be approved by the town council.

The changes to the town’s purchasing policy will save many hours of staff time that would otherwise be spent preparing formal solicitations and reviewing contractor bids on a project-by-project basis, Mr. McCarty said.

Arizona law states that the dollar limit for a single job-order contract project is $1 million, unless a municipality adopts its own dollar limit, he said.

“Because the town has not adopted its own policy, the town has been operating under this $1 million limit for all (job-order contract) projects. This means that all projects over $1 million currently follow a traditional bidding process,” he said.

Town staff members have identified seven utility projects in the next two years that are between $1 million and $3 million that could be completed four to six weeks sooner by using a job-order contract to hire a contractor, Mr. McCarty said.

“Given the volume and timing of the infrastructure projects that the town has planned in the next few years, staff recommends establishing our own per-project limit of $3 million. This higher (job-order contract) limit will increase the number of infrastructure projects that can be completed using this method, which will decrease the time required to complete those projects,” he said.

The town has more than 100 projects planned in the next eight to 10 years for transportation and utilities, Dan Olsen, the town’s deputy finance director, said to the council.

“Those projects are driven by the development that we’re seeing in the community and so, as staff, we’re trying to find ways to make our administrative processes more efficient so that we’re not getting in the way of that development and those projects can continue and get done as fast as they can,” Mr. Olsen said.

Councilman Jeff Brown asked if the best and most qualified contractor would be hired if there was no competitive bidding process allowing multiple businesses to be considered.

“With a (job-order contract), you’re right, you don’t always know you’re getting the best bid, because you’re not bidding. That is a risk. We feel that overall, the time that we save is worth that risk given the environment that we’re in right now,” Mr. Olsen said.

Mr. Hoffman asked what the drawback would be if job-order contracts for more than $1 million could be brought to the council on a case-to-case basis instead of a blanket increase in the amount.

Paul Gardner

“I think it’s just the timing issue,” Paul Gardner, utilities director, said to the council.

“If we knew that every time we came through … if we had good reason behind it — good, sound judgment; we could convince the council this is the policy, that we ferreted everything out and that we come to you with a good project, and we knew that we were going to 90 percent of the time get approval here over that — then I think that would give us comfort. If we thought it was a 50-50 proposition, then we’re like, ‘Well, maybe we should just go out to bid,’” he said.

“I think it’s pretty safe to say, at least in my experience both watching this council before joining as well as since, that infrastructure projects — we’re talking about critical stuff here, water, wastewater, roads things like that — are a very high-priority use to tax dollars. It’s critically important,” Mr. Hoffman said.

“I can’t foresee a scenario where this body would shut something down that staff brought forward under a case-by-case model unless there was really good reason to do that. I like the idea of checks-and-balances. It’s very kind of paramount and central to the American form of government.”

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