Design-Build Contracts Allowed for Schools and Municipalities

by Meganne Trela and Nicholas DeConcilis

Effective January 1, 2024, the Illinois General Assembly is changing the way municipalities contract for building schools in an effort to increase the efficiency and effectiveness of delivering public projects in Public Act 103-491. This new law changes the delivery system for construction projects to a design-build process from a design-bid-build process. Municipalities and school districts will now be able to enter into a singular contract with the designer and builder which would allow the two to collaborate throughout the project. In the former design-bid-build process, schools and municipalities contracted separately with designers and builders.

The amended law creates a new process for bidding projects as well. Schools and municipalities must publish their intent, in any manner required by ordinance, at least 14 days before a request for proposals. The notice should include the name of the school district, proposed budget, and proposed schedule for completion in addition to several other factors. See 105 ILCS 5/15A-15(b). Finally, the due date for proposals must be at least 21 days after the request for proposals.

Additionally, the notice must be made in conjunction with a licensed design professional. The notice, and subsequent request, for a proposal must include sufficient enough detail so that a potential bidder can fully flesh out their proposal. Therefore, it requires descriptions of the overall needs, delivery requirements, scope, and performance needs. Moreover, the design-build contract may be conditioned upon subsequent refinements. In other words, the school district and/or the municipality may make modifications to the project scope without invalidating the contract.

The selection process has also changed to a two-phase approach for selecting bidders. Phase one includes a short list of who is qualified for the project. Once selected they move into phase two in which the technical and cost proposals are considered. As it pertains to phase one, the school or municipality must include their evaluation criteria and must maintain records should there be a protest regarding solicitation. The statute evaluation criteria must include financial capability, reference checks, and experience with similar projects. After passing phase one, shortlist candidates must be made aware in writing.

Phase two must also make shortlist candidates aware of evaluation criteria, but project cost cannot be weighted for more than 30%. Lastly, school districts and municipalities must directly employ a licensed design professional to ensure that the projects fit industry standards and are feasible. If the project is under $12,000,000, then phase one and two can be combined.

Contracts should be awarded to the bidder with the overall highest ranked design-build entity. The winner and any unsuccessful bidders must be notified in writing. School districts and municipalities are allowed to negotiate after awarding but before contract execution to secure better terms on salient issues.

Lastly, the design-build entity must detail, in writing, their efforts and success in implementing the entity’s plan to comply with the utilization goals for business enterprises established in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act, and the provisions of Section 2-105 of the Illinois Human Rights Act at the end of every 6-month period prior to final contract payout.