Master Builders of Iowa

Guide to Legal Issues on the Bidding
and Award of Construction Contracts in Iowa

WHAT’S NOT LEGAL IN PUBLIC SECTOR PROCUREMENT

Performance Contracting – The practice often referred to as “performance contracting,” which combines finance, design, build, maintenance and operation all into one package is not permitted under Iowa’s competitive bidding laws.  The “Request for Proposal” process usually conducted in conjunction with performance contracting does not meet the competitive bid requirements outlined under Iowa Code as discussed above, since bidders are not competing on the basis of a single set of plans and specifications.

Design/Build Project Delivery Method – The design / build procurement system is not allowed under Iowa’s competitive bidding laws unless the criteria to be used to select the successful bidder is lowest price, assuming bidder responsibility.  Design/build projects are rarely, if ever, structured to award the project to the lowest bidder.  While some other states allow this method of project delivery system for public projects, design / build has not been utilized to any real extent in the public sector in Iowa because of the competitive bidding requirements.

Construction Management (CM at Risk / Guaranteed Maximum Price) – The CM at Risk / guaranteed maximum price delivery system would undoubtedly not pass muster under Iowa’s competitive bidding laws.  Under this form of project delivery, the CM guarantees to the owner that the cost of the project will not exceed a certain price.  Under this form of Construction Management, the CM usually contracts directly with the trade contractors.  In this respect, the CM at Risk form of project delivery closely resembles the design / bid / build model.  The agency form of construction management is permissible as a professional service.