Least-cost policy for public improvements
- • requirement to file list of planned projects and estimated costs and to identify projects contracting agency intends to complete with own personnel and resources
- • required analysis
- • exceptions
(1) The policy of the State of Oregon is that contracting agencies shall make every effort to construct public improvements at the least cost to the contracting agency.
(2)(a) Not less than 30 days before adopting a budget for the subsequent budget period or before starting to construct a public improvement, each contracting agency shall prepare and file with the Commissioner of the Bureau of Labor and Industries a list of every public improvement that the contracting agency plans to fund in the budget period, identifying each improvement by name and estimating the total on-site construction costs. The list must also state whether the contracting agency intends to perform the construction through a private contractor.
(b) If the contracting agency intends to use the contracting agencys own equipment or personnel to perform construction work on a public improvement, and the estimated value of the construction work that the contracting agency intends to perform with the contracting agencys own equipment or personnel exceeds $200,000, the contracting agency shall file with the commissioner not later than 180 days before construction begins on the public improvement an analysis that shows that the contracting agencys decision conforms to the policy stated in subsection (1) of this section. The list and the analysis are public records and the contracting agency may periodically revise the list or analysis.
(3) As part of the analysis required under subsection (2)(b) of this section, a contracting agency shall:
(a) Estimate the cost of contracting with a private contractor to construct the public improvement, including in the estimate all necessary and related costs that the private contractor would incur to construct the public improvement;
(b) Estimate the costs the contracting agency would incur in constructing the public improvement with the contracting agencys own equipment or personnel and include in the estimate:
(A) The cost of labor, including all benefits the contracting agency pays to or on behalf of employees of the contracting agency who will work on the public improvement, workers compensation insurance premiums and the cost of traveling to and from the site of the public improvement;
(B) The cost of equipment, including costs associated with leasing, renting or acquiring and owning the equipment, costs for transporting the equipment to and from the site of the public improvement, costs for depreciation and costs for insuring, operating, storing, repairing and maintaining the equipment;
(C) The costs of administration and overhead the contracting agency will incur, including insurance, shop and office costs that are allocable to the public improvement;
(D) The cost of tools and materials;
(E) The costs associated with any contracts into which the contracting agency must enter;
(F) The commercially reasonable value of quality control testing if the contracting agency would require quality control testing for the work that a private contractor performed on the public improvement; and
(G) Any other necessary and related costs that the contracting agency will incur to construct the public improvement with the contracting agencys own equipment or personnel; and
(c) Compare the cost the contracting agency estimates under paragraph (a) of this subsection with the cost the contracting agency estimates under paragraph (b) of this subsection.
(4) Before a contracting agency constructs a public improvement with the contracting agencys own equipment or personnel, the contracting agency shall:
(a) Prepare plans, specifications and estimates of the unit cost of each classification of construction work that are sufficient to control the performance of the construction work and ensure satisfactory construction quality, if the estimated cost of the public improvement exceeds $200,000; and
(b) Prepare and preserve a full, true and accurate account of the actual costs of performing the work, including all categories of costs described in subsection (3)(b) of this section. The final account of the costs is a public record.
(5) Subsections (2) to (4) of this section do not apply to a contracting agency if:
(a) The public improvement is for distributing or transmitting electric power; or
(b) The contracting agency did not receive a responsive bid or proposal for constructing the public improvement from a responsible bidder or proposer after soliciting bids or proposals for constructing the public improvement, if the solicitation:
(A) Occurred within one year before the date on which construction began; and
(B) Allowed a commercially reasonable time in which to perform the construction.
(6)(a) Except as provided in paragraph (b) of this subsection, for purposes of this section, resurfacing highways, roads or streets at a depth of two or more inches and at an estimated cost that exceeds $125,000 is a public improvement that is subject to the listing, analysis and accounting provisions of subsections (2) to (4) of this section.
(b) A public improvement does not include placing maintenance patching, chip seals or other seals as a maintenance treatment on highways, roads, streets or bridges.
(c) A contracting agency shall prepare and preserve a full, true and accurate account of the actual costs of performing road or street resurfacing if the actual or estimated cost of the highway, road or street resurfacing exceeds $125,000.
(7)(a) The Bureau of Labor and Industries shall conduct a review of:
(A) The costs described in subsection (3) of this section to determine whether contracting agencies must adjust the methodology for calculating the costs;
(B) The threshold amounts specified for conducting the analysis described in subsection (2)(b) of this section and preparing the specifications and cost estimates described in subsection (4) of this section to determine whether to adjust the threshold amounts; and
(C) Other aspects of the implementation of the policy set forth in subsection (1) of this section.
(b) The bureau shall conduct the review described in paragraph (a) of this subsection every four years, beginning in the last calendar quarter of 2021, and in consultation with affected contracting agencies, contractors and trade associations. The bureau shall communicate the results of the review to all contracting agencies, shall make the results available to interested persons upon request and shall report the results to the Legislative Assembly not later than January 1 of the calendar year that follows the year in which the bureau conducted the review. [2003 c.794 §98; 2017 c.715 §1]
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