State changes way contractors bid on work: Only one firm will oversee large projects

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SPRINGFIELD - Illinois officials are poised to change how they oversee major construction projects, saying a new law could save taxpayers money and make it easier to monitor cost overruns.

But, despite years of negotiations, some smaller contractors remain concerned about the new setup.

Beginning in January, taxpayer-funded building projects worth more than $20 million could be overseen by one contractor, rather than being parceled out to a number of contractors.

"This makes it simpler to track the progress of the project and isolate and correct problems," said David Blanchette, spokesman for the Illinois Capital Development Board, which oversees most major construction projects in the state.

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While officials say the pending change already have proven effective during two earlier test runs, some smaller contractors say they prefer the current way of doing business, in which their bids are opened separately and in public.

"There are arguments on both sides," said Louis Giordano, executive vice president of the Illinois Mechnical and Specialty Contractors Association. "Some of our members are not crazy about this."

Under current law, the state required all projects of more than $250,000 to be bid to five separate prime contractors.

The law originally was intended to protect subcontractors from unscrupulous general contractors, who might fire subcontractors if they don't underbid their projects or bring them in under budget.

But, beginning in 2005, several states, including Illinois, began moving to change that process.

As a test, the state experimented with the concept on two recent projects.

The state's Emergency Operations Center in Springfield was built using a single prime contractor, and a project aimed at upgrading the Capitol's heating and air conditioning system was managed in a similar manner.

Blanchette said the $13 million Emergency Operations Center was completed on schedule and had few cost overruns.

In negotiating the new law, the Illinois Mechnical and Specialty Contractors Association pushed for provisions that would protect plumbing companies, electrical contractors and other subcontractors it represents in Springfield.

One major concern was that without some safeguards, general contractors overseeing projects could shop around for subcontractors after they submitted bids, playing one company off another in search of the biggest profit margin.

The compromise was that the state would only use the new system in a limited way and on projects of more than $20 million, and all subcontractors would have to be listed on bidding documents.

Frank Colombo, owner of Colombo Electric in Herrin, said the provisions aimed at protecting smaller subcontractors were important to making the new law palatable to subcontractors.

Despite that, he said he prefers the current system.

"We would always prefer to be prime bidders on contracts," Colombo said.

Blanchette downplayed concerns voiced by smaller contractors, saying they are unlikely to be affected by the new law because of the $20 million threshold.

"Small contractors are unlikely to bid due to the difficulty in securing all of the bonding requirements necessary for such a large job," Blanchette said.

The first state project that will use the new system is Southern Illinois University's $54.5 million Transportation Education Center.

The 148,190-square-foot, two-story facility, as well as an adjoining storage facility, will be bid under one contract, rather than by separating the various types of work into different bids.

The Capital Development Board intends to call for bids for the project this month, but the project won't get under way unless lawmakers and the governor agree on a statewide construction program.

Lawmakers aren't scheduled to return to action until Nov. 19. The legislation is House Bill 2254.

kurt.erickson@lee.net|789-0865

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