OFCC Issues Annual Report, Proposes Rule Amendments

Construction Update

Date: November 17, 2016

2016 Annual Report

On October 28, 2016, the Ohio Facilities Construction Commission (OFCC) issued its Annual Report for Fiscal Year 2016. The Annual Report includes data regarding project delivery systems used for OFCC projects, descriptions of various programs administered by OFCC, and the dollar value of projects included in such programs. Following are some highlights from the report.

Since 2012, general contracting has grown from 13 to 23 percent of OFCC projects, construction manager at risk has grown from 0 to 50 percent and design-build has grown from 2 to 27 percent. During the same time, multiple prime contracting has decreased from 84 to 0 percent of OFCC projects. The vast majority of project value was allocated to construction manager at risk projects, with $288.9 million spent on such projects in Fiscal Year 2016, as compared to $8.2 and $20.1 million for general contracting and design-build, respectively.

In Fiscal Year 2016, the Performance Contracting for Schools program saw more than $44.1 million spent on construction and renovation work to incorporate energy-saving facility improvements at 24 K-12 school districts. It is expected that these projects will result in $3.8 million in annual savings over the life of such projects, which is typically 15 years.

As of June 30, 2016, the School Security Grant Program disbursed nearly $13.6 million in grants to public, private, parochial and chartered schools for specific security enhancements for school buildings, including emergency communications systems. An additional $3.5 million has been approved and will be disbursed in accordance with program requirements.

During Fiscal Year 2016, OFCC administered nearly $87 million for 230 cultural facility projects that were authorized by the Ohio General Assembly. These projects include nonprofit theaters, museums, and art and historical facilities, as well as projects for science and technology organizations.

The Encouraging Diversity, Growth & Equity (EDGE) program establishes goals for state agencies, boards and commissions in awarding contracts to economically and socially disadvantaged business enterprises. In Fiscal Year 2016, nearly $93.7 million in contracts were awarded to EDGE certified business enterprises.

Proposed Amendments to OAC Section 153:1

Also on October 28, the OFCC filed proposed rule changes to Ohio Administrative Code (OAC) Section 153:1 related to public facilities construction. Most of the proposed revisions are minor language changes and updated references to websites where OFCC documents can be found. There are, however, several proposed revisions that impact the prequalification and pre-design process for public improvements.

First, OFCC introduced a new section (153:1-9-01) regarding the method and timeline for adjusting the public bidding threshold for inflation. Every five years, the OFCC executive director will evaluate and adjust the public bidding threshold based on the average annual consumer price index, all urban consumers, Midwest, all items, for the previous five calendar years. The threshold will then be adjusted by multiplying the calculated preceding five-year rate of inflation by the baseline public bidding threshold and rounding the result to the nearest $5,000. As of January 2017 and for five years thereafter, the public bidding threshold will be $215,000.

Second, OFCC proposed changes to the electronic bidding procedures (153:1-8-01), which will require interested bidders to properly register in the state’s enterprise electronic bidding system or web-based subscription service prior to submitting a bid.

Finally, OFCC proposed changes to the best value selection process for construction managers at risk and design-builders (153:1-6-01 and 153:1-6-02). The revised administrative code sections require that a public authority’s evaluation committee for selection of a construction manager at risk or design-builder “shall not consist of enough members of a public body to constitute a quorum.” This revision makes clear that when an evaluation committee meets to select a construction manager at risk or design-builder, it is not a public hearing. This change would prevent selection committee meetings from becoming open to the public, which would permit competitors for a project to observe the meetings, including other competitors’ interviews.

A public hearing regarding the proposed rule changes will be held on November 30 at 2:00 p.m.


For more information, please contact:

Jeffrey R. Appelbaum

Heather A. Bartzi

Ross C. Eberlein

Patrick J. Sweeney

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.