Prison Construction in Alabama 2021Alabamians expect Elected Officials to protect their tax dollars and provide transparency in decisions – especially something as expensive as prisons.
Gov Ivey has delivered her draft prison construction bill to legislators for review.

o   Phase I –  Design Build 2 male facilities (circumvent the competitive bid law on construction and bonds)

o   Phase II – Renovate 3 male facilities and build a new female facility – following the Title 39 Competitive Bid Law

o   Phase III – Determine next steps based on inmate population and other factors.

Haven’t we had this exact same plan before? 

Over the past 6 years two Governors have attempted to build prisons.  Why does it fail?  Because they both want to circumvent the bid law and hand pick their contractors.  In February 2016, Gov. Bentley introduced his Prison Transformation Initiative Act which called for the construction of new prisons using Design-Build.  If they had followed the competitive bid law we would already have these new prisons.   

What’s the latest? 

This latest draft bill proposes to use the Design Build Process on Phase I  (the Sept 6 draft summary you received says the construction will be “design-bid” – either they don’t understand the construction process or they are trying to mislead you). Draft Bill Page 21 line 26 – Page 22 line 14. 

DEFINITIONS:

Competitive Bid Law:  Design the project then bid the project out and then build the project. Exact cost of the project is determined.  Additionally, contractors are held to a predetermined timeline.

Design-Build:  Eliminate the bid process, eliminate the competition. Build as you go.

About 150 years ago, our forefathers bestowed the competitive bidding concept on us in order to curb corruption, inefficiency, and mismanagement by government officials. This is called Design-Bid-Build.

What’s in the draft bill? 

•  Selects the team or a portion of the team that already qualified to design-build the prisons under the failed lease agreement. Draft Bill Page 21 line 26 – Page 22 line 4
  • Caddell has been chosen to build the first facility in Elmore Co.
  • Harbert has been chosen to build the second facility in Escambia Co.

• If the state arbitrarily decides to change their mind about these contractors they may simply write up a new design build contract. (no bid, no questions asked) Page 22 line 5 – 14.
• To accomplish this the Authority will create some qualifications, interview and award the contract based on subjective qualifications and best practices. Page 22 line 15 – 25. 
•  “The authority may award a contract through any other procurement authority, proposals, or other means of procurement otherwise available for public works projects in this state.” Page 23 line 3 – 6  
•  The Authority can award the prison construction projects to the same contractor (one of their own choosing – remember from above). Page 23, 12 – 16.
• The Authority requests a “guaranteed maximum price for each project.” Page 23 line 20.  However, case law has determined that contractors cannot be held to a guaranteed maximum price. The concept of a guaranteed maximum price (GMP) is something of a myth in practice. 
•  If the State would simply competitively bid the project it would not be necessary to “leave to the discretion of the authority” the right to require competitive pricing. Page 23 line 26 – 24 line 2
• Indicates that they will “encourage” minority businesses to participate in the construction process.” Page 13 lines 1 – 3, and to “compete on an equal basis.”

However, the only way to accomplish this is through a fully competitive bid process.  Under the proposed scheme the General Contractor will be hand-picked.  The GC will then determine who the subs are  – even if they are bid out. The subcontracts will have already been agreed upon when the deal is finalized.  When you start a process that is unfair the whole process ends up unfair. 

Phase 1 should be held to the same standard of transparency as all of the other prison construction.  There have been too many secrets surrounding prison construction in Alabama.  A lot of money and time has already been wasted. 

The State has set $845 million to build two prisons.  Is that price appropriate?

Draft Bill page 9, line 21”$60MM” & page 10 line 3 “$785 MM”

The only way to determine how much it should cost to build two prisons is to have General Contractors bid on the project. Competitive bidding is the consumers’ version of comparative shopping.

Why competitively bid the GC? 

Why is it so important to competitively bid general contractors?  If the subcontractors are competitively bid isn’t that enough?

NO, the Big Bucks go to the General Contractor so it is most important for this to be bid. Simply put, Design Build invites corruption and inflated pricing, while Design Bid Build safeguards against these.  This is the sole reason Design Bid Build is written into Title 39 of the Public Works Law in the Code of Alabama.

 Didn’t the ADOC provide a model when they selected Design-Build? 

Yes, exactly. And, the model ADOC wants to follow was a complete failure.

In 2018 the ADOC provided a comparative example of their Design-Build Prison Plan. The same plan they propose to use today. The example provided by ADOC is a prison project in Montgomery County, PA. This project used the Design-Build Construction Method. 

This Design-Build project was a disaster.  This Design-Build project was at least $30,000,000 over budget, 2.5 years late and the problems continued for months after moving in.  This should not be the example that we follow. 

Alternative Delivery Methods DO NOT SAVE MONEY and often DO NOT SAVE TIME!

I cannot answer why two Governors have wanted to choose their own contractors but I will tell you that the Competitive Bid Law protects taxpayers’ dollars and protects against coercion and collusion. 

Competitively biddingall public works projects is the law in Alabama. 

• Provides a quality product, delivered on time at the best price that the market can bear. 
• Brings transparency in the use of taxpayers’ dollars.  
• It’s the taxpayers’ method of comparative shopping. 

Design-Build is NOT competitive and should not be used on state construction projects.

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BONDS ARE NOT BEING BID EITHER:  Please be aware that they plan to negotiate the bonds too.  Although this is not my area of interest, it is extremely alarming that they have eliminated competitive bidding on two of the most financially lucrative areas of this prison construction project: the General Contractor and the bonds.