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Frequently Asked Questions

What are the criteria for determining whether a project requires State Building Commission (SBC) action?

  1. All projects funded by Capital Outlay or Capital Maintenance
  2. Any project over $100,000 funded by Major Maintenance or Operating Funds
  3. Anything that constitutes an improvement to real property
  4. Anything that creates new space
  5. Any demolition of real property
  6. Any gift or donation

How to decide what projects require SBC action when they´re under $100,000.

For example, if an agency wanted to replace old cabinets and repaint for under $100,000, it would fall under "maintenance" and would not require SBC approval. However, if they were expanding or putting new cabinets in a place that didn´t have any cabinets, it would constitute an "improvement", and would require SBC approval, regardless of cost.

Is there a procedure for sole source procurement?

The procurement agency needs to have the justifications of why a sole source procurement is in the State´s best interest and what safeguards are being used such that the vendor does not have freedom to charge extraordinary prices now or in the future. That justification should be developed and presented to the Office of the State Architect for approval.

What are the mechanics for determining the successful bidder on a project where there are Alternates?

  • Take the target amount and find the low bidder based on the base bid only.
  • Add Alternate #1 to the base bid and determine the low bidder, making sure the low bidder is within the target amount.
  • Repeat procedure with remaining alternates until all bidders are over target.
  • The bidder who gets the most number of alternates and is lower than anyone else, while still remaining under target, will be established as the official low bidder. This is the bidder with whom you will be selecting, assuming no other issues come up.
  • You can then award alternates in any combination as long as no other bidder, using the same combination, would not have been lower.

What is the difference between a Contract Bond and a Performance Bond?

The Contract Bond is a combination of a Performance Bond and a Payment Bond. A Performance Bond insures that the Contractor will do the work, or the work gets performed. The Payment Bond protects the Owner from any unpaid bills by employees, subcontractors, materials suppliers, etc. The bonding company is obligated to cover these costs for work performed or materials purchased.

How do State buildings get named?

The usual manner is by means of a Legislative Resolution for the particular naming. Governing Boards of various State institutions have named buildings in the past and should be the one to make the call whether or not any additional approvals are needed.

What constitutes putting a State plaque in a building?

It usually depends upon the significance of the project. If the project is a new building, massive renovation, or changing the function of an existing building, a State building plaque may be warranted. Basically, it is a judgment call.

Do grants to local City and County government agencies for construction projects require SBC approval?

Grants through the State´s capital budget for improvements to real property in which the State does not have an interest (i.e., it is on State land, the State has a leasehold interest in it, or uses it to perform State functions, etc.), do require SBC approval. Grants that do not involve improvements to real property owned by the State, do not come under the jurisdiction of the SBC. Monies expended on property in which the State has an interest that are for maintenance and exceed $100,000 are subject to SBC approval

What are the strings attached to grant appropriations?

Grantees have to satisfy the following: (1) If the grant amount is over $50,000, prevailing wage rates apply; (2) if the grant is over $100,000, a 100% contract bond is required; (3) the use of some form of competition is involved (i.e., low bid; RFP process involving qualifications and cost; low bid from a pre-selected appropriate group of contractors).

Is there an SBC policy relating to monuments on State property?

The State has a document titled "State of Tennessee Capitol Hill and Bicentennial Mall Guidelines", which establishes guidelines for the placement of monuments and markers on the Capitol grounds that were adopted by the State Capitol Commission. No other State guidelines or restrictions are known. If the monument or marker is over $100,000 or is gifted to the State, then it requires SBC approval.

Regarding joint ventures, does the State have any issue if the partners are in agreement to have one act as the prime firm and one as the sub firm?

The arrangements are between the two partners and the State doesn't get involved other than wanting to know how it is to be handled and who is to be the primary contact. However, the contract needs to be between the State and the joint venture (JV), and not with one firm and the other firm acting as a subcontractor. The insurance needs to be provided by the JV or by each JV partner recognizing that their individual insurance policies apply to the contract. The LLC form is acceptable. The State wants the parties on equal footing as they determine how the JV is to operate, and the arrangements are the responsibility of the individual parties.

What is the difference between "pre" planning and "full" planning for a project?

Pre-planning is for design work through the Design Development Phase (40%), whereas full-planning is for design work through the Construction Document Phase (70%).

Does the SBC need to approve the use of a Best Value Option 1 (BV1) procurement method?

Yes, an agency will be required to present to the SBC for approval to utilize any Best Value procurement method on a project before proceeding with the actual selection process. The actual award of the lowest bid through BV1, in itself, does not require approval from the SBC.

When is it appropriate to increase the designer fee?

If a project´s Maximum Allowable Construction Cost (MACC) is increased due to a project being over budget, no additional scope items are included, no phasing of bid packages where the designer has to package separately pieces of the project is required, and the design process stays linear, then the total, increased MACC is used in the fee formula to come up with the increase in fee.

If an MACC is increased due to increase in project scope, and where the designer has to pick up additional design work to cover that needed additional scope, or the designer releases multiple bid packages for a single project, then the increased portion of the MACC (that over the initial MACC) is calculated within the fee formula and added to the initial fee, to come up with the total fee.

Does the State fee schedule provide any additional fee for a project being LEED?

All State projects follow our Sustainable Design Guidelines (SDG). Our standard design fees apply to all projects including this service without additional compensation. For projects requiring LEED certification, we do provide additional fee compensation to the designer. This usually takes place through review of a proposal from the design firm, along with comparison to other LEED project fees and associated cost and taking into consideration the State´s guideline that such fees are usually on average 1% or less.