2014 Legislative Report
David, Kennedy, ACEC-IL Legislative Consultant
Illinois General Assembly Adjourns Spring Session sine die
Local Government QBS law threatened
SB 3510, sponsored by Senator Pat McGuire on behalf of the IL Association of School Boards, would allow price bidding design professional services by units of local governments.
The bill would remove language that was added to the law seven years ago to make clear asking for fee information was not allowable prior to selection. The law had to be changed at that time because an Illinois Supreme Court ruling practically negated the local QBS law by allowing the consideration of fees prior to selection. ACEC-IL led a huge Veto session battle to change the law making it clear that price bidding was prohibited. All the local government associations opposed the legislation, including the Illinois Municipal League, community colleges and school board associations.
Particularly discouraging was that the Illinois Association of School Boards pursued this legislation based upon a resolution they adopted approximately 25 years ago opposing QBS. They adopted that resolution without research and debate and 25 years later suddenly decide to introduce legislation to amend the QBS law.
The Senate sponsor gave indications he would not call the bill. Finally, the last week to hear bills in the chamber of origin, the sponsor and the IL Association of School Boards decided to have the bill heard in Senate Local Government Committee. ACEC-IL rallied our allies to lobby against the bill and within two days had enough opposition that it was not going to be called for a hearing.
A goal for ACEC-IL is to work with the Illinois Association of School Boards to repeal the resolution opposing QBS so we don’t face this in the future. Also, ACEC-IL members should keep legislators apprised of why QBS is important. We also hope to convert the sponsor into a supporter of QBS.
Illinois Preference bill
Last year ACEC-IL had to oppose legislation proposed by a member to provide a preference in A/E selections for Illinois based design firms. The legislation would take care of those firms who were headquartered in Illinois with at least 50% of their employees being Illinois citizens.
Of course this discriminated against many Illinois employers who were branch offices of companies headquartered elsewhere. As an example, a firm with 200 employees located in Chicago but whose corporate headquarters was located elsewhere would be disadvantaged over a much smaller firm located only in Illinois. We opposed this bill, along with many other opponents, and it was held for future consideration and further amendments.
This year the idea was more reasonable in that it did not disadvantage other Illinois employers. But, it still gave a preference, which is against FHWA rules, thereby jeopardizing federal fund reimbursement for engineering. It would also cause reciprocal action from other states, causing many Illinois firms to lose work in nearby states. When you realize that we are a major design firm state that exports much of our service, this bill would not help us. We opposed the measure along with IDOT and other groups and the amendment was not called for a vote.
Energy Performance Contracts
We are always on the lookout for energy performance contract bills because they are not always in the interest of our members and the public. Too often, design firms do not have the ability to compete for this work as it is primarily done by a handful of major energy performance contractors.
These projects circumvent many IL laws that design firms and contractors comply with, such as the Procurement Code, Minority and Female Enterprise Act, QBS, Prevailing Wage for contractors and others. For some reasons, the energy performance contractors get to play by a different set of rules.
For the public institutions, there is no independent review of the “guaranteed” cost savings. Many school districts have regretted using this approach over the traditional design/bid/build approach where local businesses can compete.
This year HB 67 by Representative Lang and Senator Biss was carefully reviewed and discussed with the sponsors. The bill did not advance but it can be amended to make sure this does not add more energy performance contracts by the state should it advance in the future.
Design/Build for IDOT
IDOT has failed to pass a Design/Build law for the tenth year. In the meantime, we have been instrumental in the development and passage of 7 Design/Build laws for other agencies. A major position of ACEC-IL has always been that we want QBS and Best Value as the selection process. IDOT wants low bid, as do some contractor groups.
The first Design/Build law ACEC-IL was involved in goes back about 20 years when we developed with Metra a two phase Design/Build process that included QBS in the first phase and Best Value in the second phase. ACEC used this law as the basis to develop their own model Design/Build law.
In 2005 the Illinois Construction Industry Committee led a coalition effort to give Design/Build authority to the Capitol Development Board. This law was an improvement from the earlier Metra law and it still had the two-phase selection process so important to ACEC-IL, that being QBS and Best Value in the selection process.
Since that time, the design professional groups have used that law as a model. The Chicago Park District obtained Design/Build authority in 2007 using this law as the model. That was followed by a law for Public Building Commissions in 2008, again using the CDB Design/Build law. Next, all park districts were granted Design/Build authority. Last, the same Design/Build language was added in the Illiana and Public-Private-Partnership laws. So, the design professional organizations’ work on the early Design/Build laws have allowed ACEC-IL to take a prominent role in formulating how these Design/Build laws will be structured.
ACEC-IL and ISPE worked very hard over several months with key IDOT staff to try to develop a Design/Build law suitable for IDOT. ACEC-IL compromised considerably trying to be a team player focusing on only two central points: QBS and an exemption from Project Labor Agreements. Nevertheless, ACEC-IL and ISPE were never privileged to see the final language ultimately developed by IDOT.
IDOT’s bill was not called for consideration. The General Assembly ran out of time. The Department will be back, maybe during Veto Session in November.
Responsible Bidder and union issues
Last year, a union led initiative barely passed the House. Because it became so controversial, it was held up in the Senate. Senator Harmon, the sponsor of HB 924, promised to work on a compromise bill. That amendment was circulated late this session. While Senator Harmon worked with ACEC-IL and excluded Architects, Engineers and some Land Surveyors, the bill still included land surveyors working on construction sights and Material Testers and Drill Riggers. Therefore, we remained opposed.
Essentially, the bill would place Responsible Bidder requirements on local governments. Those requirements currently apply to state construction jobs. The effect of the Responsible Bidder law is to give unions exclusive bidding opportunity on government projects. This is accomplished by requiring bidders to have workers go through a U.S. Department of Labor approved apprenticeship training program, something primarily exclusive to unions.
As for us, the language would result in downstate engineering firms that do not have union material testers, from competing for local government work. That work would have to be done by Chicago area firms that have union testers. Or, the firms would have to sign a collective bargaining agreement with a union. Currently, only Operating Engineers Local 150 has a USDOL approved Material Testers program and they have the right to organize downstate, outside their normal territory.
The bill was held again due to the opposition. While a lot of groups oppose the bill, it is primarily because of the Legislative Black Caucus that the bill did not garner enough votes to pass this session. The bill is very important for the AFL-CIO and that puts a lot of pressure on Legislators to support the bill. It is expected that the bill will come back this Fall Veto session.
Illiana public-private-partnership project
ACEC-IL was heavily involved in the development of legislation authorizing IDOT to work with Indiana on developing the Illiana highway as a Public-Private-Partnership project. The procurement process is underway and some members are on teams competing for the opportunity to do this work.
IDOT had to come back to the Legislature seeking an amendment to the law. IDOT is proposing to guarantee payment from the Road Fund for the project. This has many Legislators concerned that the Illiana may become a drain on other projects elsewhere in the state. Purportedly, the Road Fund will pay part of the cost of Illiana over 11 years and at that time the road will make enough money to start paying back the Road Fund.
IDOT is not in the position to share detailed financial information because the procurement process is underway and that information could conceivably affect the proposals.
There are two bills that could make the necessary change. SB 1825 has an amendment filed that has not been considered by the House. HB 1022 has an amendment that has been approved by the Senate Transportation Committee but not voted on by the full Senate. The failure to pass the changes to the Illiana law may affect the project schedule.
Capitol program: HB 3794 & SB 3224
The efforts this year of the Transportation for Illinois Coalition to pass a new multi-year capitol program had a chance to pass. If the income tax increase of 4 years ago had been extended, TFIC had a viable chance of getting a larger “pay as you go” capitol program as part of the overall budget agreement. That is simply because the leadership needed to build Legislative support for the budget and highway projects go a long way in getting support from legislators.
Most significant, TFIC has shaped the future debate of Road Fund diversions. Prior to this, the sales tax collected on fuel was never considered a diversion, even though that money went to the General Revenue Fund. But because of TFIC’s work, many Legislators now recognize that as a diversion and would like to see that reversed. Putting that money into the Road Fund would be a huge boost for transportation.
The General Assembly did pass an additional $1.1 billion appropriation for IDOT for highway construction, including $100 million for local roads. The General Assembly also passed a $1.1 billion bond authorization bill to pay for those projects. The bad news is that much of this extra money is for “shovel ready projects”, which means a lot of asphalt overlays this summer and fall, prior to the election, with little engineering.
The good news is that this will advance many projects on the Six Year Highway Program, making room to add more projects to the multi-year program along with commensurate engineering.
Fall Veto session and Gubernatorial election
The Fall Veto session in November and the last few days of session of the current sitting General Assembly in early January will bring considerable issues and challenges. If Governor Quinn is re-elected, we can expect another attempt to extend the income tax increase that was passed four years ago. If candidate Bruce Rauner wins the election we can expect certain interest groups, particularly unions, to make a late attempt to pass legislation that helps them while they still have a Governor who will sign their legislation. HB 924 is an example of a union supported bill that we can expect to be considered this Fall Veto session.
*David Kennedy served as the ACEC-Illinois Executive Director for 27 years and now serves as lobbyist. Other contract lobbyists include Jim Morphew, Kevin Morphew and Bill Enlow of Sorling Nothrup in Springfield and ACEC-Illinois Executive Director, Dave Bender. ACEC-Illinois is also proud to partner with other industry and business related associations including ISPE, IPLSA, ASCE, AIA, HACIA, Illinois State Chamber of Commerce, NFIB, IRTBA, AGCI, IMSCA. These strategic alliances are crucial to the success of our legislative affairs agenda.