By Roland Murphy for Arizona Builder’s Exchange
A few months ago, AZBEX received an anonymous tip about the Alhambra Elementary School District undertaking a series of projects for new gymnasiums and other facilities projects. In a rare move, the district was looking at a mix of low bid and Alternative Project Delivery Methods.
As many of our readers know, we stirred up a figurative hornet’s nest almost exactly a year ago when we published our K12 Market Study. Very long story short, we did the first and, to date, only in-depth study of the market sector in the state and found some pretty significant irregularities. That invited both praise and scorn from players in the industry, and it made a significant impact on other outlets’ coverage of and reporting on the issue.
When Rebekah Morris told me about the Alhambra tip, she was excited. This was an opportunity to use publicly available information to make an apples-to-apples comparison of bidding, delivery and administrative methods in a controlled, representative environment. Most comparisons of APDM contracts to low bid are dismissed because the variables are so different – varied project types and market conditions make a side by side comparison easy to discount.
Look, we at AZBEX are information-driven geeks. When considering original stories beyond our standard planning and development coverage, we tend to dive pretty deeply down the rabbit hole. I may run the magazine and serve as a player-coach when it comes to in-depth pieces, but when it comes to issues like market analysis, Rebekah proudly carries the title of Geek-in-Chief. My forte is trend/pattern recognition and legislative issues, but when it comes to line-by-line spreadsheet, plan review, submittal and proposal analysis, etc., Rebekah runs circles around me and, as a former construction engineer, is entirely in her element.
Like most people and businesses involved in the public side of the Arizona A/E/C market, we were stunned when the Legislature passed HB 2663, Section 4 of which, “Instructs SBE to adopt rules for school district procurement of materials, services and construction that ensure maximum competition, require contracts to be awarded based on the lowest qualified bidder…” As reported by AZBEX-collaborative partner outlets Arizona Center for Investigative Reporting and KJZZ, the construction industry was not consulted on the changes, and many fear a return to an exclusively low bid procurement system “that prioritizes cost above outcomes.” It was widely speculated the Legislature’s actions were an overreaction to the highly-publicized scandals that plagued the Scottsdale Unified School District starting late last year.
Both as taxpayers and as advocates for the A/E/C industry AZBEX strongly supports APDM. When properly regulated, administered and overseen to ensure a level playing field that maximizes efficiencies, APDMs like Construction Manager @ Risk can significantly outperform traditional low bid procurements in terms of quality and cost controls. They benefit the industry as a whole, as well as the agencies, students, parents and taxpayers who foot the bill in either case.
Unfortunately, our analysis last year — which covered more than four years of advertised opportunities in K12 — showed that kind of oversight to be lacking. Still, we found the “solution” mandated in HB 2663 to be a staggering, knee-jerk overreach, and we made no bones about saying so.
Pay attention. This becomes important later.
The deeper we dug, the more issues we encountered, and the more risky the story became. Looking back through my issue planning sheets, we initially intended to run the piece on October 12. It’s now December 7. Why the delay? Lots of reasons. First and foremost, we wanted to make sure our details were right and that everyone involved had ample opportunity to comment and clarify.
Despite our best efforts and outreach, doors started to close and stakes started to rise the more questions we asked. Without going into gory detail, suffice it to say efforts were made to change the narrative and kill the story.
Friendly sources even let us know there were rumors going around we were looking for a legislator to help us out in our efforts to kill APDM when the final rules for HB 2663 are put in place, which is about the most damaging and utterly incorrect assertion I’ve encountered in a 25-year career.
That’s not saying this kind of opposition doesn’t take a toll. It does. It might not be obvious, given the scope and volume of what we do over here, but we are a tiny organization. Intimations like those are scary. We have 10 employees who depend on AZBEX for their livelihoods and more than 4,000 readers across nearly 500 firms who depend on us as the state’s only dedicated local source for industry information. Did we really want to put that all on the line?
No. We didn’t want to.
As a news outlet, however, we have an obligation to report both the good and the bad. Rebekah has said more than once that I push her into doing the scary things. Maybe I do, but it’s not out of a sense of whimsy or fun. In a perfect world, we would be able to just tell you who’s building what, who won what deal and how shiny and perfect the Arizona A/E/C world is. The world, however, isn’t perfect.
Twenty-five years ago, I started out as a reporter. Even though there was a significant career detour over to the corporate and PR side of the street, I always approached every job from an editorial mindset: Does this tell the readers something they need to know?
Over my career I’ve been threatened with loss of access, litigation, blacklisting and worse along the way. Being not just a reporter but a leader in our organization, I have to evaluate risks and weigh pros and cons. As the owner, Rebekah’s burdens under these considerations are far greater than mine. Neither of us take our responsibilities to the organization lightly, and we don’t wade into controversy gladly. Neither of us would risk our livelihoods lightly in a brand building exercise, even though some may allege that’s exactly what we’re doing.
Still, at the end of the day, we have to be able to look ourselves in the mirror. We take the risk not because it’s exciting or fun, but because there’s no one else to say what needs to be said. The construction industry has always had a reputation for shadiness, and to let questionable practices go unreported paints the entire industry with the same broad brush. There are too many players with too much integrity for us to stand silent and let that happen.
We anticipate there will be fallout from our reporting; the questions raised by the article have not appeased everyone. Still, AZBEX integrity is intact. Our reporting is factual and accurately reflects the information provided to us by the district. Our comparisons are valid, and we stand by the story.