Section R7-2-1112. Contractor Licenses, Contract and Performance Requirements

A.      Notwithstanding any other rule:

1.        The contractor for design-build or job-order-contracting construction services is not required to be registered to perform design services pursuant to A.R.S. Title 32, Chapter 1 if the person actually performing the design services on behalf of the contractor is appropriately regis- tered.

2.        The contractor for construction-manager-at-risk, design- build or job-order-contracting construction services shall be licensed to perform construction pursuant to A.R.S. Title 32, Chapter 10.

B.       In a procurement for construction-manager-at-risk construc- tion services or design-build construction services, except for design-build contracts awarded pursuant to R7-2-1111, the school district shall enter into a written contract with the con- tractor for preconstruction services under which the school district shall pay the contractor a fee for preconstruction ser- vices in an amount agreed by the school district and the con- tractor, and the school district shall not request or obtain a fixed price or a guaranteed maximum price for the construc- tion from the contractor or enter into a construction contract with the contractor until after the school district has entered into the written contract for preconstruction services and a pre- construction services fee.

C.      Construction shall not commence under a construction ser- vices contract until the school district and contractor agree in writing on either a fixed price that the school district will pay or a guaranteed maximum price for the construction to be commenced. The construction to be commenced may be the entire project or may be one or more phased parts of the proj- ect.

D.      For negotiated construction-manager-at-risk and design-build contracts, preconstruction services, general conditions, sched- ules, construction contingency, and construction fees shall be part of the contract. For design-build contracts awarded pursu- ant to a request for proposals, the fees shall be included in the vendor’s proposal and shall become part of the awarded con- tract.

E.       For job-order-contracting construction services only:

1.        The maximum dollar amount of an individual job order for job-order-contracting construction services shall be one million dollars or a higher or lower amount pre- scribed by the governing board in a policy adopted in a

public meeting held pursuant to A.R.S. Title 38, Chapter 3, Article 3.1. Requirements shall not be artificially divided or fragmented in order to constitute a job order that satisfies the requirements of this subsection.

2.        If the contractor subcontracts or intends to subcontract part or all of the work under a job order and if the job- order-contracting construction services contract includes descriptions of standard individual tasks, standard unit prices for standard individual tasks and pricing of job orders based on the number of units of standard individ- ual tasks in the job order:

a.         The contractor has a duty to deliver promptly to each subcontractor invited to bid a coefficient to the con- tractor to do all or part of the work under one or more job orders a copy of the descriptions of all standard individual tasks on which the subcontractor is invited to bid and a copy of the standard unit prices for the individual tasks on which the subcon- tractor is invited to bid.

b.        If not previously delivered to the subcontractor, the contractor has a duty to promptly deliver to each subcontractor invited to or that has agreed to do any of the work included in any job order a copy of the description of each standard individual task that is included in the job order and that the subcontractor is invited to perform, the number of units of each standard individual task that is included in the job order and that the subcontractor is invited to per- form, and the standard unit price for each standard individual task that is included in the job order and that the subcontractor is invited to perform.

F.       For all construction services contracts, the contractor perform- ing the construction services is permitted to self-perform part of the construction work, if and to the extent agreed in writing by the school district and the contractor. The school district may use methods other than competitive bidding to assure itself that the price the school district pays to the contractor for self-performed work is fair and reasonable. Permitted methods to evaluate fairness and reasonableness of the price of self-per- formed work include evaluation of the contractor's proposed scope of work and price for self-performed work by an estima- tor who is hired and paid by the school district, who is inde- pendent of the contractor and who may be an employee of the school district. Although the school district may elect to so require, nothing in Articles 10 and 11 shall be construed or interpreted to require the school district to require a contractor desiring to self-perform part of the construction work to com- petitively bid that part of the construction work against other contractors in a bid competition.

G.      For all construction services contracts, the following require- ments apply to the construction work to be performed by sub- contractors and do not apply to construction work that the school district and the contractor agree in writing will be self- performed by the contractor:

1.        The person selected to perform the construction services shall select subcontractors based on qualifications alone or on a combination of qualifications and price and shall not select subcontractors based on price alone. A qualifi- cations and price selection may be a single-step selection based on a combination of qualifications and price or a two-step selection. In a two-step selection, the first step shall be based on qualifications alone and the second step may be based on a combination of qualifications and price or on price alone.

2.        The school district shall include in each contract:

a.         If the school district included its subcontractor selec- tion plan in the request for qualifications, the school district's subcontractor selection plan and the proce- dures to implement the school district's subcontrac- tor selection plan proposed by the awarded contractor in submitting its qualifications with those modifications to the procedures as the school district and the contractor agree.

b.        If the school district did not include its subcontractor selection plan in the request for qualifications, the subcontractor selection plan proposed by the awarded contractor in submitting its qualifications with those modifications as the school district and the contractor agree.

3.        In making the selection of subcontractors, the contractor shall use the subcontractor selection plan and any proce- dures included in its contract.

H.      The school district shall include in each contract for construc- tion services the full street or physical address of each separate location at which the construction will be performed and a requirement that the contractor and each subcontractor at any level include in each of its subcontracts the same address information. The contractor and each subcontractor at any level shall include in each subcontract the full street or physi- cal address of each separate location at which construction work will be performed.

Historical Note

Adopted effective December 17, 1987 (Supp. 87-4). Sec- tion repealed; new Section made by final exempt rulemaking at 21 A.A.R. 1525, effective July 1, 2015

(Supp. 15-3).