Arizona Toughens School Procurement Regulations

The $10.4 billion budget passed earlier this year in Arizona will reduce corruption in school construction procurement.

According to the new regulations, beginning in July 2019, the old method under which school districts could score and pick a construction manager for a project is gone. The new process instead requires selecting builders solely based on the lowest cost bid.

The law also avoids external influence in the procurement process by narrowing the list of those who can be involved in the selection process. Contractors are also now banned from giving gifts to district officials.

One reason the laws were changed came from a procurement in 2016 by the Scottsdale Unified School District (SUSD). As part of a $229 million budget for school improvements that year, SUSD decided to demolish Hopi Elementary School and build a new on the same grounds.

A local resident, Dan Drake, and his wife had attended the school, as had his children. The buildings and structure had deep meaning for him. So he was curious about what had happened to justify tearing down the old school instead of just refurbishing it.

He found there were no justifications or feasibility studies filed to consider the options for the school.

His follow-up investigation led to a discovery of conflicts of interest with Hunt & Caraway, the final firm which had been selected for the replacement school’s design, and the School Superintendent. It was also determined that other potential bidders were turned away after a relatively quick initial review of the project by Hunt & Caraway.

Jason Boyer, one potential architect who lives in the Hopi Elementary District, had expressed interest in the work for the job. When he called to ask how to bid, he said in an interview that, “It took me two phone calls to get to a couple [of] people … [who told him] ‘look, don’t waste your time.” He went on to say that, “They basically said this is set up for a group of firms – a group of people that are all connected and tied to the superintendent. And, you know, you’d be wasting your time.”

The Attorney General of the State of Arizona is now investigating that matter. But the repercussions are in part why the new procurement laws were put in place.

Mark Minter, president of the Arizona Builders Alliance, expressed concern about the new regulations. “My understanding is that what happened in Scottsdale was illegal under existing law and is being investigated and pursued by the attorney general,” he said in an interview. “Perhaps we should have seen how that played out before we tried to change the laws for the entire procurement system.”

The formal list of requirements for school procurements is now long but clear. Besides the ones listed above, there are new rules requiring the those involved in the procurement cannot receive any form of special benefits, must keep records to show construction vendors are licensed, and that reprisals of any kind are banned against whistleblowers – those who raise concerns about procurement violations.

Those who knowingly try to evade the regulations will be liable for a class 4 felony. Those who receive gifts less than $300 are subject to a class 6 misdemeanor charge, and those who take larger gifts are subject to a class 6 felony charge.