State School Construction Contingencies Funding May Change for the Better

The Interagency Commission on School Construction updates regulations around state school construction funding processes in an effort to ease administrative hurdles and expedite project completion.

The Interagency Commission on School Construction (IAC) approved the publication of COMAR revisions including:

  • Clarifications to best value procurement requirements
  • Increases to time allowances for local school systems to ask the IAC to reconsider a decision
  • Clarifications to emergency shelter requirements

These proposed policy changes reflect input from county governments on the 21st Century School Facilities Commission.

The IAC also discussed concerns submitted by Washington County Public Schools regarding adapting to the statutory removal of change order review and contingencies.

The Commission reflected on how, despite the removal of state contingency amounts for change orders, in the big picture, the State will have contingencies for unexpected project costs and new processes allowing them to give special consideration to unique circumstances, including change order needs. They also discussed the possibility of setting aside 2.5% from the entire Capital Infrastructure Program to allow them this flexibility.

The proposed change to change order regulations is copied below and appears on page 100 of the agenda. Italicized text is the proposed new regulation, and deleted regulatory text is bracketed and struck through.

Change Orders.
(1) The LEA shall maintain contingency funds for change orders. The LEA may issue change orders without
prior approval of the IAC or its designees. [The IAC may establish a contingency fund for change orders if funding is
available within the maximum State construction allocation.]
[(2) The LEA may issue change orders without prior approval of the IAC or its designee.
(3) State Review of Change Orders.
(a) The LEA shall submit all change orders to the IAC.
(b) The IAC or its designee shall review the LEA’s change orders as follows:
(i) Change orders that increase the cost of the construction contract are evaluated based on the
reasonableness of the change order, including cost, and the availability of State funds; and
(ii) Change orders that decrease the cost of the construction contract are evaluated based on the impact on
the quality and functionality of the construction, the reasonableness of the credit amount, and the funds that may be
credited to the State.
(4) Change orders that exceed the maximum State construction allocation or that are not approved by the IAC for
funding are a local obligation.]

In a response letter to Washington County Public Schools, Bob Gorrell shares an example of how even under new laws, the amount of funding available to jurisdictions on a given school construction projects may actually increase.

Examples of old and new school construction contingencies from the Public School Construction Program.

For more information, see the discussion of the Interagency Commission on School Construction at 55 minutes. Link to agenda.

The published regulations will go first to the General Assembly’s AELR Committee, and then, when approved by them for publication, they are published in the Maryland Register, which begins the public input process. After public input, draft regulations are reviewed and updated, before they are submitted for final approval.