Procurement? Invest in legal advice

In the field of educational housing, major changes are coming in 2015. School boards will then become responsible themselves for new construction, exterior maintenance and modifications to their school buildings. As a result, schools will have to deal with tendering, awarding and contracting various activities. And that is unfamiliar territory for many boards.

One of the biggest revisions is the transfer of the responsibility of outside maintenance and carrying out adjustments to school buildings from municipalities to school boards. This applies to both primary and secondary education. For school boards, this change has a lot to deal with. A school is usually considered a contracting authority. This means that if the school procures a service, it is obliged to follow the principles (rules) of procurement law. So just purchasing as such is not possible. Now that schools themselves become responsible for the procurement process of, for example, large-scale renovations or new construction, they need to be aware of those procurement rules. And for most school boards, especially for primary education, this is unfamiliar territory.

Pot for legal advice

Because how do you shape such a tender? How do you prevent a tender from failing? And how do you end up with the most desirable candidate? The method of contracting is also important. Do you cut the contract into small parts and select a separate building contractor, an elevator installer and a party to lay the floor in the gym? Or do you choose to make one very large job, for both the architectural part and the installation, which you contract out to a contractor who is responsible for contracting subcontractors himself? Whatever decision is made, they all present legal opportunities and risks. So my advice is, "Reserve in the budget a money jar for legal advice. Remember that these are often long-term contracts involving large sums of money. By seeking legal advice at an early stage, preferably before the tendering procedure begins, potential problems and associated costs can be avoided at a later stage. That saves money that benefits education."

Procurement rules

The transfer also has financial implications. In education, school boards receive a single budget for personnel and materials. We call this lump sum financing. School boards receive an allowance based on the number of pupils enrolled. Schools can decide for themselves what they spend this amount on: education, personnel or maintenance. As a school board, you obviously want to spend as much money as possible on good education. Of course it is nice that schools can dispose of the budget themselves and decide how to spend it. A downside is that this ties schools to procurement rules (principle of transparency, objectivity and non-discrimination). Even though these are actually formalities, schools should be aware of them. Usually, school boards hire a technical consultant who knows too little about the pitfalls of a tender and focuses mainly on the technical specifications. The one that determines what the building should look like, including the administrative, legal and technical provisions, materials and implementation conditions. A shame, because the wrong tender can lead to additional costs, such as expenses for summary proceedings. We can advise school boards in the tendering process, contracting and execution of renovation and construction plans.

Side contracting

Side contracting also an important trend in education. Increasingly, a construction project is divided into several parts and a separate contracting agreement is concluded for each of those parts. This may provide a financial advantage, but experience shows that it mainly involves financial and legal risks. This is because the final responsibility of coordinating the work of the various side contractors lies with the client. Side contractors have no contractual relationship among themselves, even though the various works are usually closely related and build on each other. It is therefore important that the work of the various ancillary contractors is construction-related and coordinated. Placing the coordination obligation on the prime contractor is by no means always adequate. At worst, it can lead to liability issues and legal proceedings. We can also advise school boards in these types of issues.