BGS outlines construction phases and warns rising costs, thin bidder pools are changing how projects are planned

Buildings and General Services officials told the Senate Committee on Institutions on Jan. 21 that the state’s established six-phase project process — from programming through construction and commissioning — remains the foundation for capital work, but that shifting market conditions are increasing costs and reducing the number of responsive bidders for some projects.

The briefing was led by Wanda Manoli, commissioner of Buildings and General Services, and Joe Aja, director of design and construction. Aja described the six phases in detail and said typical programming takes “six to 14 months” depending on project size. He emphasized that programming defines objectives, square footage and permit needs before schematic design begins.

The committee heard that cost estimating is volatile. "Whenever I present or Joe presents to you a number, we're going to emphasize this is today's dollar," Manoli said, explaining that a project cost estimate can rise substantially if construction does not start for several years. Aja and Manoli told senators that contingency allowances and aligning estimates to realistic construction timelines are essential to avoid later budget shortfalls.

Committee members and BGS staff described a thin market for some work. Aja said some bids draw only one contractor; on other jobs they have rebid two or three times and still gotten few responses. "There's more than enough work out there now because there's not enough people in the trades doing this work," Aja said, citing labor shortages and the time and cost for contractors to prepare detailed bids as deterrents.

To address those pressures, Manoli said BGS has begun talking with the Associated General Contractors (AGC) and is considering different ways to package and bid work. She and Aja described using multiple delivery methods — including construction management with a guaranteed maximum price (GMP) — when a project’s unknowns make a straight lump-sum bid likely to produce change orders. Manoli said the construction manager approach can return unspent funds to the state and allow earlier contractor input on cost-saving design changes.

The presentation also covered typical in-progress controls: detailed construction documents and specifications, permitting, bid evaluation for responsiveness (not only low price), site access logistics for specialized facilities (for example, correctional facilities with background-check requirements), daily project management and post-occupancy commissioning and warranty periods.

Senators pressed the department on how it handles projects that exceed initial budgets. Aja and Manoli said BGS works with client agencies to refine scope and, when necessary, return to the legislature for additional funding. They also noted BGS builds contingencies into presented estimates when construction won’t start immediately.

Manoli urged the committee to allow flexibility in the capital bill for contingencies, so projects can proceed without repeated appropriation requests when market conditions shift. The department said it will continue to report planned versus actual expenditures and to pursue procurement adjustments intended to increase competition and reduce cost uncertainty.

Ending: BGS officials said they will continue meeting with industry partners and the legislature to refine procurement approaches and align estimates with realistic build schedules; the committee is expected to follow up as BGS develops specific packaging and bidding recommendations.