San Diego Unified School District: Prequalification, Labor Agreement and Bond Program

The district's Facilities Planning and Construction prequalification page states that prime contractors on lease-leaseback and design-bid-build projects over $1 million must prequalify, and that MEP subcontractors are required for all design-bid-build projects estimated over $1 million. The page sets submission deadlines of five or 10 business days before the bid due date, depending on the project. Approval expires one year from the date of approval. Project references must be completed prime contractor work on projects of $1 million or more.

The district's construction contracts page repeats the rule from the bidder's side: a firm must submit a prequalification package to bid on projects over $1 million. State law points the same way, since Public Contract Code section 20111.6 as enacted in 2012 required larger districts to prequalify bidders and MEP subcontractors on state-funded work of $1 million or more. A firm whose approval is close to expiring typically renews before a target bid's deadline rather than after.

The prequalification page ties the financial statement to project size. Projects over $10 million call for submission of audited financials, and projects under $10 million call for reviewed financial statements. A contractor that has carried reviewed statements for smaller public work has to plan ahead for the larger jobs, since an audit takes its own time and an outside accountant's schedule.

The same statements typically support the contractor's surety program. A surety sets bond capacity from the contractor's financial condition, work on hand and experience, so moving into the district's over-$10 million tier can be a good point to look at bonding capacity alongside prequalification. Bond approval remains subject to underwriting and the surety's terms.

The district's construction contracts page states that it may use only Department of Industrial Relations registered contractors and subcontractors on public works. State law adds that no contractor or subcontractor may be listed on a public works bid unless registered, and that certified payroll records go electronically to the Labor Commissioner.

The same page states that the district requires a mandatory 3 percent DVBE participation on all publicly bid construction contracts. It also describes mandatory site walks for prime bidders, bidding through PlanetBids and board award typically three to four weeks after bid opening. The Contracts Management team handles oversight of insurance documents, but the page does not list insurance limits or wording.

The district's board approved a Project Stabilization Agreement on July 28, 2009, effective October 27, 2009. The district's page describes the parties as the district, the San Diego Building and Construction Trades Council and the Southwest Regional Council of Carpenters. The agreement reaches Propositions S and Z work equal to or exceeding $1 million in value, measured by the estimate before the project is submitted to DSA.

Contractors on that work must employ apprentices trained in the joint labor-management apprenticeship programs, and the district notes that the apprenticeship requirement was upheld on appeal in AGC v. SDUSD, decided May 18, 2011. The page does not mention Measures YY or U, so whether the agreement applies to work funded by those later measures should be confirmed in the solicitation or with the district before a firm prices its labor.

We did not verify the district's bid security amount, payment and performance bond terms, insurance limits, additional insured wording, retention or warranty period. We also found no owner-controlled insurance program described on the district pages we read. The district posts current solicitations in its planroom, where specifications and advertisement documents require a login, so those terms come from each solicitation's documents and can differ from one project to the next.

Before pricing, a bidder typically pulls the instructions to bidders, general conditions and any supplementary conditions for the project and checks them against its surety capacity and policy forms. A surety bond is a credit product, not an insurance policy. How a liability or property policy responds to a loss turns on its wording, subject to underwriting and the terms of the bonds and policies issued.