COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:3896S.03C Bill No.:SCS for SB 758 Subject:Office of Administration; Contracts and Contractors; Political Subdivisions;
Public Officers; State Departments
Type:Original Date:March 8, 2022Bill Summary:This proposal modifies various provisions relating to bidding procedures for
certain public projects for facilities.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2023FY 2024FY 2025General Revenue
Fund*
$100,000 - $300,000$100,000 - $300,000$100,000 - $300,000Total Estimated Net
Effect on General
Revenue
$100,000 - $300,000$100,000 - $300,000$100,000 - $300,000
*Represents a range of savings from being allowed to advertise on a website instead of a
newspaper.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 3896S.03C
Bill No. SCS for SB 758
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on FTE 000
☐ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☒ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Local Government$0$0$0 L.R. No. 3896S.03C
Bill No. SCS for SB 758
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FISCAL ANALYSIS
ASSUMPTION
Section 8.250 – Public Contracts
Officials from the Office of Administration - Facilities Management, Design and
Construction (OA-FMDC) state this section of the proposal would permit OA-FMDC to place
invitations to bid for construction projects on its website or MissouriBUYS for a period of ten
days or more rather than advertising in the newspaper. On average, for the period from FY19-
FY21, FMDC spent $101,990 per year on newspaper advertising. However, this number is lower
than in the past given that many construction projects have been on hold during this timeframe.
FMDC’s advertising costs averaged around $300,000 per year in the past when more capital
improvement projects were being completed. FMDC expects a saving of $100,000 to $300,000
per year from this change.
Oversight does not have any information to the contrary. Therefore, Oversight will reflect the
estimated savings provided by OA-FMDC.
Section 8.690 (8.677 & 8.679) – public project delivery methods
Oversight assumes the SCS for SB 758 removes sections 8.677 and 8.679 and therefore will not
reflect any fiscal impact as result of these two previous sections.
In response to a previous version of the bill, OA-FMDC stated this would have given OA-
FMDC the ability to utilize the construction manager-at-risk and design-build procurement
methods for design and construction of capital improvement projects. This bill would have given
the state the ability to utilize additional modern, industry standard procurement tools for design
and construction that are currently used in the private sector as well as by the political
subdivisions of the state. This bill would have given the state additional flexibility for the design
and construction of state projects, which FMDC anticipated would increase efficiency and
reduce risk, administrative costs, and construction timeframes for some projects. This could have
been particularly important given the number of American Rescue Plan Act (ARPA) projects
that the state will likely need to complete in the coming years.
This bill would have required OA-FMDC to establish new procurement methods and procedures,
and create new contract documents for construction management-at-risk and design-build
procurement. FMDC estimates that this would have taken approximately 1,500 hours of contract
staff time ($37 per hour totaling $55,500) and an additional 250 hours of Legal Counsel time
($42 per hour totaling $10,500). FMDC anticipates that these impacts could have been absorbed
with existing staff and resources. L.R. No. 3896S.03C
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Officials from the OA-FMDC assume the cost of this section of the proposal can be absorbed
with existing staff and resources. Oversight does not have any information to the contrary.
Therefore, Oversight will reflect a zero impact in the fiscal note for these sections.
OA-FMDC also states that while there would be initial effort by FMDC’s Contracts Unit and the
OA legal team in the first year or two of implementation, FMDC anticipates that these costs
would be offset by time savings within its Project Management Unit and Construction
Administration Unit. This would also help FMDC manage capacity issues if a larger number of
projects need to be completed in a shorter time frame than what FMDC typically experiences.
For example, FMDC currently has the capacity to manage around $700 million in projects over a
four-year period or $350 million in a two-year period with existing Project Management and
Construction Administration staff. If FMDC receives funding for several large projects that bring
its project total to $850 million, FMDC would need an estimated $3 million for additional staff
over the next 4 years. However, because the increased workload is short-term in nature, it would
be beneficial for FMDC to have the ability to pay a contractor for these services rather than
hiring additional staff or delaying project completion. The actual fiscal impact of this bill is
unknown as it will depend upon a number of factors including the number and type of projects
FMDC receives funding for, construction prices, and whether these new procurement methods
are utilized consistently.
In response to a previous version of the bill, officials from the Department of Public Safety -
Missouri National Guard (MONG) stated that the biggest fiscal impact to MONG would be if
Office of Administration - Facilities Management, Design and Construction (FMDC) could not
support a Design-Bid-Build project on the required time-line. MONG will have the option to
utilize Design-Build which will potentially allow MONG to obligate funds that might otherwise
expire. Other potential impacts could include getting projects completed quicker, allowing
termination of leases, or reducing cost of construction.
Reference: Sanvido, V., & Konchar, M. (1999), Selecting Project Delivery Systems:
Comparing Design-Build, Design-Bid-Build, and Construction Management at Risk.
Design-Build versus Design-Bid-Build resulted in 6.1% lower unit cost at a 33.5% faster
delivery speed; and
Bid-Build and 13.3% faster delivery speed.
There is no inherent cost in having these additional options (as long as they are just options).
These options could enhance MONG’s ability to execute projects within the life-span of Federal
funds.
In response to a previous version of the bill, officials from the Department of Corrections
(DOC) stated this proposal modifies various provisions relating to public contracts. It amends L.R. No. 3896S.03C
Bill No. SCS for SB 758
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the language in chapter 8 (dealing with public construction contracts) and chapter 34 (public
procurement), which apply to the department's procurement practices. The bill removes the
requirement to post bid opportunities in the newspaper and allows the publication of notice to
appear on the public entity's website. The bill also amends the requirements for bidding
manager-as-agent and design-build construction contracts. Finally, the bill changes the language
of 34.100 to allow the commissioner of OA to delegate single feasible source authority to an
agency for contracts totaling $10,000 and below, instead of $5,000 and below.
There is a potential unknown cost savings, as these changes could speed up the process for
construction and construction projects, as well as potentially increase the efficiency of the
procurement and construction processes.
In response to a previous version, officials from the Missouri Department of Conservation
(MDC) stated the proposed legislation would have a positive fiscal impact to the department of
less than $250,000 annually.
Oversight assumes there would be some positive benefit to the state as a result of modifying
various provisions relating to public contracts and public procurement methods in this proposal;
however, Oversight notes the language in the proposal is permissive in nature and therefore will
not reflect these benefits in the fiscal note.
Bill as a whole
Officials from the Department of Economic DevelopmentDepartment of Elementary
and Secondary Education, the Department of Higher Education and Workforce
Development, the Department of Health and Senior Services the Department of Natural
Resources, the Department of Corrections, the Department of Revenue, the Department of
Public Safety (Capitol Police, Alcohol & Tobacco Control Fire Safety, Gaming
Commission, Missouri Highway Patrol, Missouri National Guard State Emergency
Management Agency and Veterans Commission), the Office of the GovernorMissouri
Lottery Commission, the Missouri Consolidated Health Care Plan, the Department of
Agriculturethe Missouri Department of Conservation, the Missouri Ethics Commission,
the Office of Prosecution Services, the Office of Administration (Administrative Hearing
Commission and Budget and Planning), the Missouri Senate, the Office of the State Public
Defender and the State Tax Commission each assume the proposal will have no fiscal impact
on their respective organizations for this proposal.
Oversight notes that the above mentioned agencies have stated the proposal would not have a
direct fiscal impact on their organization. Oversight does not have any information to the
contrary. Therefore, Oversight will reflect a zero impact on the fiscal note for these agencies.
Officials from the Department of Commerce and Insurance, the Department of Mental
Health, the Department of Public Safety – Office of the Director and the Department of L.R. No. 3896S.03C
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Social Services defer to the Office of Administration for the potential fiscal impact of this
proposal.
In response to a previous version, officials from the Office of the State Auditor, the Missouri
Department of Transportation, the Missouri House of RepresentativesDepartment
of Labor and Industrial Relations each assume the proposal will have no fiscal impact on their
respective organizations. Oversight does not have any information to the contrary. Therefore,
Oversight will reflect a zero impact in the fiscal note for these agencies.
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
Officials from the Office of the Secretary of State (SOS) note many bills considered by the
General Assembly include provisions allowing or requiring agencies to submit rules and
regulations to implement the act. The SOS is provided with core funding to handle a certain
amount of normal activity resulting from each year's legislative session. The fiscal impact for
this fiscal note to the SOS for Administrative Rules is less than $5,000. The SOS recognizes that
this is a small amount and does not expect that additional funding would be required to meet
these costs. However, the SOS also recognizes that many such bills may be passed by the
General Assembly in a given year and that collectively the costs may be in excess of what the
office can sustain with its core budget. Therefore, the SOS reserves the right to request funding
for the cost of supporting administrative rules requirements should the need arise based on a
review of the finally approved bills signed by the governor.
Officials from the City of Springfield assume the proposal will have no fiscal impact on their
organization. Oversight does not have any information to the contrary. Therefore, Oversight will
reflect a zero impact in the fiscal note.
Oversight only reflects the responses received from state agencies and political subdivisions;
however, other cities and counties were requested to respond to this proposed legislation but did
not. A general listing of political subdivisions included in Oversight’s database is available upon
request.
FISCAL IMPACT – State GovernmentFY 2023
(10 Mo.)
FY 2024FY 2025GENERAL REVENUE FUNDSavings – OA §8.250 p.3
Newspaper Advertising
$100,000-
$300,000
$100,000-
$300,000
$100,000-
$300,000
ESTIMATED NET EFFECT TO
THE GENERAL REVENUE FUND
$100,000-
$300,000
$100,000-
$300,000
$100,000-
$300,000 L.R. No. 3896S.03C
Bill No. SCS for SB 758
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FISCAL IMPACT – Local GovernmentFY 2023
(10 Mo.)
FY 2024FY 2025$0$0$0
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
This act modifies various provisions relating to public contracts.
BIDDING ON CERTAIN PROJECTS BY THE STATE (Section 8.250)
All contracts for projects entered into by an officer or agency of the state in excess of $100,000
shall be let to the lowest, responsive, responsible bidder or bidders based on preestablished
criteria after publication of an invitation to bid for a period of ten days or more on the website of
the officer or agency or through an electronic procurement system.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Commerce and Insurance
Department of Economic Development
Department of Elementary and Secondary Education
Department of Higher Education and Workforce Development
Department of Health and Senior Services
Department of Mental Health
Department of Natural Resources
Department of Corrections
Department of Labor and Industrial Relations
Department of Revenue
Department of Public Safety
Office of the Director
Division of Alcohol and Tobacco Control
Capitol Police
Fire Safety
Missouri Gaming Commission
Missouri Highway Patrol L.R. No. 3896S.03C
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Missouri National Guard
State Emergency Management Agency
Missouri Veterans Commission
Department of Social Services
Office of the Governor
Joint Committee on Administrative Rules
Missouri Lottery Commission
Legislative Research
Oversight Division
Missouri Department of Agriculture
Missouri Department of Conservation
Missouri Ethics Commission
Missouri House of Representatives
Missouri Department of Transportation
Missouri Office of Prosecution Services
Office of Administration
Administrative Hearing Commission
Budget and Planning
Facilities Management, Design and Construction
Office of the State Courts Administrator
Office of the State Auditor
Missouri Senate
Office of the Secretary of State
Office of the State Public Defender
State Tax Commission
Julie MorffRoss StropeDirectorAssistant DirectorMarch 8, 2022March 8, 2022