Timely Submittal of Schedule of Values and Required Supporting Documentation
The Massachusetts School Building Authority (MSBA) enters a Project Funding Agreement (PFA) with districts, which is then amended once bids are received in a Design Bid Build project, or the Guaranteed Maximum Price (GMP) is negotiated in a Construction Manager-at-Risk (CMR) project. By the terms of the PFA, in the event that the lowest, responsible bid or GMP, accepted by the district for the construction of a project, is lower than the amount established by the PFA, the MSBA grant will be reduced accordingly in the amended PFA. To the extent that the lowest, responsible bid or GMP accepted by the district exceeds the amount established in the PFA, the MSBA will not adjust its grant, and the increased costs will be the sole responsibility of the district.
The amendment to the PFA to reflect the actual construction costs is critical to provide the MSBA with the right project budget as the basis for review of reimbursement requests. The amendment can only be drafted with the timely receipt of the Schedule of Values (SOV) from the accepted bid or negotiated GMP. The amendment ensures that the MSBA ProPay system, used for processing reimbursement requests, is consistent with the payment requisition approved by the district and associated with the executed contract between the district and the contractor or construction manager.
Receipt of the SOV is important from the perspective of both the district and the MSBA. Proper alignment of the MSBA ProPay system saves the district from added paperwork such as additional Budget Revision Requests, and mitigates the district's risk of delayed reimbursement associated with audit adjustments. Proper alignment allows the MSBA to ensure that reimbursement requests are processed in accordance with the project’s physical construction progress. Even before submitting the SOV, the Owner’s Project Manager should work with the district to properly allocate the site and scope exclusions in forecasting reimbursement and cash flow.
Accordingly, effective November 1, 2020, the MSBA will require that the Schedule of Values and required supporting information needed to process the PFA Bid Amendment for all Core Projects be received by the time the project is submitting 30% of its costs within the construction budget in ProPay. If a district has not submitted the Schedule of Values and required supporting information associated with its accepted bid or executed GMP for a project achieving 30% submitted costs within the construction budget in ProPay, the MSBA will temporarily suspend reimbursement until the information is received.
