Bill would end $1M threshold for small architecture, engineering firms

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Lawmakers held a public hearing Tuesday on a bill that would allow one-person architecture and engineering firms to compete for state projects worth $1 million or more.

State administrative code now prevents officials from awarding projects worth more than $1 million to such small firms. Senate Bill 626, which went before the Senate’s Committee on Government Operations, Legal Review and Consumer Protection on Tuesday, would end that prohibition.

“One million dollars does not go as far today as it did in 2006,” said Sen. Duey Stroebel, a Republican from Saukville and an author of the bill. “As construction costs continue to increase over time, the number of projects posted by DOA’s Division of Facilities Development and Management that do not exceed $ 1 million have become increasingly rare.”

If the  rule for projects worth $1 million or more were eliminated, the next threshold to affect architecture and engineering firms would come at the $7.4 million mark. Projects estimated to be worth that much or more would have to be awarded using a request-for-proposals process, as is current practice.

Stroebel and Rep. Shae Sortwell, R-Two Rivers, brought the legislation forward at the request of a constituent, Daniel Hanson, principal at De Pere-based Hansen Design Group. Hanson wrote in testimony that eliminating the $1 million threshold is a proper response to the rising cost of construction projects and will ensure that small firms like his can compete for state projects.

“Certainly an individual operating as a single responsible member of a firm may be as qualified or even more qualified than a firm with multiple responsible members,” Hanson said.

The bill has drawn support from the Associated Builders and Contractors of Wisconsin. The current $1 million threshold was set in 2006, when state officials increased it from $250,000. Follow @natebeck9