Piggyback Terminology: 35 Terms that Explain Piggyback Contracting
When it comes to piggyback contracting, some of the most commonly used terms are the most commonly misused. Need a cheat code? Here are 35 terms that will help decipher the logic and legalese crucial to understanding piggyback contracts—and how to make them work for you.
If you think piggyback contracts have their own language, you’re not alone. It’s not just confusing; the lack of clarity can be misleading, as well.
Much of the confusion surrounding piggyback contracts and which modular, portable and relocatable buildings are eligible stems from incorrect or imprecise usage of basic terminology.
Many terms are used interchangeably when they’re not at all the same. To clarify, we’ll define 35terms that will help you understand all facets of the piggyback process and use piggyback contracts to your best advantage. Many of these terms are defined by specific sections of California Code, with legal interpretations that explain their application to commercial construction.
We’ll start with the most important term. What exactly is piggyback contracting?
Piggyback Contracting is a procurement method that allows public agencies, schools and community college districts to acquire personal property outside the competitive bid process by utilizing, or “piggybacking” onto, a pre-existing contract from another public agency as allowed by Public Contract Code. Piggybacking saves time and resources, giving school districts and other public agencies the option to purchase tangible personal property, including modular buildings, under the same terms as the initial contract. The original contract must be current and may have been awarded to any public agency located anywhere in California.
While buildings can look the same, or very similar, there’s a nomenclature for the classification of buildings according to type. Some building types are piggybackable while others are not. Here’s a quick breakdown.
Factory-Built School Building
A category defined by the California Code of Regulations Regulation 1521, Article 2, Subsection 4 as a relocatable classroom building “designed in compliance with state laws for school construction and approved by the structural safety section in the Division of the State Architect, which is either wholly manufactured or substantially manufactured at an offsite location for the purpose of being assembled, erected, or installed on a site owned or leased by a school district or a community college district.”
A type of building where materials are assembled into fully-built modules in the factory, then transported intact to the building site, where each module is placed on a concrete stem wall or wood foundation and connected to form a complete building. A modular building is piggybackable by code.
Modular Component Building
A type of building where prefabricated structural components (walls, roof, floor, etc.) are assembled separately in the factory, shipped flat to the building site and assembled on a permanent foundation (typically concrete slab-on-grade) by onsite contractors. Panelized and kit buildings are modular component buildings and cannot be piggybacked.
Portable/Relocatable Classroom Building
Defined by California Education Code Section 17070.15 as a classroom building of one or more stories that is designed and constructed to be relocatable and transportable over public streets, and with respect to a single-story portable classroom, is designed and constructed for relocation without the separation of the roof or floor from the building and when measured at the most exterior walls, has a floor area not in excess of 2,000 square feet. Portable/relocatable buildings are piggybackable by code.
Prefabricated Building (also called prefab, pre-manufactured)
An umbrella term for a building that is fabricated or manufactured, to some degree, in a factory or other offsite location, before transportation to the building site for finishing. Prefabricated buildings are different from traditional buildings, which are constructed start to finish at the building site. Modular buildings, modular component buildings and portable/relocatable buildings are classified under the prefabricated umbrella, but only modular and portable/relocatable buildings are piggybackable.
Traditional Building (also called stick-built, site-built, conventional)
A building that is completely constructed, ground-up, at the jobsite by onsite contractors using building materials delivered to, and stored at, the build site.
Construction is a process. All buildings are not constructed the same way, and the construction methodology used is a key determinant that impacts a building’s eligibility for piggyback procurement.
A process mandated by the California Public Contract Code to stimulate competition and protect against misuse of public funds by requiring public agencies to conduct an open bidding procedure for public construction projects, where all qualified bidders are given the opportunity to submit a bid before a contract is awarded.
Conventional Construction (also called site-built, stick-built, traditional)
A construction method where buildings are constructed ground-up onsite vs. manufactured offsite in a factory and delivered to the building site for installation. Conventional construction is considered real property and is not piggybackable.
A phase of construction where modular buildings are assembled wholly or partially in a controlled factory environment before delivery to the building site for installation and finishing.
Wood or concrete building support beneath the first floor, constructed on or below grade. Foundation types are used to identify a building as permanent or relocatable, determining whether or not the building can be piggybacked.
Concrete Slab-on-Grade Foundation
An inflexible, permanent foundation where a concrete slab sits directly on grade, allowing no space between the ground and the finished building. Slab-on-grade buildings are considered permanent and are not piggybackable.
Concrete Stem Wall Foundation
A flexible foundation with a short continuous perimeter wall and concrete footings, allowing both on-grade building entry and easy access to plumbing, electrical and technology wiring and cable. Modular buildings on stem wall foundations remain relocatable and can be piggybacked.
An inflexible foundation that is permanently affixed to the land, making a building difficult to remove and relocate without significant damage to the structure and site. Buildings on permanent foundations are considered immovable real property and are not piggybackable.
A flexible above-ground foundation constructed onsite using lumber; generally used for temporary or shorter lifecycle buildings and easily removed. Relocatable buildings on a wood foundation are easily moved and are piggybackable.
A phase of construction where factory-built building modules are placed and secured on a site-built foundation and connected to form a finished building.
A sophisticated, highly automated construction process where a building is constructed offsite in a controlled factory environment, using the same materials and built to the same codes, standards and specifications as a traditional building but delivered on an accelerated schedule. Factory-produced building modules are connected onsite to form a complete building.
Flat, one-dimensional building components that do not individually enclose space and must be assembled section by section at the building site to form a six-sided space. Roof trusses, wall panels, floor systems and cabinetry are non-volumetric building components. Non-volumetric components are, by code, not piggybackable; volumetric building modules that fully enclose space are piggybackable.
Construction that takes place away from the building site. Building modules constructed offsite are delivered to the building site 90-95% complete.
Construction that takes place, start to finish, at the building site.
The multi-phased process of purchasing a building, from design and construction through delivery and finishing.
The ability to move a fully-intact building from place to place over public streets. Modular buildings set on concrete footings have a lifecycle comparable to traditional buildings yet remain relocatable, at the owner’s discretion. The term describes how the building can be used, not how the building owner chooses to use it.
Volumetric Building Module
An individual three-dimensional module that is fully-built, integrating walls, floor and roof to form a fully-enclosed, six-sided space that can be seamlessly connected with other modules onsite to form a complete building. Volumetric building modules are piggybackable while non-volumetric components are not.
The ability to piggyback buildings/facilities hinges on legal opinions, California Code and case law. The following statutes and citations provide a legal basis for piggyback contracts, helping determine whether a project is—or isn’t– piggybackable.
Attorney General Opinion 05-405
A 2006 legal opinion rendered by former California Attorney General Bill Lockyer that has served as a clear identifier for which buildings can be purchased via piggyback contracting and which cannot: “A school district may not, without advertising for bids, contract with another public agency to acquire factory-built modular building components for installation on a permanent foundation.” This opinion does not apply to relocatable buildings.
California Code of Regulations (CCR)
A collection of 29 legal codes enacted by the California State Legislature, which collectively form the general statutory law of California. The codes most relevant to, and most cited for, piggyback contracting include:
California Education Code (EDC or Ed Code)
A collection of laws directly related to California K-12 public schools that regulate the actions of local school boards and county offices of education. The Ed Code is permissive, allowing California school districts to take any action not specifically prohibited by code.
California Public Contract Code (PCC)
A collection of laws created to provide uniformity in public contracts, encouraging and providing clarification for competitive bidding and aiding public officials in the efficient administration of, and full compliance with, the awarding of public contracts.
California Sales and Use Tax Regulations
A collection of laws regulating the tax liability for California businesses, including construction contractors who sell or lease tangible personal property, with liability dependent on how materials, fixtures and equipment are purchased and how and where such items are assembled.
California Education Code Section 17070.15
A section of the EDC that defines a portable classroom as one that can be transported fully-built with roof and floor integrally attached: “a classroom building of one or more stories that is designed and constructed to be relocatable and transportable over public streets, and with respect to a single story portable classroom, is designed and constructed for relocation without the separation of the roof or floor from the building.”
California Public Contract Code Section 20118
A section of the PCC that permits school districts to purchase personal property only—not real property—using piggyback contracts: “The governing board of any school district, without advertising for bids, if the board has determined it to be in the best interests of the district, may authorize by contract, lease, requisition, or purchase order, any public corporation or agency, including any county, city, town, or district, to: Lease data-processing equipment, purchase materials, supplies, equipment, automotive vehicles, tractors, and other personal property for the district in the manner in which the public corporation or agency is authorized by law to make the leases or purchases from a vendor”
California Sales and Use Tax Regulation 1521
A section of the CCR that defines a school building wholly or substantially manufactured at an offsite location for installation on a site owned or leased by a school district or a community college district as a “Factory-built School Building (relocatable classroom)”. Regulation section 1521( c)(4) states “a contract to furnish and install factory-built school buildings is not a construction contract but rather is a sale of tangible personal property.”
Legally defined as something other than land that is subject to ownership and is movable from place to place. Personal property can be tangible or intangible.
Tangible personal property can be physically handled. Modular buildings are tangible personal property and can be procured using the piggyback process.
Intangible personal property cannot be physically handled. Stocks, bonds and trust funds are intangible personal property.
Legally defined as land or other property that is attached to land, including prefabricated component buildings affixed to a permanent foundation and not readily relocatable. Because real property can’t be moved, it’s not piggybackable, unlike personal property, which is movable from place to place.
Want to learn more about piggyback contracting?
Piggyback procurement is an important tool for school districts looking to build new facilities. Thousands of modular buildings have been legally procured using the piggyback process in California, allowing many districts to update facilities faster and more affordably to better meet students’ and teachers’ needs.
All AMS and GEN7 buildings are piggybackable, offering streamlined procurement for a full range of turnkey and premium building solutions.
Given the recent SAB comments around piggybacks and state funding, please reach out to us to explore your options. We’ll be happy to help you find the right building solution for your project needs, discuss your procurement options and guide you through the process. Contact us to schedule a meeting.
As with all contractual items, also please confer with your legal counsel.
Check out other AMS blog articles on piggyback procurement and financing options:
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