AN ACT

 1-1     relating to the construction or repair of facilities by school

 1-2     districts and institutions of higher education.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subsections (a), (b), (e), and (g), Section

 1-5     44.031, Education Code, are amended to read as follows:

 1-6           (a)  Except as provided by this subchapter [section], all

 1-7     school district contracts, except contracts for the purchase of

 1-8     produce or vehicle fuel, valued at $25,000 or more in the aggregate

 1-9     for each 12-month period shall be made by the method, of the

1-10     following methods, that provides the best value to the district:

1-11                 (1)  competitive bidding;

1-12                 (2)  competitive sealed proposals;

1-13                 (3)  a request for proposals;

1-14                 (4)  a catalogue purchase as provided by Subchapter B,

1-15     Chapter 2157, Government Code;

1-16                 (5)  an interlocal contract; [or]

1-17                 (6)  a design/build contract;

1-18                 (7)  a contract to construct, rehabilitate, alter, or

1-19     repair facilities that involves using a construction manager; or

1-20                 (8)  a job order contract for the minor repair,

1-21     rehabilitation, or alteration of a facility.

1-22           (b)  Except as provided by this subchapter, in [In]

1-23     determining to whom to award a contract, the district may consider:

 2-1                 (1)  the purchase price;

 2-2                 (2)  the reputation of the vendor and of the vendor's

 2-3     goods or services;

 2-4                 (3)  the quality of the vendor's goods or services;

 2-5                 (4)  the extent to which the goods or services meet the

 2-6     district's needs;

 2-7                 (5)  the vendor's past relationship with the district;

 2-8                 (6)  the impact on the ability of the district to

 2-9     comply with laws and rules relating to historically underutilized

2-10     businesses;

2-11                 (7)  the total long-term cost to the district to

2-12     acquire the vendor's goods or services; and

2-13                 (8)  any other relevant factor that a private business

2-14     entity would consider in selecting a vendor.

2-15           (e)  To the extent of any conflict, this subchapter [section]

2-16     prevails over any other law relating to the purchasing of goods and

2-17     services except a law relating to contracting with historically

2-18     underutilized businesses.

2-19           (g)  Notice of the time by when and place where the bids or

2-20     proposals, or the responses to a request for qualifications, will

2-21     be received shall be published in the county in which the

2-22     district's central administrative office is located, once a week

2-23     for at least two weeks before the deadline for receiving bids,

2-24     proposals, or responses to a request for qualifications; [date set

2-25     for awarding the contract,] except that on contracts involving less

 3-1     than $25,000, the advertising may be limited to two successive

 3-2     issues of any newspaper published in the county in which the

 3-3     district's central administrative office is located, and if there

 3-4     is not a newspaper in that county, the advertising shall be

 3-5     published in a newspaper in the county nearest the county seat of

 3-6     the county in which the district's central administrative office is

 3-7     located.

 3-8           SECTION 2.  Subchapter B, Chapter 44, Education Code, is

 3-9     amended by adding Sections 44.0315 and 44.035 through 44.041 to

3-10     read as follows:

3-11           Sec. 44.0315.  DEFINITIONS.  In this subchapter:

3-12                 (1)  "Architect" means an individual registered as an

3-13     architect under Chapter 478, Acts of the 45th Legislature, Regular

3-14     Session, 1937 (Article 249a, Vernon's Texas Civil Statutes).

3-15                 (2)  "Contractor" in the context of a contract for the

3-16     construction, rehabilitation, alteration, or repair of a facility

3-17     means a sole proprietorship, partnership, corporation, or other

3-18     legal entity that assumes the risk for constructing,

3-19     rehabilitating, altering, or repairing all or part of the facility

3-20     at the contracted price.

3-21                 (3)  "Engineer" means an individual registered as a

3-22     professional engineer under The Texas Engineering Practice Act

3-23     (Article 3271a, Vernon's Texas Civil Statutes).

3-24                 (4)  "Facility" means real property, including

3-25     buildings and associated structures and improved or unimproved

 4-1     land.

 4-2                 (5)  "Fee" in the context of a contract for the

 4-3     construction, rehabilitation, alteration, or repair of a facility

 4-4     means the payment a construction manager receives for its overhead

 4-5     and profit in performing its services.

 4-6                 (6)  "General conditions" in the context of a contract

 4-7     for the construction, rehabilitation, alteration, or repair of a

 4-8     facility means on-site management, administrative personnel,

 4-9     insurance, bonds, equipment, utilities, and incidental work,

4-10     including minor field labor and materials.

4-11           Sec. 44.035.  COMPETITIVE SEALED PROPOSALS FOR CONSTRUCTION

4-12     SERVICES.  (a)  Except as otherwise provided by this subchapter, a

4-13     school district using competitive sealed proposals to select a

4-14     contractor for construction services, to select a construction

4-15     manager, or to award a job order contract for construction services

4-16     shall base its selection or award on a combination of price and

4-17     other factors that the district determines provides the best value

4-18     to the district.

4-19           (b)  A school district using competitive sealed proposals

4-20     may discuss proposals with offerors after proposals have been

4-21     opened to allow for clarification and changes.  The district shall

4-22     take adequate precautions to ensure that information from competing

4-23     proposals is not disclosed to other offerors.

4-24           Sec. 44.036.  DESIGN-BUILD CONTRACTS FOR FACILITIES.  (a)  In

4-25     this section:

 5-1                 (1)  "Design-build contract" means a single contract

 5-2     with a design-build firm for the design and construction of a

 5-3     facility.

 5-4                 (2)  "Design-build firm" means a partnership,

 5-5     corporation, or other legal entity or team that includes an

 5-6     engineer or architect and builder qualified to engage in building

 5-7     construction in Texas.

 5-8                 (3)  "Design criteria package" means a set of documents

 5-9     that provides sufficient information to permit a design-build firm

5-10     to prepare a response to a school district's request for proposals.

5-11     The design criteria package must specify criteria the district

5-12     considers necessary to describe the project and may include, as

5-13     appropriate, the legal description of the site, survey information

5-14     concerning the site, interior space requirements, special material

5-15     requirements, material quality standards, conceptual criteria for

5-16     the project, special equipment requirements, cost or budget

5-17     estimates, time schedules, quality assurance and quality control

5-18     requirements, site development requirements, applicable codes and

5-19     ordinances, provisions for utilities, parking requirements, or any

5-20     other requirement, as applicable.

5-21           (b)  A school district may use the design-build method for

5-22     the construction, rehabilitation, alteration, or repair of a

5-23     facility.  In using that method and in entering into a contract for

5-24     the services of a design-build firm, the contracting school

5-25     district and the design-build firm shall follow the procedures

 6-1     provided by Subsections (c)-(j).

 6-2           (c)  The district may designate an engineer or architect to

 6-3     act as its representative.  If the district's engineer or architect

 6-4     is not a full-time employee of the district, any engineer or

 6-5     architect designated shall be selected on the basis of demonstrated

 6-6     competence and qualifications in accordance with Subchapter A,

 6-7     Chapter 2254, Government Code.

 6-8           (d)  The district shall prepare a request for qualifications

 6-9     that includes general information on the project site, project

6-10     scope, budget, special systems, selection criteria, and other

6-11     information that may assist potential design-build firms in

6-12     submitting proposals for the project.  The district shall also

6-13     prepare the design criteria package that includes more detailed

6-14     information on the project.  If the preparation of the design

6-15     criteria package requires engineering or architectural services

6-16     that constitute the practice of engineering within the meaning of

6-17     The Texas Engineering Practice Act (Article 3271a, Vernon's Texas

6-18     Civil Statutes) or the practice of architecture within the meaning

6-19     of Chapter 478, Acts of the 45th Legislature, Regular Session, 1937

6-20     (Article 249a, Vernon's Texas Civil Statutes), those services shall

6-21     be provided in accordance with the applicable law.

6-22           (e)  The district shall evaluate proposals and select a

6-23     design-build firm in two phases:

6-24                 (1)  In phase one, the district shall evaluate each

6-25     offeror's experience, technical competence, and capability to

 7-1     perform, the past performance of the offeror's team and members of

 7-2     the team, and other appropriate factors submitted by the team or

 7-3     firm in response to the request for qualifications, except that

 7-4     cost-related or price-related evaluation factors are not permitted.

 7-5     Each offeror must certify to the district that each engineer or

 7-6     architect that is a member of its team was selected based on

 7-7     demonstrated competence and qualifications.  The district shall

 7-8     qualify a maximum of five potential offerors to submit additional

 7-9     information regarding technical proposals, implementation, and

7-10     costing methodologies in response to a formal request for proposals

7-11     based on the design criteria package.

7-12                 (2)  In phase two, the district shall evaluate offerors

7-13     on the basis of demonstrated competence and qualifications,

7-14     considerations of the safety and long-term durability of the

7-15     project, the feasibility of implementing the project as proposed,

7-16     the ability of the offeror to meet schedules, costing methodology,

7-17     or other factors as appropriate.  The district may not require

7-18     offerors to submit detailed engineering or architectural designs as

7-19     part of the proposal.  The district shall select the design-build

7-20     firm that submits the proposal offering the best value for the

7-21     district.

7-22           (f)  Following selection of a design-build firm under

7-23     Subsection (e), that firm's engineers or architects shall complete

7-24     the design, submitting all design elements for review and

7-25     determination of scope compliance by the district's engineer or

 8-1     architect before or concurrently with construction.

 8-2           (g)  An engineer shall have responsibility for compliance

 8-3     with the engineering design requirements and all other applicable

 8-4     requirements of The Texas Engineering Practice Act (Article 3271a,

 8-5     Vernon's Texas Civil Statutes).  An architect shall have

 8-6     responsibility for compliance with the requirements of Chapter 478,

 8-7     Acts of the 45th Legislature, Regular Session, 1937 (Article 249a,

 8-8     Vernon's Texas Civil Statutes).

 8-9           (h)  The district shall provide or contract for,

8-10     independently of the design-build firm, the inspection services,

8-11     the testing of construction materials engineering, and the

8-12     verification testing services necessary for acceptance of the

8-13     facility by the district.  The district shall select those services

8-14     for which it contracts in accordance with Section 2254.004,

8-15     Government Code.

8-16           (i)  The design-build firm shall supply a signed and sealed

8-17     set of construction documents for the project to the district at

8-18     the conclusion of construction.

8-19           (j)  A payment or performance bond is not required for, and

8-20     may not provide coverage for, the portion of a design-build

8-21     contract under this section that includes design services only.

8-22           Sec. 44.037.  CONTRACTS FOR FACILITIES:  CONSTRUCTION

8-23     MANAGER-AGENT.  (a)  A school district may use the construction

8-24     manager-agent method for the construction, rehabilitation,

8-25     alteration, or repair of a facility.  In using that method and in

 9-1     entering into a contract for the services of a construction

 9-2     manager-agent, a district shall follow the procedures prescribed by

 9-3     this section.

 9-4           (b)  A construction manager-agent is a sole proprietorship,

 9-5     partnership, corporation, or other legal entity that provides

 9-6     consultation to the school district regarding construction,

 9-7     rehabilitation, alteration, or repair of the facility.  A

 9-8     construction manager-agent represents the district in a fiduciary

 9-9     capacity, except that it may perform general conditions as provided

9-10     by the contract.

9-11           (c)  Before or concurrently with selecting a construction

9-12     manager-agent, the district shall select or designate an engineer

9-13     or architect who shall prepare the construction documents for the

9-14     project and who has full responsibility for complying with The

9-15     Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil

9-16     Statutes) or Chapter 478, Acts of the 45th Legislature, Regular

9-17     Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), as

9-18     applicable.  If the engineer or architect is not a full-time

9-19     employee of the district, the district shall select the engineer or

9-20     architect on the basis of demonstrated competence and

9-21     qualifications as provided by Section 2254.004, Government Code.

9-22           (d)  A district shall select a construction manager-agent on

9-23     the basis of demonstrated competence and qualifications  in the

9-24     same manner as provided for the selection of engineers or

9-25     architects under Section 2254.004, Government Code.

 10-1          (e)  A district using the construction manager-agent method

 10-2    shall procure, in accordance with applicable law and in any manner

 10-3    authorized by this chapter, a general contractor, trade

 10-4    contractors, or subcontractors who will serve as the prime

 10-5    contractor for their specific portion of the work.

 10-6          (f)  The district or the construction manager-agent shall

 10-7    procure in accordance with Section 2254.004, Government Code, all

 10-8    of the testing of construction materials engineering, the

 10-9    inspection services, and the verification testing services

10-10    necessary for acceptance of the facility by the district.

10-11          Sec. 44.038.  CONTRACTS FOR FACILITIES:  CONSTRUCTION

10-12    MANAGER-AT-RISK.  (a)  A school district may use the construction

10-13    manager-at-risk method for the construction, rehabilitation,

10-14    alteration, or repair of a facility.  In using that method and in

10-15    entering into a contract for the services of a construction

10-16    manager-at-risk, a district shall follow the procedures prescribed

10-17    by this section.

10-18          (b)  A construction manager-at-risk is a sole proprietorship,

10-19    partnership, corporation, or other legal entity that assumes the

10-20    risk for construction, rehabilitation, alteration, or repair of a

10-21    facility at the contracted price as a general contractor and

10-22    provides consultation to the school district regarding construction

10-23    during and after the design of the facility.

10-24          (c)  Before or concurrently with selecting a construction

10-25    manager-at-risk, the district shall select or designate an engineer

 11-1    or architect who shall prepare the construction documents for the

 11-2    project and who has full responsibility for complying with The

 11-3    Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil

 11-4    Statutes) or Chapter 478, Acts of the 45th Legislature, Regular

 11-5    Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), as

 11-6    applicable.  If the engineer or architect is not a full-time

 11-7    employee of the district, the district shall select the engineer or

 11-8    architect on the basis of demonstrated competence and

 11-9    qualifications as provided by Section 2254.004, Government Code.

11-10          (d)  The district shall provide or contract for,

11-11    independently of the construction manager-at-risk, the inspection

11-12    services, the testing of construction materials engineering, and

11-13    the verification testing services necessary for acceptance of the

11-14    facility by the district.  The district shall select those services

11-15    for which it contracts in accordance with Section 2254.004,

11-16    Government Code.

11-17          (e)  The district shall prepare a request for competitive

11-18    sealed proposals that includes general information on the project

11-19    site, project scope, schedule, selection criteria, estimated

11-20    budget, the time and place for receipt of proposals, and other

11-21    information that may assist the district in its selection of a

11-22    construction manager-at-risk.  The district may request that

11-23    proposals provide the construction manager's proposed fee and its

11-24    price for fulfilling the general conditions.  The district shall

11-25    state the selection criteria in the request for proposals.  The

 12-1    selection criteria may include the offeror's experience, past

 12-2    performance, safety record, proposed personnel and methodology, and

 12-3    other appropriate factors that demonstrate the capability of the

 12-4    construction manager.

 12-5          (f)  The district may provide for prequalifying offerors

 12-6    before proposals are submitted.  Prequalification may not be a

 12-7    conclusive determination that an offeror offers the best value to

 12-8    the district, and a prequalified offeror may be rejected on the

 12-9    basis of subsequently discovered information.  A failure to

12-10    prequalify does not bar a subsequent determination that an offeror

12-11    offers the best value to the district with respect to a given

12-12    proposal.

12-13          (g)  The district shall receive, publicly open, and read

12-14    aloud the names of the offerors and the monetary proposals, if any,

12-15    for each proposal.  Within 45 days after the date of opening the

12-16    proposals, the district shall evaluate and rank each proposal

12-17    submitted in relation to the criteria set forth in the request for

12-18    proposals.

12-19          (h)  The district shall select the offeror that offers the

12-20    best value to the district based on the published selection

12-21    criteria and on its ranking evaluation.   If the district is unable

12-22    to reach a contract agreement with the selected offeror, the

12-23    district shall terminate further discussions and proceed to the

12-24    next offeror in the order of the selection ranking until a contract

12-25    agreement is reached or all proposals are rejected.

 13-1          (i)  A construction manager-at-risk shall publicly advertise

 13-2    and solicit either competitive bids or competitive sealed proposals

 13-3    from trade contractors or subcontractors for the performance of all

 13-4    major elements of the work other than the minor work that may be

 13-5    included in the general conditions.  A construction manager-at-risk

 13-6    may seek to perform portions of the work itself if the construction

 13-7    manager-at-risk submits its bid or proposal for those portions of

 13-8    the work in the same manner as all other trade contractors or

 13-9    subcontractors and if the district determines that the construction

13-10    manager-at-risk's bid or proposal provides the best value for the

13-11    district.

13-12          (j)  The construction manager-at-risk and the district or its

13-13    representative shall receive and open all trade contractor or

13-14    subcontractor bids or proposals in a manner that does not disclose

13-15    the contents of the bid or proposal during the selection process.

13-16    All bids or proposals shall be made public within seven days after

13-17    the date of final selection.

13-18          (k)  If the construction manager-at-risk reviews, evaluates,

13-19    and recommends to the district a bid or proposal from a trade

13-20    contractor or subcontractor but the district requires another bid

13-21    or proposal to be accepted, the district shall compensate the

13-22    construction manager-at-risk by a change in price, time, or

13-23    guaranteed maximum cost for any additional cost and risk that the

13-24    construction manager-at-risk may incur because of the district's

13-25    requirement that another bid or proposal be accepted.

 14-1          Sec. 44.039.  SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES

 14-2    THROUGH COMPETITIVE SEALED PROPOSALS.  (a)  In selecting a

 14-3    contractor for construction, rehabilitation, alteration, or repair

 14-4    services for a facility through competitive sealed proposals, a

 14-5    school district shall follow the procedures prescribed by this

 14-6    section.

 14-7          (b)  The district shall select or designate an engineer or

 14-8    architect to prepare construction documents for the project.  The

 14-9    selected or designated engineer or architect has full

14-10    responsibility for complying with The Texas Engineering Practice

14-11    Act (Article 3271a, Vernon's Texas Civil Statutes) or Chapter 478,

14-12    Acts of the 45th Legislature, Regular Session, 1937 (Article 249a,

14-13    Vernon's Texas Civil Statutes), as applicable.  If the engineer or

14-14    architect is not a full-time employee of the district, the district

14-15    shall select the engineer or architect on the basis of demonstrated

14-16    competence and qualifications as provided by Section 2254.004,

14-17    Government Code.

14-18          (c)  The district shall provide or contract for,

14-19    independently of the contractor, the inspection services, the

14-20    testing of construction materials engineering, and the verification

14-21    testing services necessary for acceptance of the facility by the

14-22    district.  The district shall select those services for which it

14-23    contracts in accordance with Section 2254.004, Government Code.

14-24          (d)  The district shall prepare a request for competitive

14-25    sealed proposals that includes construction documents, selection

 15-1    criteria, estimated budget, project scope, schedule, and other

 15-2    information that contractors may require to respond to the request.

 15-3    The district shall state the selection criteria in the request for

 15-4    proposals.  The selection criteria may include the offeror's

 15-5    experience, past performance, safety record, proposed personnel and

 15-6    methodology, and other appropriate factors that demonstrate the

 15-7    capability of the contractor.

 15-8          (e)  The district may provide for prequalifying offerors

 15-9    before proposals are submitted.  Prequalification may not be a

15-10    conclusive determination that an offeror offers the best value to

15-11    the district, and a prequalified offeror may be rejected on the

15-12    basis of subsequently discovered information.  A failure to

15-13    prequalify does not bar a subsequent determination that an offeror

15-14    offers the best value to the district with respect to a given

15-15    proposal.

15-16          (f)  The district shall receive, publicly open, and read

15-17    aloud the names of the offerors and the monetary proposals, if any,

15-18    stated in each proposal.  Within 45 days after the date of opening

15-19    the proposals, the district shall evaluate and rank each proposal

15-20    submitted in relation to the published selection criteria.

15-21          (g)  The district shall select the offeror that offers the

15-22    best value to the district based on the published selection

15-23    criteria and on its ranking evaluation.  The district and its

15-24    engineer or architect may discuss with the selected offeror options

15-25    for cost reduction.  If the district is unable to reach a contract

 16-1    agreement with the selected offeror, the district shall terminate

 16-2    further discussions and proceed to the next offeror in the order of

 16-3    the selection ranking until a contract agreement is reached or all

 16-4    proposals are rejected.

 16-5          (h)  In determining best value for the district, the district

 16-6    is not restricted to considering price alone, but may consider any

 16-7    other factor stated in the selection criteria.

 16-8          Sec. 44.040.  SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES

 16-9    THROUGH COMPETITIVE BIDDING.  (a)  Except to the extent prohibited

16-10    by other law and to the extent consistent with this subchapter, a

16-11    school district may use competitive bidding to select a contractor

16-12    to perform construction, rehabilitation, alteration, or repair

16-13    services for a facility.

16-14          (b)  Sections 271.021, 271.022, 271.026, 271.027(a), and

16-15    271.0275-271.030, Local Government Code, apply to a competitive

16-16    bidding process under this section.

16-17          (c)  A school district shall award a competitively bid

16-18    contract at the bid amount to the bidder offering the best value to

16-19    the district according to the selection criteria that were

16-20    established by the district.  The selection criteria may include

16-21    the factors listed in Section 44.031(b).

16-22          Sec. 44.041.  JOB ORDER CONTRACTS FOR FACILITIES REPAIR.

16-23    (a)  A school district may award job order contracts for the minor

16-24    repair, rehabilitation, or alteration of a facility if the work is

16-25    of a recurring nature but the delivery times are indefinite and

 17-1    indefinite quantities and orders are awarded substantially on the

 17-2    basis of predescribed and prepriced tasks.

 17-3          (b)  The school district shall advertise for, receive, and

 17-4    publicly open competitive sealed proposals for job order contracts

 17-5    based on time and material rates for various types and

 17-6    classifications of work.  The rates under a job order contract

 17-7    shall be in effect for at least six months and for not longer than

 17-8    two years.

 17-9          (c)  The district may require offerors to submit additional

17-10    information besides rates, including experience, past performance,

17-11    and proposed personnel and methodology.

17-12          (d)  The district may award job order contracts to one or

17-13    more contractors based on price proposals, experience, past

17-14    performance, proposed personnel and methodology, safety record, and

17-15    other appropriate factors.

17-16          (e)  An order for a job or project under the job order

17-17    contract must be signed by the district's representative and the

17-18    contractor.  The order may be a fixed price, lump-sum contract

17-19    based on a statement of work negotiated between the district or its

17-20    representative and the contractor, or the order may be a unit price

17-21    order based on estimated quantities.  The contractor shall provide

17-22    payment and performance bonds, if required by law, based on the

17-23    amount or estimated amount of any order.

17-24          SECTION 3.  Chapter 51, Education Code, is amended by adding

17-25    Subchapter S to read as follows:

 18-1     SUBCHAPTER S.  CONSTRUCTION AND REPAIR OF PERMANENT IMPROVEMENTS

 18-2          Sec. 51.776.  DEFINITIONS.  In this subchapter:

 18-3                (1)  "Architect" means an individual registered as an

 18-4    architect under Chapter 478, Acts of the 45th Legislature, Regular

 18-5    Session, 1937 (Article 249a, Vernon's Texas Civil Statutes).

 18-6                (2)  "Board" means the governing body of an

 18-7    institution.

 18-8                (3)  "Contractor" in the context of a contract for the

 18-9    construction, rehabilitation, alteration, or repair of a facility

18-10    means a sole proprietorship, partnership, corporation, or other

18-11    legal entity that assumes the risk for constructing,

18-12    rehabilitating, altering, or repairing all or part of the facility

18-13    at the contracted price.

18-14                (4)  "Engineer" means an individual registered as a

18-15    professional engineer under The Texas Engineering Practice Act

18-16    (Article 3271a, Vernon's Texas Civil Statutes).

18-17                (5)  "Facility" means real property, including

18-18    buildings and associated structures and improved or unimproved

18-19    land.

18-20                (6)  "Fee" in the context of a contract for the

18-21    construction, rehabilitation, alteration, or repair of a facility

18-22    means the payment a construction manager receives for its overhead

18-23    and profit in performing its services.

18-24                (7)  "General conditions" in the context of a contract

18-25    for the construction, rehabilitation, alteration, or repair of a

 19-1    facility means on-site management, administrative personnel,

 19-2    insurance, bonds, equipment, utilities, and incidental work,

 19-3    including minor field labor and materials.

 19-4                (8)  "Institution" means an institution of higher

 19-5    education as defined by Section 61.003.

 19-6          Sec. 51.777.  DELEGATION OF AUTHORITY.  A board may, as

 19-7    appropriate, delegate by rule its authority under this subchapter

 19-8    to its designated representative.

 19-9          Sec. 51.778.  COMPETITIVE BIDDING ON CONTRACTS.  (a)  Except

19-10    as otherwise provided by this subchapter, all contracts for the

19-11    construction or erection of permanent improvements at an

19-12    institution are void unless made after advertising for bids for the

19-13    contracts in a manner prescribed by the institution's board,

19-14    receiving sealed competitive bids, and awarding of the contract to

19-15    the lowest responsible bidder by the board.

19-16          (b)  If a contract awarded under sealed competitive bidding

19-17    is to be recommended for award to other than the lowest bidder, any

19-18    bidder making a lower bid than the recommended bid shall be

19-19    notified of the recommendation for award and shall be allowed an

19-20    opportunity before the award to present evidence to the board or

19-21    its designated representative as to the responsibility of that

19-22    bidder.

19-23          Sec. 51.779.  COMPETITIVE SEALED PROPOSALS FOR CONSTRUCTION

19-24    SERVICES.  (a)  Except as otherwise provided by this subchapter,

19-25    the board of an institution using competitive sealed proposals to

 20-1    select a contractor for construction services, to select a

 20-2    construction manager, or to award a job order contract for

 20-3    construction services shall base its selection or award on a

 20-4    combination of price and other factors that the board determines

 20-5    provides the best value to the institution.

 20-6          (b)  An institution using competitive sealed proposals  may

 20-7    discuss proposals with offerors after proposals have been opened to

 20-8    allow for clarification and changes.  The institution shall take

 20-9    adequate precautions to ensure that information from competing

20-10    proposals is not disclosed to other offerors.

20-11          Sec. 51.780.  DESIGN-BUILD CONTRACTS FOR FACILITIES.  (a)  In

20-12    this section:

20-13                (1)  "Design-build contract" means a single contract

20-14    with a design-build firm for the design and construction of a

20-15    facility.

20-16                (2)  "Design-build firm" means a partnership,

20-17    corporation, or other legal entity or team that includes an

20-18    engineer or architect and builder qualified to engage in building

20-19    construction in Texas.

20-20                (3)  "Design criteria package" means a set of documents

20-21    that provides sufficient information to permit a design-build firm

20-22    to prepare a response to an institution's request for proposals.

20-23    The design criteria package must specify criteria the institution

20-24    considers necessary to describe the project and may include, as

20-25    appropriate, the legal description of the site, survey information

 21-1    concerning the site, interior space requirements, special material

 21-2    requirements, material quality standards, conceptual criteria for

 21-3    the project, special equipment requirements, cost or budget

 21-4    estimates, time schedules, quality assurance and quality control

 21-5    requirements, site development requirements, applicable codes and

 21-6    ordinances, provisions for utilities, parking requirements, or any

 21-7    other requirement, as applicable.

 21-8          (b)  An institution may use the design-build method for the

 21-9    construction, rehabilitation, alteration, or repair of a facility.

21-10    In  using that method and in entering into a contract for the

21-11    services of a design-build firm, the contracting institution and

21-12    the design-build firm shall follow the procedures provided by

21-13    Subsections (c)-(k).

21-14          (c)  The board may designate an engineer or architect to act

21-15    as its representative.  If the board's engineer or architect is not

21-16    a full-time employee of the institution, any engineer or architect

21-17    designated shall be selected on the basis of demonstrated

21-18    competence and qualifications in accordance with Subchapter A,

21-19    Chapter 2254, Government Code.

21-20          (d)  The institution shall prepare a request for

21-21    qualifications that includes general information on the project

21-22    site, project scope, budget, special systems, selection criteria,

21-23    and other information that may assist potential design-build firms

21-24    in submitting proposals for the project.  The institution shall

21-25    also prepare the design criteria package that includes more

 22-1    detailed information on the project.  If the preparation of the

 22-2    design criteria package requires engineering or architectural

 22-3    services that constitute the practice of engineering within the

 22-4    meaning of The Texas Engineering Practice Act (Article 3271a,

 22-5    Vernon's Texas Civil Statutes) or the practice of architecture

 22-6    within the meaning of Chapter 478, Acts of the 45th Legislature,

 22-7    Regular Session, 1937 (Article 249a, Vernon's Texas Civil

 22-8    Statutes), those services shall be provided in accordance with the

 22-9    applicable law.

22-10          (e)  The board or its representative shall publish the

22-11    request for qualifications in a manner prescribed by the board.

22-12          (f)  The board or its representative shall evaluate proposals

22-13    and select a design-build firm in two phases:

22-14                (1)  In phase one, the board or its representative

22-15    shall evaluate each offeror's experience, technical competence, and

22-16    capability to perform, the past performance of the offeror's team

22-17    and members of the team, and other appropriate factors submitted by

22-18    the team or firm in response to the request for qualifications,

22-19    except that cost-related or price-related evaluation factors are

22-20    not permitted.  Each offeror must certify to the board that each

22-21    engineer or architect that is a member of its team was selected

22-22    based on demonstrated competence and qualifications.  The board or

22-23    its representative shall qualify a maximum of five potential

22-24    offerors to submit additional information regarding technical

22-25    proposals, implementation, and costing methodologies in response to

 23-1    a formal request for proposals based on the design criteria

 23-2    package.

 23-3                (2)  In phase two, the board or its representative

 23-4    shall evaluate offerors on the basis of demonstrated competence and

 23-5    qualifications, considerations of the safety and long-term

 23-6    durability of the project, the feasibility of implementing the

 23-7    project as proposed, the ability of the offeror to meet schedules,

 23-8    costing methodology, or other factors as appropriate.  The

 23-9    institution may not require offerors to submit detailed engineering

23-10    or architectural design as part of the proposal.  The board shall

23-11    select the design-build firm that submits the proposal offering the

23-12    best value for the institution.

23-13          (g)  Following selection of a design-build firm under

23-14    Subsection (f), that firm's engineers or architects shall complete

23-15    the design, submitting all design elements for review and

23-16    determination of scope compliance by the institution's engineer or

23-17    architect before or concurrently with construction.

23-18          (h)  An engineer shall have responsibility for compliance

23-19    with the engineering design requirements and all other applicable

23-20    requirements of The Texas Engineering Practice Act (Article 3271a,

23-21    Vernon's Texas Civil Statutes).  An architect shall have

23-22    responsibility for compliance with the requirements of Chapter 478,

23-23    Acts of the 45th Legislature, Regular Session, 1937 (Article 249a,

23-24    Vernon's Texas Civil Statutes).

23-25          (i)  The institution shall provide or contract for,

 24-1    independently of the design-build firm, the inspection services,

 24-2    the testing of construction materials engineering, and the

 24-3    verification testing services necessary for acceptance of the

 24-4    facility by the institution.  The institution shall select those

 24-5    services for which it contracts in accordance with Section

 24-6    2254.004, Government Code.

 24-7          (j)  The design-build firm shall supply a signed and sealed

 24-8    set of construction documents for the project to the institution at

 24-9    the conclusion of construction.

24-10          (k)  A payment or performance bond is not required for, and

24-11    may not provide coverage for, the portion of a design-build

24-12    contract under this section that includes design services only.

24-13          Sec. 51.781.  CONTRACTS FOR FACILITIES:  CONSTRUCTION

24-14    MANAGER-AGENT.  (a)  An institution may use the construction

24-15    manager-agent method for the construction, rehabilitation,

24-16    alteration, or repair of a facility.  In using that method and in

24-17    entering into a contract for the services of a construction

24-18    manager-agent, a board shall follow the procedures prescribed by

24-19    this section.

24-20          (b)  A construction manager-agent is a sole proprietorship,

24-21    partnership, corporation, or other legal entity that provides

24-22    consultation to the institution regarding construction,

24-23    rehabilitation, alteration, or repair of the facility.  A

24-24    construction manager-agent represents the institution in a

24-25    fiduciary capacity, except that it may perform general conditions

 25-1    as provided by the contract.

 25-2          (c)  Before or concurrently with selecting a construction

 25-3    manager-agent, the board shall select or designate an engineer or

 25-4    architect who shall prepare the construction documents for the

 25-5    project and who has full responsibility for complying with The

 25-6    Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil

 25-7    Statutes) or Chapter 478, Acts of the 45th Legislature, Regular

 25-8    Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), as

 25-9    applicable.  If the engineer or architect is not a full-time

25-10    employee of the institution, the board shall select the engineer or

25-11    architect on the basis of demonstrated competence and

25-12    qualifications as provided by Section 2254.004, Government Code.

25-13          (d)  A board shall select a construction manager-agent on the

25-14    basis of demonstrated competence and qualifications in the same

25-15    manner as provided for the selection of engineers or architects

25-16    under Section 2254.004, Government Code.

25-17          (e)  A board using the construction manager-agent method

25-18    shall procure, in accordance with applicable law and in any manner

25-19    authorized by this chapter, a general contractor, trade

25-20    contractors, or subcontractors who will serve as the prime

25-21    contractor for their specific portion of the work.

25-22          (f)  The board or the construction manager-agent shall

25-23    procure in accordance with Section 2254.004, Government Code, all

25-24    of the testing of construction materials engineering, the

25-25    inspection services, and the verification testing services

 26-1    necessary for acceptance of the facility by the institution.

 26-2          Sec. 51.782.  CONTRACTS FOR FACILITIES:  CONSTRUCTION

 26-3    MANAGER-AT-RISK.  (a)  An institution may use the construction

 26-4    manager-at-risk method for the construction, rehabilitation,

 26-5    alteration, or repair of a facility.  In using that method and in

 26-6    entering into a contract for the services of a construction

 26-7    manager-at-risk, a board shall follow the procedures prescribed by

 26-8    this section.

 26-9          (b)  A construction manager-at-risk is a sole proprietorship,

26-10    partnership, corporation, or other legal entity that assumes the

26-11    risk for construction, rehabilitation, alteration, or repair of a

26-12    facility at the contracted price as a general contractor and

26-13    provides consultation to the institution regarding construction

26-14    during and after the design of the facility.

26-15          (c)  Before or concurrently with selecting a construction

26-16    manager-at-risk, the board shall select or designate an engineer or

26-17    architect who shall prepare the construction documents for the

26-18    project and who has full responsibility for complying with The

26-19    Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil

26-20    Statutes) or Chapter 478, Acts of the 45th Legislature, Regular

26-21    Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), as

26-22    applicable.  If the engineer or architect is not a full-time

26-23    employee of the institution, the board shall select the engineer or

26-24    architect on the basis of demonstrated competence and

26-25    qualifications as provided by Section 2254.004, Government Code.

 27-1          (d)  The board shall provide or contract for, independently

 27-2    of the construction manager-at-risk, the inspection services, the

 27-3    testing of construction materials engineering, and the verification

 27-4    testing services necessary for acceptance of the facility by the

 27-5    institution.  The board shall select those services for which it

 27-6    contracts in accordance with Section 2254.004, Government Code.

 27-7          (e)  The board shall prepare a request for competitive sealed

 27-8    proposals that includes general information on the project site,

 27-9    project scope, schedule, selection criteria, estimated budget, the

27-10    time and place for receipt of proposals, and other information that

27-11    may assist the board in its selection of a construction

27-12    manager-at-risk.  The board may request that proposals provide the

27-13    construction manager's proposed fee and its price for fulfilling

27-14    the general conditions.  The board shall state the selection

27-15    criteria in the request for proposals.  The selection criteria may

27-16    include the offeror's experience, past performance, safety record,

27-17    proposed personnel and methodology, and other appropriate factors

27-18    that demonstrate the capability of the construction manager.

27-19          (f)  The board shall publish the request for proposals in  a

27-20    manner prescribed by the board.

27-21          (g)  The board may provide for prequalifying offerors before

27-22    proposals are submitted.  Prequalification may not be a conclusive

27-23    determination that an offeror offers the best value to the

27-24    institution,  and a prequalified offeror may be rejected on the

27-25    basis of subsequently discovered information.  A failure to

 28-1    prequalify does not bar a subsequent determination that an offeror

 28-2    offers the best value to the institution with respect to a given

 28-3    proposal.

 28-4          (h)  The board shall receive, publicly open, and read aloud

 28-5    the names of the offerors and the monetary proposals, if any, for

 28-6    each proposal.  Within 45 days after the date of opening the

 28-7    proposals, the board shall evaluate and rank each proposal

 28-8    submitted in relation to the criteria set forth in the request for

 28-9    proposals.

28-10          (i)  The board shall select the offeror that offers the best

28-11    value to the institution based on the published selection criteria

28-12    and on its ranking evaluation.   If the board is unable to reach a

28-13    contract agreement with the selected offeror, the board shall

28-14    terminate further discussions and proceed to the next offeror in

28-15    the order of the selection ranking until a contract agreement is

28-16    reached or all proposals are rejected.

28-17          (j)  A construction manager-at-risk shall publicly advertise

28-18    and solicit either competitive bids or competitive sealed proposals

28-19    from trade contractors or subcontractors for the performance of all

28-20    major elements of the work other than the minor work that may be

28-21    included in the general conditions.  A construction manager-at-risk

28-22    may seek to perform portions of the work itself if the construction

28-23    manager-at-risk submits its bid or proposal for those portions of

28-24    the work in the same manner as all other trade contractors or

28-25    subcontractors and if the board determines that the construction

 29-1    manager-at-risk's bid or proposal provides the best value for the

 29-2    institution.

 29-3          (k)  The construction manager-at-risk and the board or its

 29-4    representative shall receive and open all trade contractor or

 29-5    subcontractor bids or proposals in a manner that does not disclose

 29-6    the contents of the bid or proposal during the selection process.

 29-7    All bids or proposals shall be made public within seven days after

 29-8    the date of final selection.

 29-9          (l)  If the construction manager-at-risk reviews, evaluates,

29-10    and recommends to the board a bid or proposal from a trade

29-11    contractor or subcontractor but the board requires another bid or

29-12    proposal to be accepted, the institution shall compensate the

29-13    construction manager-at-risk by a change in price, time, or

29-14    guaranteed maximum cost for any additional cost and risk that the

29-15    construction manager-at-risk may incur because of the board's

29-16    requirement that another bid or proposal be accepted.

29-17          Sec. 51.783.  SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES

29-18    THROUGH COMPETITIVE SEALED PROPOSALS.  (a)  In selecting a

29-19    contractor for construction, rehabilitation, alteration, or repair

29-20    services for a facility through competitive sealed proposals, a

29-21    board shall follow the procedures prescribed by this section.

29-22          (b)  The board shall select or designate an engineer or

29-23    architect to prepare construction documents for the project.  The

29-24    selected or designated engineer or architect has full

29-25    responsibility for complying with The Texas Engineering Practice

 30-1    Act (Article 3271a, Vernon's Texas Civil Statutes) or Chapter 478,

 30-2    Acts of the 45th Legislature, Regular Session, 1937 (Article 249a,

 30-3    Vernon's Texas Civil Statutes), as applicable.  If the engineer or

 30-4    architect is not a full-time employee of the institution, the board

 30-5    shall select the engineer or architect on the basis of demonstrated

 30-6    competence and qualifications as provided by Section 2254.004,

 30-7    Government Code.

 30-8          (c)  The board shall provide or contract for, independently

 30-9    of the contractor, the inspection services, the testing of

30-10    construction materials engineering, and the verification testing

30-11    services necessary for acceptance of the facility by the

30-12    institution.  The board shall select those services for which it

30-13    contracts in accordance with Section 2254.004, Government Code.

30-14          (d)  The board shall prepare a request for competitive sealed

30-15    proposals that includes construction documents, selection criteria,

30-16    estimated budget, project scope, schedule, and other information

30-17    that contractors may require to respond to the request.  The board

30-18    shall state the selection criteria in the request for proposals.

30-19    The selection criteria may include the offeror's experience, past

30-20    performance, safety record, proposed personnel and methodology, and

30-21    other appropriate factors that demonstrate the capability of the

30-22    contractor.

30-23          (e)  The board shall publish notice of the request for

30-24    proposals in a manner prescribed by the board.

30-25          (f)  The board may provide for prequalifying offerors before

 31-1    proposals are submitted.  Prequalification may not be a conclusive

 31-2    determination that an offeror offers the best value to the

 31-3    institution, and a prequalified offeror may be rejected on the

 31-4    basis of subsequently discovered information.  A failure to

 31-5    prequalify does not bar a subsequent determination that an offeror

 31-6    offers the best value to the institution with respect to a given

 31-7    proposal.

 31-8          (g)  The board shall receive, publicly open, and read aloud

 31-9    the names of the offerors and the monetary proposals, if any,

31-10    stated in each proposal.  Within 45 days after the date of opening

31-11    the proposals the board shall evaluate and rank each proposal

31-12    submitted in relation to the published selection criteria.

31-13          (h)  The board shall select the offeror that offers the best

31-14    value to the institution based on the published selection criteria

31-15    and on its ranking evaluation.  The board and its engineer or

31-16    architect may discuss with the selected offeror options for cost

31-17    reduction.  If the board is unable to reach a contract agreement

31-18    with the selected offeror, the board shall terminate further

31-19    discussions and proceed to the next offeror in the order of the

31-20    selection ranking until a contract agreement is reached or all

31-21    proposals are rejected.

31-22          (i)  In determining best value for the institution, the board

31-23    is not restricted to considering price alone but may consider any

31-24    other factor stated in the selection criteria.

31-25          Sec. 51.784.  JOB ORDER CONTRACTS FOR FACILITIES REPAIR.

 32-1    (a)  An institution may award job order contracts for the minor

 32-2    repair, rehabilitation, or alteration of a facility if the work is

 32-3    of a recurring nature but the delivery times are indefinite and

 32-4    indefinite quantities and orders are awarded substantially on the

 32-5    basis of predescribed and prepriced tasks.

 32-6          (b)  The board shall advertise for, receive, and publicly

 32-7    open competitive sealed proposals for job order contracts based on

 32-8    time and material rates for various types and classifications of

 32-9    work.  The rates under a job order contract shall be in effect for

32-10    at least six months and for not longer than two years.

32-11          (c)  The board may require offerors to submit additional

32-12    information besides rates, including experience, past performance,

32-13    and proposed personnel and methodology.

32-14          (d)  The board may award job order contracts to one or more

32-15    contractors based on price proposals, experience, past performance,

32-16    proposed personnel and methodology, safety record, and other

32-17    appropriate factors.

32-18          (e)  An order for a job or project under the job order

32-19    contract must be signed by the board's representative and the

32-20    contractor.  The order may be a fixed price, lump-sum contract

32-21    based on a statement of work negotiated between the board or its

32-22    representative and the contractor, or the order may be a unit price

32-23    order based on estimated quantities.  The contractor shall provide

32-24    payment and performance bonds, if required by law, based on the

32-25    amount or estimated amount of any order.

 33-1          SECTION 4.  Section 51.907, Education Code, is repealed.

 33-2          SECTION 5.  This Act takes effect September 1, 1997.  The

 33-3    changes in law made by this Act apply only to a contract for which

 33-4    requests for bids, requests for proposals, or requests for

 33-5    qualifications are published or distributed on or after that date.

 33-6          SECTION 6.  The importance of this legislation and the

 33-7    crowded condition of the calendars in both houses create an

 33-8    emergency and an imperative public necessity that the

 33-9    constitutional rule requiring bills to be read on three several

33-10    days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 583 passed the Senate on

         April 8, 1997, by a viva-voce vote; and that the Senate concurred

         in House amendment on May 29, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 583 passed the House, with

         amendment, on May 27, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor