SRC-ARR C.S.S.B. 669 76(R)BILL ANALYSIS
Senate Research CenterC.S.S.B. 669
76R8260 CAS-FBy: Ratliff
Education
3/4/1999
Committee Report (Substituted)
DIGEST
Currently, Texas law establishes guidelines for school districts to follow
when utilizing design and building contracts for permanent improvements.
Procedures were established in legislation during the 75th Legislature for
school districts to follow when entering into contracts with construction
manager-agents and construction managers-at-risk, as well as entering into
job contracts. The legislation also provided that institutions of higher
education would be able to utilize the design/build process for their
permanent improvements. C.S.S.B. 669 sets forth new procedural guidelines
to clarify and streamline the alternative construction methods used by
school districts and universities.
PURPOSE
As proposed, C.S.S.B. 669 regulates school district purchases and contracts
and construction and repair of improvements by institutions of higher
education.
RULEMAKING AUTHORITY
This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Sections 44.31(a), (d), (f), (g), (h), (i), (j), and (l),
Education Code, to require all school district contracts, except contracts
for the purchase of produce or vehicle fuel, valued at $25,000 or more in
the aggregate for each 12-month period to be made by the method that
provides the best value for the district, including a request for
proposals, for services other than construction services and a job order
contract for the minor construction, repair, rehabilitation, or alteration
of a facility. Authorizes the board of trustees of the district to adopt
rules and procedures for the acquisition of goods or services. Provides
that this section does not apply to contracts, rather than fees received,
for professional services. Provides that in a two-step procurement process,
the time and place where the second-step bids, proposals, or responses will
be received are not required to be published separately. Authorizes the
board of trustees to determine if the delay posed by the procurement,
rather than competitive bidding, process prescribed by this subchapter
would prevent or substantially impair the conduct of classes or other
essential school activities, then contracts for the replacement or repair
of the equipment or facilities be made on terms the board of trustees
determines to be appropriate under the circumstances, if school equipment
or facilities are destroyed or severely damaged. Authorizes a school
district, rather than board of trustees, to acquire computers and
computer-related equipment, including computer software, through the
General Services Commission under contracts entered into in accordance with
Chapter 2157, Government Code. Deletes text regarding architect's fees,
attorney fees, and fees for fiscal agents and text regarding competitive
bidding as otherwise required by this section. Makes conforming and
nonsubstantive changes.
SECTION 2. Amends Chapter 44B, Education Code, by adding Section 44.0311,
as follows:
Sec. 44.0311. DELEGATION. Authorizes the board of trustees of the district,
as appropriate, to delegate its authority under this subchapter regarding
an action authorized or required by this subchapter to be taken by a school
district to a designated person, representative, or committee. Requires the
district to provide notice of the delegation and the limits of the
delegation in the request for bids, proposals, or qualifications, or in an
addendum to the request. Provides that if the district fails to provide
that notice, a ranking, selection, or evaluation of bids, proposals, or
qualifications other than by the board of trustees in an open public
meeting is advisory only. Prohibits the board from delegating the authority
to act regarding an action authorized or required by this subchapter to be
taken by the board of trustees of a school district.
SECTION 3. Amends Section 44.032(f), Education Code, to authorize a court
to enjoin performance of a contract made in violation of this subchapter,
rather than Section 44.031(a) or (b). Authorizes any interested party to
bring an action for an injunction. Entitles a party, rather than citizen,
who prevails in an action brought under this subsection to reasonable
attorney's fees as approved by the court.
SECTION 4. Amends Section 44.035, Education Code, as follows:
Sec. 44.035. New heading: EVALUATION OF BIDS AND PROPOSALS FOR CONSTRUCTION
SERVICES. Requires the board of trustees of a school district that is
considering a construction contract using a method specified by Section
44.031(a), before advertising, to determine which method provides the best
value for the district. Requires the district to base its selection among
offerors on criteria authorized to be used under Section 44.031(b).
Requires the district to publish in the request for bids, proposals, or
qualifications the specific criteria that will be used to evaluate the
offerors and the relative weights, if any, given to the criteria. Requires
the district to document the basis of its selection and to make the
evaluations public on or before awarding the contract. Deletes text
regarding a school district using competitive sealed proposals to select a
contractor for construction services, to select a construction manager to
base its selection or award on a combination of price and other factors
that the district determines. Deletes text authorizing competitive sealed
proposals to discuss proposals with offerors after proposals have been
opened to allow for clarification and changes. Deletes text authorizing the
district to take adequate precautions to ensure that information from
competing proposals is not disclosed to other offerors.
SECTION 5. Amends Section 44.036(a)(3), Education Code, to redefine "design
criteria package."
SECTION 6. Amends Sections 44.036(e), (f) and (j), Education Code, to
require the district to evaluate statements of qualifications, rather than
proposals, and select a design-build firm in two phases. Requires the
district in phase one to prepare a request for qualifications. Requires the
district to qualify a maximum of five offerors to submit additional
informational and, if the district chooses, to interview for final
selection. Requires the district in phase two to evaluate the information
submitted by the offerors on the basis of the selection criteria stated in
the request for qualifications and the results of any interview. Authorizes
the district to request additional information regarding certain items.
Requires the district to rank each proposal submitted on the basis of the
criteria set forth in the request for qualifications. Requires the district
to select the design-build firm that submits the proposal offering the best
value for the district on the basis of the published selection criteria and
on its ranking evaluations. Requires the district to first attempt in good
faith to negotiate with the selected offeror a contract on fair and
reasonable terms. Requires the district to formally and in writing, end
negotiations with that offeror and proceed to negotiate with the next
offeror in the order of the selection ranking until a contract is reached
or negotiations with all ranked offerors end, if the district is unable to
negotiate a satisfactory contract with the selected offeror. Requires the
firm's engineers or architects to complete the design, submitting all
design elements for review and determination of scope compliance to the
district or district's engineer or architect before or concurrently with
construction. Requires the penal sums of the performance and payment bonds
delivered to the district each to be in an amount equal to the project
budget, as specified in the design criteria package, if a fixed contract
amount or guaranteed maximum price has not been determined at the time a
design-build contract is awarded. Requires the design-build firm to deliver
the bonds not later than the 10th day after the date the design-build firm
executes the contract unless the design-build firm furnishes a bid bond or
other financial security acceptable to the district to ensure that the
design-build firm will furnish the required performance and payment bonds
when a guaranteed maximum price is established. Deletes text regarding
technical proposals, implementation, and costing methodologies in response
to a formal request for proposals based on the design criteria package.
SECTION 7. Amends Sections 44.037(b) and (c), Education Code, to authorize
a district using the construction manager-agent method, under contract
between the district and the construction manager agent, to require the
construction manager-agent to provide administrative personnel, equipment
necessary to perform duties under this section, and on-site management and
other services specified in the contract. Prohibits the district's
engineer or architect from serving alone or in combination with another
person, as the construction manager-agent unless the engineer or architect
is hired to serve as the construction manager-agent under a separate or
concurrent procurement process conducted in accordance with this
subchapter. Provides that this subsection does not prohibit the district's
engineer or architect from providing customary construction phase services
under the engineer's or architect's original professional service agreement
in accordance with applicable licensing laws.
SECTION 8. Amends Sections 44.038 and 44.039, Education Code, as follows:
Sec. 44038. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-AT-RISK.
Prohibits the district's engineer, architect, or construction
manager-agent for a project from serving alone or in combination with
another, as the construction manager-at-risk. Requires the district to
select the construction manager-at-risk in either a one-step or two-step
process. Requires the district to prepare a request for proposals, in the
case of a one-step process, or a request for qualifications, in the case of
a two-step process that includes general information on the project site,
project scope, schedule, selection criteria, estimated budget, and the
time and place for receipt of proposals or qualifications, as applicable,
a statement as to whether the selection process is a one-step or two-step
process, and other information that may assist the district in its
selection of a construction manager-at-risk. Requires the district to state
the selection criteria in the request for proposals or qualifications, as
applicable. Authorizes the selection criteria to include the offeror's
experience, past performance, safety record, proposed personnel and
methodology, and other appropriate factors that demonstrate the capability
of the construction manager-at-risk. Authorizes the district to request, as
part of the offeror's proposal, proposed fees and prices for fulfilling the
general conditions, if a one-step process is used. Prohibits the district
from requesting fees or prices in step one, if a two-step process is used.
Authorizes the district in step two to request that five or fewer offerors,
selected solely on the basis of qualifications, provide additional
information, including the construction manager-at-risk's proposed fee and
its price for fulfilling the general conditions. Requires the district to
receive at each step to receive, publicly open, and read aloud the names of
the offerors. Requires the district, at the appropriate step, to also read
aloud the fees and prices stated in each proposal. Requires the district to
select the offeror that submits the proposal that offers the best value for
the district based on the published selection criteria and on its ranking
evaluation. Requires the district to first attempt in good faith to
negotiate with the selected offeror a contract on fair reasonable terms.
Requires the district to formally and in writing, end negotiations with
that offeror, rather than terminate further discussions, and proceed to
negotiate with the next offeror in the order of the selection ranking until
a contract is reached or negotiations with all ranked offerors end.
Requires a construction manager-at-risk to publicly advertise, in
accordance with Section 44.031(g), and receive bids, rather than solicit
either competitive bids or competitive sealed proposals. Requires the
construction manager-at-risk and the district or its representative to
review, rather than receive and open, all trade contractor or subcontractor
bids or proposals in a manner that does not disclose the content of the bid
or proposal during the selection process to a person not employed by the
construction managerat-risk, engineer, architect, or district. Authorizes
the construction manager-at-risk, without advertising, to itself fulfill
the contract requirements or select a replacement trade contractor or
subcontractor to fulfill the contract requirements, if a selected trade
contractor or subcontractor defaults in the performance of its work or
fails to execute a subcontract after being selected in accordance with this
section. Requires penal sums of performance and payment bonds delivered to
the district to be in an amount equal to the project budget, as specified
in the request for qualifications, if a fixed contract amount or guaranteed
maximum price has not been determined at the time the contract is awarded.
Requires the construction manager to deliver the bonds not later than the
10th day after the date the construction manager executes the contract
unless the construction manager furnishes a bid bond or other financial
security acceptable to the district to ensure that the construction manager
will furnish the required performance and payment bonds when a guaranteed
maximum price is established.
Sec. 44.039. SELECTING CONTRACTS FOR CONSTRUCTION SERVICES THROUGH
COMPETITIVE SEALED PROPOSALS. Requires the district to select those
services for which it contracts in accordance with Section 2254.004,
Government Code, and to identify them in the request for proposals.
Requires the district to state in the request for proposals the selection
criteria that will be used in selecting the successful offeror, rather than
in the request for proposals. Requires the district to receive, publicly
open, and read aloud the names of the offerors and, if any are required to
be stated, all prices, stated in each proposal. Requires the district to
first attempt in good faith to negotiate with the selected offeror a
contract on fair and reasonable terms. Authorizes the district and its
engineer or architect to discuss with the selected offeror options for a
scope or time modification and any price change associated with the
modifications, rather than cost reduction. Requires the district to
formally in writing, end negotiations with that offeror, rather than
terminate further discussions, and proceed to the next offeror in the order
of the selection ranking until a contract is reached or all proposals are
rejected, if the district is unable to negotiate a contract with the
selected offeror. Deletes text regarding selection criteria and
prequalifications. Makes conforming changes.
SECTION 9. Amends Section 44.040(b), Education Code, to provide that
Section 271.027(b), Local Government Code, does not apply to a bid or
proposal submitted under this section.
SECTION 10. Amends Section 44.041, Education Code, as follows:
Sec. 44.041. New heading: JOB ORDER CONTRACTS FOR FACILITIES CONSTRUCTION
OR REPAIR. Authorizes a school district to award job order contracts for
the minor construction, repair, rehabilitation, or alteration of a
facility. Authorizes the school district to establish contractual unit
prices for a job order contract by certain procedures. Authorizes the
district to award job order contracts to one or more job order contractors
in connection with each solicitation of bids or proposals. Authorizes the
order to be a fixed price, lump-sum contract based substantially on
contractual unit pricing applied to estimated quantities or to be a unit
price order based on the quantities and line items delivered. Provides that
the base term of a job order contract is for the period and with any
renewal option that the district sets forth in the request for proposals.
Prohibits the base term from exceeding two years and is not renewable
without further advertisement and solicitation of proposals, if the
district fails to advertise that term. Requires those services to be
provided in accordance with applicable law, if a job order contract or an
order issued under the contract requires engineering or architectural
services that constitute the practice of engineering within the meaning of
the Texas Engineering Practice Act or the practice of architecture within
the meaning of Chapter 478, Acts of the 45th Legislature, Regular Session,
1937. Deletes text regarding time and material rates for various types and
classifications of work. Deletes text regarding experienced, past
performance, proposed personnel and methodology, safety record, and other
appropriated factors. Deletes text regarding a statement of work negotiated
between the district or its representative and the contractor.
SECTION 11. Amends Section 51.779, Education Code, as follows:
Sec. 51.779. New heading: EVALUATION OF BIDS AND PROPOSALS FOR CONSTRUCTION
SERVICES. Requires an institution of higher education (institution) that is
considering a construction contract, before advertising, to determine which
method provides the best value for the institution. Requires the
institution to base its selection among the offerors on criteria
established by the institution. Requires the institution to publish in the
request for bids, proposals, or qualifications the specific criteria that
will be used to evaluate the offerors and the relative weights, if any,
given to the criteria. Requires the institution to document the basis of
its selection and to make the evaluation public on or before the award of
the contract. Deletes text regarding competitive sealed proposals.
SECTION 12. Amends Section 51.780(a)(3), Education Code, to redefines
"design criteria package."
SECTION 13. Amends Sections 51.780(f) and (k), Education Code, to require
the board or its representative to evaluate statements of qualifications,
rather than proposals, and select a designbuild firm in two phases.
Requires the board or its representative to prepare a request for
qualifications. Requires the board or its representative to qualify a
maximum of five offerors to submit additional information and, if the board
or its representative chooses, to interview for final selection. Requires
the board or its representative to evaluate the information submitted by
the offerors on the basis of selection criteria stated in the request for
qualifications and the results of any interview. Authorizes the board or
its representative to request additional information regarding demonstrated
competence and qualifications. Prohibits the board or its representative
from requiring offerors to submit detailed engineering or architectural
designs as part of the proposal. Requires the board or its representative
to rank each proposal submitted on the basis of the criteria specified in
the request for qualifications. Requires the board or its representative to
select the design-build firm that submits the proposal offering the best
value for the institution on the basis of the published selection criteria
and on ranking evaluations. Requires the board or its representative to
first attempt in good faith to negotiate with the selected offeror a
contract on fair and reasonable terms. Requires the institution formally
and in writing, to end all negotiations with that offeror and proceed to
negotiate with the next offeror in the order of the selection ranking until
a contract is reached or negotiations with all ranked offerors end, if the
board or its representative is unable to negotiate a satisfactory contract
with the selected offeror. Makes conforming and nonsubstantive changes.
SECTION 14. Amends Sections 51.781(b) and (c), Education Code, to authorize
an institution using the construction manager-agent, under the contract
between the institution and the construction manager-agent, to require the
construction manager-agent to provide administrative personnel, equipment
necessary to perform duties under this section, and on-site management and
other services specified in the contract. Prohibits the institution's
engineer or architect form serving, alone or in combination, as the
construction manager-agent, unless the engineer or architect is hired to
serve as the construction manager-agent under a separate or concurrent
procurement conducted in accordance with this subchapter. Provides that
this subsection does not prohibit the institution's engineer or architect
from providing customary construction phase services under the engineer's
or architect's original professional service agreement in accordance with
applicable licensing laws. Makes conforming changes.
SECTION 15. Amends Sections 51.782-51.784, Education Code, as follows:
Sec. 51.782. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-AT-RISK.
Prohibits the institution's engineer, architect, or construction
manager-agent for a project from serving alone or in combination with
another, as the construction manager-at-risk. Requires the governing body
of an institution (board) to select the construction manager-atrisk in
either a one-step or two-step process. Requires the board to prepare a
request for proposals, in the case of a one-step process, or request for
qualifications, in the case of a twostep process that includes general
information on the project site, project scope, schedule, selection
criteria, estimated budget, and the time and place for receipt of
proposals or qualifications, as applicable, a statement as to whether the
selection process is a one-step or two-step process, and other information
that may assist the board in its selection of a construction
manager-at-risk. Requires the board to state the selection criteria in the
request for proposals or qualifications, as applicable. Authorizes the
selection criteria to include the offeror's experience, past performance,
safety record, proposed personnel and methodology, and other appropriate
factors that demonstrate the capability of the construction manager-atrisk.
Authorizes the board to request, as part of the offeror's proposal,
proposed fees and prices for fulfilling the general conditions, if a
one-step process is used. Prohibits the board from requesting fees or
prices in step one, if a two-step process is used. Authorizes the board in
step two to request that five or fewer offerors, selected solely on the
basis of qualifications, provide additional information, including the
construction manager-at-risk's proposed fee and its price for fulfilling
the general conditions. Requires the board, at each step, to receive
publicly open, and read aloud the names of the offerors. Requires the
board, at the appropriate step, to also read aloud the fees and prices
stated in each proposal. Requires the board to select the offeror that
submits the proposal that offers the best value for the board based on the
published selection criteria and on its ranking evaluation. Requires the
board to first attempt in good faith to negotiate with the selected offeror
a contract on fair and reasonable terms. Requires the board to formally
and in writing, end negotiations with that offeror, rather than terminate
further discussions, and proceed to negotiate with the next offeror in the
order of the selection ranking until a contract is reached or negotiations
with all ranked offerors end. Requires a construction manager-at-risk to
publicly advertise, in accordance with Section 44.031(g), and receive bids,
rather than solicit either competitive bids or competitive sealed
proposals. Requires the construction manager-at-risk and the board or its
representative to review, rather than receive and open, all trade
contractor or subcontractor bids or proposals in a manner that does not
disclose the content of the bid or proposal during the selection process to
a person not employed by the construction managerat-risk, engineer,
architect, or district. Authorizes the construction manager-at-risk,
without advertising, to itself fulfill the contract requirements or select
a replacement trade contractor or subcontractor to fulfill the contract
requirements, if a selected trade contractor or subcontractor defaults in
the performance of its work or fails to execute a subcontract after being
selected in accordance with this section. Requires penal sums of
performance and payment bonds delivered to the district to be in an amount
equal to the project budget, as specified in the request for
qualifications, if a fixed contract amount or guaranteed maximum price has
not been determined at the time the contract is awarded. Requires the
construction manager to deliver the bonds not later than the 10th day after
the date the construction manager executes the contract unless the
construction manager furnishes a bid bond or other financial security
acceptable to the district to ensure that the construction manager will
furnish the required performance and payment bonds when a guaranteed
maximum price is established.
Sec. 51.783. SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES THROUGH
COMPETITIVE SEALED PROPOSALS. Requires the board to select those services
for which it contracts in accordance with Section 2254.004, Government
Code, and to identify them in the request for proposals. Requires the board
to state in the request for proposals the selection criteria that will be
used in selecting the successful offeror, rather than in the request for
proposals. Requires the board to receive, publicly open, and read aloud the
names of the offerors and, if any are required to be stated, all prices,
stated in the proposal. Requires the board to first attempt in good faith
to negotiate with the selected offeror a contract on fair and reasonable
terms. Authorizes the board and its engineer or architect to discuss with
the selected offeror options for a scope or time modification and any price
change associated with the modifications, rather than cost reduction.
Requires the board to formally and in writing, end negotiations with that
offeror, rather than terminate further discussions, and proceed to the next
offeror in the order of the selection ranking until a contract is reached
or all proposals are rejected, if the district is unable to negotiate a
contract with the selected offeror. Deletes text regarding selection
criteria and prequalifications. Makes conforming changes.
Sec. 51.784. New heading: JOB ORDER CONTRACTS FOR FACILITIES CONSTRUCTION
OR REPAIR. Authorizes an institution to award job order contracts for the
minor construction, repair, rehabilitation, or alteration of a facility.
Authorizes the institution to establish contractual unit prices for a job
order contract by certain procedures. Authorizes the board to award job
order contracts to one or more job order contractors in connection with
each solicitation of bids or proposals. Authorizes the order to be a fixed
price, lump-sum contract based substantially on contractual unit pricing
applied to estimated quantities or to be a unit price order based on the
quantities and line items delivered. Provides that the base term of a job
order contract is for the period and with any renewal option that the
institution sets forth in the request for proposals. Prohibits the base
term from exceeding two years and is not renewable without further
advertisement and solicitation of proposals, if the institution fails to
advertise that term. Requires those services to be provided in accordance
with applicable law, if a job order contract or an order issued under the
contract requires engineering or architectural services that constitute the
practice of engineering within the meaning of the Texas Engineering
Practice Act or the practice of architecture within the meaning of
Chapter 478, Acts of the 45th Legislature, Regular Session, 1937. Deletes
text regarding time and material rates for various types and
classifications of work. Deletes text regarding experience, past
performance, proposed personnel and methodology, safety record, and other
appropriated factors. Deletes text regarding a statement of work negotiated
between the district or its representative and the contractor.
SECTION 16. Effective date: September 1, 1999.
Makes application of this Act prospective.
SECTION 17. Emergency clause.
SUMMARY OF COMMITTEE CHANGES
SECTION 7.
Amends Section 44.037(b), Education Code, to authorize a district using the
construction manager-agent method, under contract between the district and
the construction manager agent, to require the construction manager-agent
to provide administrative personnel, equipment necessary to perform duties
under this section, and on-site management and other services specified in
the contract. Provides that this subsection does not prohibit the
district's engineer or architect from providing customary construction
phase services under the engineer's or architect's original professional
service agreement in accordance with applicable licensing laws. Deletes the
provision regarding a construction manager-agent's services that are
services other than the design services customarily performed by an
engineer or architect.
SECTION 8.
Amends Section 44.038, Education Code, to authorize the district to
request, as part of the offeror's proposal, proposed fees and prices for
fulfilling the general conditions, if a one-step process is used.
SECTION 10.
Amends Section 44.041, Education Code, to provide a new heading: JOB ORDER
CONTRACTS FOR FACILITIES CONSTRUCTION OR REPAIR
SECTION 14.
Amends Sections 51.781(b) and (c), Education Code, to authorize an
institution using the construction manager-agent, under the contract
between the institution and the construction manager-agent, to require the
construction manager-agent to provide administrative personnel, equipment
necessary to perform duties under this section, and on-site management and
other services specified in the contract. Provides that this subsection
does not prohibit the institution's engineer or architect from providing
customary construction phase services under the engineer's or architect's
original professional service agreement in accordance with applicable
licensing laws. Deletes a provision regarding a construction
manager-agent's services that are services other than the design services
customarily performed by an engineer or architect.
SECTION 15.
Amends Section 51.782(e), Education Code, to authorize the board to
request, as part of the offeror's proposal, proposed fees and prices for
fulfilling the general conditions, if a one-step process is used.
Amends Section 51.784. to provide a new heading: JOB ORDER CONTRACTS FOR
FACILITIES CONSTRUCTION OR REPAIR.