SRC-JBJ, SEW S.B. 510 77(R)BILL ANALYSIS
Senate Research CenterS.B. 510
By: Armbrister
Intergovernmental Relations
6/25/2001
Enrolled
DIGEST AND PURPOSE
Under current law, no authority exists for municipalities or counties to
utilize design-build procedures in order to provide flexibility in
constructing needed facilities and possibly save time in design and
construction. S.B. 510 authorizes governmental entities and certain
educational institutions to use design-build procedures.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Sections 252.021(a) and (c), Local Government Code, to
require a municipality, before entering into a contract that requires an
expenditure of more than $15,000 from one or more municipal funds, to
comply with the procedure prescribed by this subchapter and Subchapter C,
rather than this chapter, for competitive sealed bidding or competitive
sealed proposals or with a method described by Subchapter H, Chapter 271.
Authorizes a municipality to use the competitive sealed proposal procedure
for high technology procurements and, in a municipality with a population
of 75,000 or more, for the purchase of insurance.
SECTION 2. Amends Section 252.022, Local Government Code, by adding
Subsection (d) to provide that this chapter does not apply to an
expenditure described by Section 252.021 if the governing body of a
municipality determines that a method described by Subchapter H, Chapter
271 provides a better value for the municipality with respect to that
expenditure than the procedures described in this chapter and the
municipality adopts and uses a method described in that subchapter with
respect to that expenditure.
SECTION 3. Amends Section 252.043, Local Government Code, as follows:
Sec. 252.043. (a) Requires the contract, if the competitive sealed bidding
requirement applies to the contract for goods or services, to be awarded to
the lowest responsible bidder or to the bidder who provides goods or
services at the best value for the municipality.
(b) Authorizes the municipality to consider certain factors in determining
the best value for the municipality.
(c) Requires the municipality, before awarding a contract under this
section, to indicate in the bid specifications and requirements that the
contract may be awarded either to the lowest responsible bidder or to the
bidder who provides goods or services at the best value for the
municipality.
(d) Requires the contract to be awarded to the lowest responsible bidder
if the competitive sealed bidding requirement applies to the contract for
construction of certain items.
(e) Requires the contract, if the competitive sealed bidding requirement
applies to the contract for construction of a facility, as that term is
defined by Section 271.111, to be awarded to the lowest responsible bidder
or awarded under the method described by Subchapter H, Chapter 271.
(f) - (h) Make conforming changes.
(i) Provides that this section does not apply to a contract for
professional services, as that term is defined by Section 2254.002,
Government Code.
SECTION 4. Amends Sections 262.023(a) and (c), Local Government Code, to
require the commissioners court of a county, before the county is
authorized to purchase one or more items under a contract that will require
an expenditure exceeding $25,000, to comply with the competitive bidding or
competitive proposal procedures prescribed by this subchapter or with a
method described by Subchapter H, Chapter 271. Deletes existing text
pertaining to a limited application of competitive bidding and competitive
proposal requirements.
SECTION 5. Amends Chapter 271, Local Government Code, by adding Subchapter
H, as follows:
SUBCHAPTER H. ALTERNATIVE PROJECT DELIVERY METHODS FOR CERTAIN PROJECTS
Sec. 271.111. DEFINITIONS. Defines "architect," "contractor,"
"design-build contract," "design-build firm," "design criteria package,"
"engineer," "facility," "fee," "general conditions," and "governmental
entity."
Sec. 271.112. APPLICABILITY; OTHER LAW. (a) Provides that any provision
in the charter of a home-rule municipality or any regulation of a county or
river authority that requires the use of competitive bidding or competitive
sealed proposals or that prescribes procurement procedures and that is in
conflict with this subchapter controls over this subchapter unless the
governing body of the governmental entity elects to have this subchapter
supersede the charter or regulation.
(b) Provides that the purchasing requirements of Section 361.426
(Governmental Entity Preference for Recycled Products), Health and Safety
Code, apply to purchases by a governmental entity made under this
subchapter.
(c) Provides that, except as provided by this section, to the extent of
any conflict, this subchapter prevails over any other law relating to the
purchasing of goods and services except a law relating to contracting with
historically underutilized businesses.
(d) Requires a municipality or river authority, for a contract entered
into by a municipality or river authority under any of the methods provided
in this subchapter, to publish notice of the time and place the bids or
proposals, or the responses to a request for qualifications, will be
received and opened. Requires the notice to be published in a newspaper of
general circulation in the county in which the municipality's central
administrative office is located, or the county in which the greatest
amount of the river authority's territory is located once each week for at
least two weeks before the deadline for receiving bids, proposals, or
responses. Requires the notice, if there is not a newspaper in that
county, to be published in a newspaper in the county nearest the county
seat of the county in which the municipality's central administrative
office is located or the county in which the greatest amount of the river
authority's territory is located. Provides that in a two-step procurement
process, the time and place the second step bids, proposals, or responses
will be received are not required to be published separately.
(e) Makes conforming changes regarding a contract entered into by a county
under any of the methods provided in this subchapter.
(f) Provides that a contract entered into or an arrangement made in
violation of this subchapter is contrary to public policy and is void.
Authorizes a court to enjoin performance of a contract made in violation of
this subchapter. Authorizes certain specific persons to bring an action
for an injunction. Provides that a party who prevails in an action brought
under this subsection is entitled to reasonable attorney's fees as approved
by the court.
Sec. 271.113. PROCUREMENT PROCEDURES. (a) Authorizes a governmental
entity, in entering into a contract for the construction of a facility, to
use any of a number of stated methods that provides the best value for the
governmental entity.
(b) Authorizes the governmental entity, except as provided by this
subchapter, to consider a number of stated factors in determining to whom
to award a contract.
Sec. 271.114. EVALUATION OF BIDS AND PROPOSALS FOR CONSTRUCTION SERVICES.
(a) Requires the governing body of a governmental entity that is
considering a construction contract using a method specified by Section
252.113(a) other than a competitive bidding, before advertising, to
determine which method provides the best value for the governmental entity.
Authorizes the governing body, as appropriate, to delegates its authority
under this section to a designated representative.
(b) Requires the governmental entity to base its selection among offerors
on criteria authorized to be used under Section 252.113(b). Requires the
governmental entity to publish in the request for bids, proposals, or
qualifications all of the criteria that will be used to evaluate the
offerors and the relative weights given to the criteria.
(c) Requires the governmental entity to document the basis of its
selection and to make the evaluations public not later than the seventh day
after the date the contract is awarded.
Sec. 271.115. SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES THROUGH
COMPETITIVE BIDDING. (a) Authorizes a governmental entity, except to the
extent prohibited by other law and to the extent consistent with this
subchapter, to use competitive bidding to select a contractor to perform
certain services.
(b) Provides that, except as otherwise specifically provided by this
subsection, Subchapter B does not apply to a competitive bidding process
under this section. Provides that Sections 271.026, 271.027(a), and
271.0275 apply to a competitive bidding process under this section.
(c) Requires a governmental entity to award a competitively bid contract
at the bid amount to the bidder offering the best value to the governmental
entity according to the selection criteria that were established by the
municipality. Authorizes the selection criteria to include the factors
listed in Section 271.113(b).
Sec. 271.116. SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES THROUGH
COMPETITIVE SEALED PROPOSALS. (a) Requires a governmental entity to follow
the procedures prescribed by this section in selecting a contractor to
perform certain services for a facility through competitive sealed
proposals.
(b) Requires the governmental entity to select or designate an engineer or
architect to prepare construction documents for the project. Provides that
the selected or designated engineer or architect has full responsibility
for complying with The Texas Engineering Practice Act (Article 3271a,
V.T.C.S.) or Chapter 478 (Regulation of Practice of Architecture), Acts of
the 45th Legislature, Regular Session, 1937 (Article 249a, V.T.C.S.), as
applicable. Requires the governmental entity, if the engineer or architect
is not a full-time employee of the governmental entity, to select the
engineer or architect on the basis of demonstrated competence and
qualifications as provided by Section 2254.004 (Contract for Professional
Services of Architect, Engineer, or Surveyor), Government Code.
(c) Requires the governmental entity to provide or contract for,
independently of the contractor, certain inspection and testing services
necessary for acceptance of the facility by the governmental entity.
Requires the governmental entity 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.
(d) Requires the governmental entity to prepare a request for competitive
sealed proposals that includes certain elements that contractors may
require to respond to the request. Requires the governmental entity to
state in the request for proposals the selection criteria that will be used
in selecting the successful offeror.
(e) Requires the governmental entity 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 proposals. Requires the governmental entity, not
later than the 45th day after the date of opening the proposals, to
evaluate and rank each proposal submitted in relation to the published
selection criteria.
(f) Requires the governmental entity to select the offeror that offers the
best value based on the published selection criteria and on its ranking
evaluation. Requires the governmental entity to first attempt to negotiate
a contract with the selected offeror. Authorizes the governmental entity
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
modification. Requires the governmental entity, if unable to negotiate a
contract with the selected offeror, formally and in writing, to end
negotiations with that offeror and proceed to the next offeror in the order
of the selection ranking until a contract is reached or all proposals are
rejected.
(g) Provides that, in determining best value, the governmental entity is
not restricted to considering price alone, but is authorized to consider
any other factor stated in the criteria.
Sec. 271.117. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGERAGENT. (a)
Authorizes a governmental entity to use the construction manager-agent
method for the construction, rehabilitation, alteration, or repair of a
facility. Requires a governmental entity to follow the procedures
prescribed by this section in using that method and in entering into a
contract for the services of a construction manager-agent.
(b) Sets forth boundaries for the term "construction manager-agent" and
establishes the capacity in which such an entity represents the
governmental entity. Authorizes a governmental entity using the
construction manager-agent method, under the contract between the
governmental entity and the construction manager-agent, to require the
construction manager-agent to provide certain services specified in the
contract. Provides that a construction manager-agent represents the
governmental entity in a fiduciary capacity.
(c) Makes a conforming change regarding a governmental entity being
required, before or concurrently with the selection a construction
manager-agent, to select or designate an engineer or architect who is
required to prepare the construction documents and regarding the basis of
selection. Prohibits the governmental entity'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
conducted in accordance with this subchapter. Provides that this
subsection does not prohibit the governmental entity'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.
(d) Makes a conforming change regarding a governmental entity's selection
of a construction manager-agent, except to provide that notice must be
published as provided by Section 252.112(d).
(e) Requires a governmental entity using the construction manager-agent
method to procure, an accordance with applicable law, a general contractor,
trade contractors, or subcontractors who will serve as the prime contractor
for their specific portion of the work
(f) Makes a conforming change requiring the governmental entity or the
construction manager-agent to procure certain inspection and testing
services necessary for acceptance of the facility by the governmental
entity.
Sec. 252.118. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-ATRISK. (a)
Makes a conforming change regarding a governmental entity's use of the
construction manager-at-risk method.
(b) Sets forth boundaries for the term "construction manager-at-risk."
(c) Makes a conforming change regarding the governmental entity selecting
or designating an engineer or architect before or concurrently with the
selection of a construction manager-at-risk. Makes a conforming change
prohibiting the governmental entity's engineer, architect, or construction
from serving as the construction manager-at-risk except under certain
conditions.
(d) Makes a conforming change requiring the governmental entity to procure,
independently of the construction manager-at-risk, certain inspection and
testing services.
(e) Requires the governmental entity to select the construction
manager-at-risk in either a one-step or two-step process. Requires the
governmental entity to prepare a request for proposals, in the case of a
one-step process, or a request for qualification, in the case of a two-step
process, that includes certain stated information, including the selection
criteria. Authorizes the selection criteria to include certain factors
that demonstrate the capability of the construction manager-at-risk. Sets
forth guidelines regarding both the one-step and the two-step processes.
(f) Makes conforming changes regarding the names of the offerors and the
fees and prices stated in each proposal and the evaluation and ranking of
proposals.
(g) Makes conforming changes regarding the selection of the offeror and the
successful or unsuccessful negotiation of a contract with the offeror.
(h) Requires a construction manager-at-risk to publicly advertise, as
prescribed for a governmental entity by Section 271.025, and receive bids
or proposals from trade contractors or subcontractors for the performance
of all major elements of the work other than the minor work that may be
included in the general conditions. Authorizes a construction
manager-at-risk to seek to perform portions of the work itself if the
construction manager-at-risk submits its bid or proposal for those portions
of the work in the same manner as all other trade contractors or
subcontractors and if the governmental entity determines that the
construction manager-at-risk's bid or proposal provides the best value for
the governmental entity.
(i) Requires the construction manager-at-risk and the governmental entity
or its representative to review all trade contractor or subcontractor bids
or proposals in a manner that does not disclose the contents of the bid or
proposal during the selection process to a person not employed by the
construction manager-at-risk, engineer, architect, or governmental entity.
Requires all bids or proposals to be made public after the award of the
contract or not later than the seventh day after the date of final
selection of bids or proposals, whichever is later.
(j) Requires the governmental entity, if the construction manager-at-risk
reviews, evaluates, and recommends to the governmental entity a bid or
proposal from a trade contractor or subcontractor but the governmental
entity requires another bid or proposal to be accepted, to compensate the
construction manager-at-risk by a change in price, time, or guaranteed
maximum cost for any additional cost and risk that the construction
manager-at-risk may incur because of the governmental entity's requirement
that another bid or proposal be accepted.
(k) Authorizes the construction manager-at-risk, 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, without advertising, to fulfill the contract requirements itself
or select a replacement trade contractor or subcontractor to fulfill the
contract requirements.
(l) Requires the penal sums of the performance and payment bonds delivered
to the governmental entity, if a fixed contract amount or guaranteed
maximum price has not been determined at the time the contract is awarded,
to be in an amount equal to the project budget, as specified in the request
for qualifications. Requires the construction manger 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 governmental entity to ensure
that the construction manager will furnish the required performance and
payment bonds when a guaranteed maximum price is established.
Sec. 252.119. DESIGN-BUILD CONTRACTS FOR FACILITIES. (a) Makes a
conforming change regarding a governmental entity's use of the design-build
method.
(b) Requires the governmental entity to select or designate an engineer or
architect independent of the design-build firm to act as its representative
for the duration of work on the facility. Makes a conforming change
regarding the selection of an engineer or architect who is not a full-time
employee of the governmental entity in accordance with Section 2254.004
(Contract for Professional Services of Architect, Engineer, or Surveyor),
Government Code.
(c) Requires the governmental entity to prepare a request for
qualifications that includes certain information that may assist potential
design-build firms in submitting proposals for the project. Requires the
governmental entity to also prepare a design criteria package that
includes more detailed information on the project. Requires that, if the
design-criteria package requires certain engineering or architectural
services, those services be provided in accordance with the applicable law.
(d) Requires the governmental entity to evaluate statements of
qualifications and select a design-build firm in two phases and sets forth
specific guidelines for the requirements involved in each phase.
(e) Requires that, following selection of a design-build firm under
Subsection (d), the firm's engineers complete the design, submitting all
design elements for review and determination of scope compliance to the
governmental entity or the governmental entity's engineer or architect
before or concurrently with construction.
(f) Makes conforming changes regarding an engineer's and/or architect's
responsibility for compliance with applicable laws.
(g) Makes a conforming change requiring the governmental entity to procure,
independently of the design-build firm, certain inspection and testing
services.
(h) Requires the design-build firm to supply a signed and sealed set of
construction documents for the project to the governmental entity at the
conclusion of construction.
(i) Provides that a payment or performance bond is not required for, and
prohibits such from providing coverage for, the portion of a design-build
contract under this section that includes design services only. Makes a
conforming change regarding the delivery of penal sums of the performance
and payment bonds.
Sec. 271.120. JOB ORDER CONTRACTS FOR FACILITIES CONSTRUCTION OR REPAIR.
(a) Authorizes a governmental entity to award job order contracts for the
minor construction, repair, rehabilitation, or alteration of a facility if
the work is of a recurring nature but the delivery times are indefinite and
indefinite quantities and orders are awarded substantially on the basis of
prescribed and prepriced tasks.
(b) Establishes procedures by which the governmental entity is authorized
to establish contractual unit prices for a job order contract.
(c) Requires the governmental entity to advertise for, receive, and
publicly open sealed proposals for job order contracts.
(d) Authorizes the governmental entity to require offerors to submit
certain types of additional information besides certain stated types.
(e) Authorizes the governmental entity to award job order contracts to one
or more job order contractors in connection with each solicitation of bids
or proposals.
(f) Requires an order for a job or project under the job order contract to
be signed by the governmental entity's representative and the contractor.
Authorizes the order to be a fixed price, lump-sum contract based
substantially on contractual unit pricing applied to estimated quantities
or a unit price based on the quantities and line times delivered.
(g) Requires the contractor to provide payment and performance bonds, if
required by law, based on the amount or estimated amount of any order.
(h) Provides that the base term of a job order contract is for the period
and with any renewal options that the governmental entity sets forth in the
request for proposals. Prohibits the base term, if the governmental entity
fails to advertise that term, from exceeding two years and provides that
the term is not renewable without further advertisement and solicitation of
proposals.
(i) Makes a conforming change requiring that engineering or architectural
services required by a job order contract or an order issued under the
contract be provided in accordance with applicable law.
Sec. 271.121. RIGHT TO WORK. Provides that this section applies to a
governmental entity while the governmental entity is engaged in certain
actions. Prohibits a governmental entity, when engaged in procuring
products or services, awarding a contract, or overseeing procurement or
construction for a public improvement, notwithstanding any other provisions
of this chapter, from considering whether a vendor is a member of or has
another relationship with any organization. Requires the governmental
entity to ensure that its bid specifications and any subsequent contract or
other agreement do not deny or diminish the right of a person to work
because of the person's membership or other relationship status with
respect to any organization.
SECTION 6. Amends Section 292.001, Local Government Code, to authorize the
commissioners court of a county to purchase, construct, or provide by other
means, including a lease or a lease with an option to purchase, for the
housing of county or district offices, county or district courts, justice
of the peace courts, county records or equipment (including voting
machines), or county jail facilities, or for the conducting of other public
business, if the commissioners court determines that the additional
building or rooms are necessary.
SECTION 7. Amends Section 292.022(b), Local Government Code, to authorize
the commissioners court of a county to acquire land for a branch county
office building, to purchase, construct, repair, equip, or improve the
building, and to acquire the building through a lease or lease with an
option to purchase, at a location in a municipality that meets certain
requirements.
SECTION 8. Amends Section 2254.002(1), Government Code, to redefine
"governmental entity."
SECTION 9. Amends Section 44.031(b), Education Code, to authorize the
district, except as provided by this subchapter, to consider certain
factors in determining to whom to award a contract.
SECTION 10. Amends Subdivision (4), Section 44.0315, Education Code, to
redefine "facility."
SECTION 11. Amends Section 44.035(b), Education Code, to delete text
regarding knowledge at the time of publication.
SECTION 12. Amends Sections 44.036(c) and (e), Education Code, as follows:
(c) Requires (rather than authorizes) the district to designate an
engineer or architect independent of the design-build firm to act as its
representative for the duration of the work on the facility. Requires, of
the district's engineer or architect is not a full-time employee of the
district, any engineer or architect designated to be selected on the basis
of demonstrated competence and qualifications in accordance with Section
2254.004 (rather than Chapter 2254A), Government Code.
(e) Makes a conforming change.
SECTION 13. Amends Chapter 44B, Education Code, by adding Section 44.043,
as follows:
Sec. 44.043. RIGHT TO WORK. (a) Provides that this section applies to a
school district while the school district is engaged in certain activities.
(b) Prohibits a school district, notwithstanding any other provision of
this chapter, from considering whether a vendor is a member of or has
another relationship with any organization; and requires a school district,
notwithstanding any other provision of this chapter, to ensure that its bid
specifications and any subsequent contract or other agreement do not deny
or diminish the right of a person to work because of the person's
membership or other relationship status with respect to any organization.
SECTION 14. Amends Sections 51.780(c) and (f), Education Code, as follows:
(c) Authorizes the board to designate an engineer or architect independent
of the design-build firm to act as its representative for the duration of
the work on the facility. Makes a conforming change.
(f) Makes a conforming change.
SECTION 15. (a) Provides that the changes in law made by this Act apply
only to a contract for which requests for bids, requests for proposals, or
requests for qualifications are published or distributed after September 1,
2001.
(b) Provides that the change in law made by this Act to Section 252.043,
Local Government Code, applies only to a contract awarded on or after the
effective date of this Act.
SECTION 16. Effective date: September 1, 2001.