1-1     By:  Madla, Shapleigh                                  S.B. No. 298
 1-2           (In the Senate - Filed January 19, 2001; January 22, 2001,
 1-3     read first time and referred to Committee on State Affairs;
 1-4     March 7, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 9, Nays 0; March 7, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 298                 By:  Gallegos
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to contracts for the development of transportation
1-11     projects by the Texas Department of Transportation and the Texas
1-12     Turnpike Authority division of the Texas Department of
1-13     Transportation.
1-14           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-15           SECTION 1.  Chapter 223, Transportation Code, is amended by
1-16     adding Subchapter E to read as follows:
1-17          SUBCHAPTER E.  DESIGN-BUILD CONTRACTS FOR TRANSPORTATION
1-18                                  PROJECTS
1-19           Sec. 223.161.  DEFINITIONS.  In this subchapter:
1-20                 (1)  "Authority" means the Texas Turnpike Authority
1-21     division of the department.
1-22                 (2)  "Design-build contract" means a single contract
1-23     for any combination of the following:
1-24                       (A)  preconstruction services, including
1-25     planning, environmental review, right-of-way services, design
1-26     services, and engineering services;
1-27                       (B)  construction services; and
1-28                       (C)  postconstruction services, including
1-29     operations and maintenance.
1-30                 (3)  "Design-build firm" means a legal entity or team
1-31     that includes:
1-32                       (A)  an engineer or an architect; and
1-33                       (B)  a builder qualified to engage in highway
1-34     construction in this state.
1-35                 (4)  "Design criteria package" means a set of documents
1-36     that provides sufficient information to permit a design-build firm
1-37     to prepare a response to the department's or the authority's
1-38     request for qualifications and request for proposals and includes
1-39     the criteria for selection.  A design criteria package may include,
1-40     as appropriate, the legal description of the site, survey
1-41     information, cost or budget requirements, time schedules, quality
1-42     assurance and quality control requirements, special material
1-43     requirements, applicable ordinances, provisions for utilities, and
1-44     any other applicable requirements.
1-45                 (5)  "Transportation project" means:
1-46                       (A)  an improvement, addition, or extension to
1-47     the state highway system that is undertaken by the department; or
1-48                       (B)  a turnpike project, as defined by Section
1-49     361.001, that is undertaken by the authority.
1-50           Sec. 223.162.  POWER TO ENTER INTO DESIGN-BUILD CONTRACTS.
1-51     Notwithstanding any other law of this state, for a transportation
1-52     project that has an estimated total cost of more than $50 million,
1-53     the department or the authority may:
1-54                 (1)  use the design-build method in this subchapter for
1-55     the development of a transportation project; and
1-56                 (2)  enter into one or more design-build contracts
1-57     under this subchapter for the services of a design-build firm.
1-58           Sec. 223.163.  REQUEST FOR QUALIFICATIONS.  The department or
1-59     the authority shall prepare a request for qualifications that
1-60     includes general information about the transportation project,
1-61     proposed location, project scope, budget, time schedules, selection
1-62     criteria, and other information that may assist design-build firms
1-63     in submitting qualifications for the transportation project.
1-64           Sec. 223.164.  EVALUATION AND SELECTION OF DESIGN-BUILD FIRM.
 2-1     (a)  The department or the authority shall evaluate and select a
 2-2     design-build firm in two phases.
 2-3           (b)  In phase one, the department or the authority shall
 2-4     prepare a request for qualifications and evaluate each responding
 2-5     design-build firm's experience, technical competence, and
 2-6     capability to perform, the past performance of the design-build
 2-7     firm and the members of that firm, and other appropriate factors
 2-8     submitted by that firm, except that cost-related or price-related
 2-9     evaluation factors may not be used.
2-10           (c)  Each design-build firm that responds to the request for
2-11     qualifications must certify to the department or authority that
2-12     each engineer or architect who is a member of the design-build firm
2-13     was selected on the basis of demonstrated competence and
2-14     qualifications in the manner required by Section 2254.004,
2-15     Government Code.
2-16           (d)  The department or the authority may interview the
2-17     design-build firms that respond to the request for qualifications,
2-18     and if the department or authority interviews firms, the department
2-19     or authority must qualify at least two but not more than four firms
2-20     for phase two of the evaluation and selection process.
2-21           (e)  In phase two, the department or the authority shall
2-22     prepare and provide to qualified firms a design criteria package
2-23     and a request for proposals seeking additional information
2-24     regarding demonstrated competence and qualifications,
2-25     considerations of the safety and long-term durability of the
2-26     transportation project, the feasibility of developing the project
2-27     as proposed, the ability of the offeror to meet schedules,
2-28     conceptual engineering plans and designs, costing methodology, and
2-29     any other factor the department or authority considers relevant or
2-30     necessary.
2-31           (f)  The department or the authority may interview one or
2-32     more of the design-build firms responding to the request for
2-33     proposals.
2-34           (g)  The department or the authority shall rank each
2-35     responding design-build firm on the basis of the criteria in the
2-36     request for proposals and select the design-build firm submitting
2-37     the proposal that offers the best value considering price, time for
2-38     project completion, technical evaluation factors, and any other
2-39     factor described in the request for proposals.
2-40           Sec. 223.165.  NEGOTIATIONS WITH SELECTED DESIGN-BUILD FIRM.
2-41     (a)  The department or the authority shall first attempt to
2-42     negotiate a contract with the selected design-build firm.
2-43           (b)  If the department or the authority cannot negotiate a
2-44     satisfactory contract with the selected design-build firm, it
2-45     shall:
2-46                 (1)  formally and in writing end negotiations with that
2-47     firm; and
2-48                 (2)  attempt to negotiate with the next design-build
2-49     firm in the order of the selection ranking until:
2-50                       (A)  a contract is entered into;
2-51                       (B)  negotiations with all ranked firms end; or
2-52                       (C)  the department or the authority determines
2-53     that it is no longer in the best interest of this state to enter
2-54     into a design-build contract for the proposed transportation
2-55     project.
2-56           Sec. 223.166.  COMPLETION OF DESIGN BY SELECTED DESIGN-BUILD
2-57     FIRM.  (a)  The engineers or architects of the design-build firm
2-58     with which the department or authority contracts shall complete the
2-59     design of the transportation project and submit all design elements
2-60     for review and determination of scope compliance to the department
2-61     or the authority before or concurrently with construction of the
2-62     transportation project.
2-63           (b)  An engineer shall have responsibility for compliance
2-64     with the engineering design requirements and all other applicable
2-65     requirements of The Texas Engineering Practice Act (Article 3271a,
2-66     Vernon's Texas Civil Statutes).
2-67           Sec. 223.167.  INSPECTION AND TESTING SERVICES.  (a)  The
2-68     department or the authority shall provide or contract for,
2-69     independently of the design-build firm, any inspection services,
 3-1     testing of construction materials, or verification testing services
 3-2     necessary for acceptance of the transportation project.
 3-3           (b)  Section 2254.004, Government Code, applies to the
 3-4     procurement of services contracted for under Subsection (a).
 3-5           Sec. 223.168.  PERFORMANCE AND PAYMENT BONDS.  (a)  If a
 3-6     fixed contract amount or guaranteed maximum price has not been
 3-7     determined when a design-build contract is awarded, the penal sums
 3-8     of the performance and payment bonds or equivalent security or
 3-9     collateral delivered by the design-build firm must be in an amount
3-10     equal to the transportation project budget, as specified in the
3-11     request for proposals.
3-12           (b)  The design-build firm shall deliver the bonds not later
3-13     than the 10th day after the date the design-build firm executes a
3-14     contract unless the design-build firm furnishes a bid bond or other
3-15     financial security acceptable to the department or authority to
3-16     ensure that the design-build firm will furnish the required
3-17     performance and payment bonds when a guaranteed maximum price is
3-18     established.
3-19           Sec. 223.169.  PAYMENT TO UNSUCCESSFUL DESIGN-BUILD FIRMS.
3-20     (a)  The department or the authority shall pay an unsuccessful
3-21     design-build firm that submits a response to a request for
3-22     proposals the stipulated amount of at least one-half of one percent
3-23     of the final contract price for any costs incurred in preparing
3-24     that proposal.
3-25           (b)  After payment of the stipulated amount, the department
3-26     or the authority may make use of any design contained in the
3-27     proposal, including the technologies, techniques, methods,
3-28     processes, and information contained in the design.  The use by the
3-29     department or the authority of any design element contained in an
3-30     unsuccessful proposal is at the sole risk and discretion of the
3-31     department or the authority and does not confer liability on the
3-32     recipient of the stipulated amount under this section.
3-33           (c)  The methodology for computing the stipulated amount must
3-34     be stated in the request for proposals.
3-35           Sec. 223.170.  DISADVANTAGED AND SMALL BUSINESSES.  The
3-36     department and the authority shall:
3-37                 (1)  ensure that disadvantaged and small businesses
3-38     have an opportunity to participate in the performance of contracts
3-39     under this subchapter; and
3-40                 (2)  use the same procedures that exist for removing
3-41     barriers to participation by disadvantaged and small businesses in
3-42     other department and authority construction and design contracts.
3-43           Sec. 223.171.  PROJECTS FUNDED BY FEDERAL FUNDS.  If a
3-44     transportation project procured under this subchapter is funded in
3-45     whole or in part by federal funds and subject to federal
3-46     procurement laws, rules, regulations, and procedures, the
3-47     requirements of this subchapter shall be applied in a manner
3-48     consistent with the applicable federal procurement laws, rules,
3-49     regulations, and procedures.
3-50           Sec. 223.172.  RULES.  The department and the authority shall
3-51     each adopt rules to implement and administer this subchapter.
3-52           Sec. 223.173.  PILOT PROGRAM; INTERIM STUDY; REPORTS.
3-53     (a)  The use of design-build contracts by the department and the
3-54     authority under this subchapter is a pilot program.
3-55           (b)  Before December 31, 2009, the department and the
3-56     authority may not use design-build contracts under this subchapter
3-57     for more than 24 projects.
3-58           (c)  Money spent by the department or the authority for a
3-59     project under the pilot program is not included in computing the
3-60     amount required to be spent for engineering and design contracts
3-61     under Section 223.041 in any fiscal year.
3-62           (d)  Not later than February 1 of each odd-numbered year, the
3-63     department and the authority shall each submit a report to the
3-64     legislature relating to the use of design-build contracts under
3-65     this subchapter during the preceding two years.
3-66           (e)  Not later than December 1, 2008, the state auditor, the
3-67     department, and the authority shall each submit a final report to
3-68     the legislature relating to the use of design-build contracts under
3-69     this subchapter as part of the review of the department in 2009 by
 4-1     the Sunset Advisory Commission under Chapter 325, Government Code
 4-2     (Texas Sunset Act).
 4-3           (f)  This section expires December 31, 2009.
 4-4           SECTION 2.  This Act takes effect September 1, 2001.
 4-5                                  * * * * *