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 * * * * *