C.S.H.B. 3028 78(R) BILL ANALYSIS
C.S.H.B. 3028
By: Moreno, Joe E.
Natural Resources
Committee Report (Substituted)
BACKGROUND AND PURPOSE
Currently, Texas ports have the authority to contract using various
methods including a limited form of design-build through Chapter 44 of the
Education Code. The design-build method of construction alleviates many
of the pitfalls inherent in preliminary planning for a project by offering
an insured construction method. Design-build is a method of contracting
in which an owner hires a competent design firm or contractor who in turn
hires an architect, structural engineer, mechanical/electrical engineer,
civil engineer, and any specialty consultants. All design and
construction is handled under one contract. The design team works with
the owner from day one to design a building best suited to the owner's
needs. The result is a project with a realistic budget, little or no
change orders, time savings and effective design from the start. C.S.H.B.
3028 will copy much of Chapter 44 of the Education Code to the Water Code
with some changes. The definition of facility is changed to allow ports
to use alternative contracting methods to construct docks and wharves, and
a provision was added to allow a stipend to losing design-build proposals
to cover their cost of providing additional information, especially
engineering and architectural designs. This provision will also allow
ports to use design features in the losing proposals on the winning
proposals.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution.
ANALYSIS
SECTION 1. Amends Chapter 60, Water Code, by adding Subchapter O, as
follows:
Sec. 60.451. Definitions. Provides definitions for a variety of terms
used in Subchapter O.
(1) "Architect" has the meaning assigned by Section 1051.001,
Occupations Code.
(2) "Contractor" in the context of a contract for the construction of a
facility means a legal entity that assumes the risk for constructing the
facility at the contracted price.
(3) "Construction manager-agent" means a legal entity that provides
consultation to the district regarding construction of a facility.
(4) "Construction manager-at-risk" means a legal entity that assumes the
risk for construction of a facility at the contracted price as a general
contractor and provides consultation to the district regarding
construction during and after the design of the facility.
(5) "Design-build contract" means a single contract with a design-build
firm for the design and construction of a facility.
(6) "Design-build firm" means a legal entity or team that includes an
engineer or architect and builder qualified to engage in building
construction in Texas.
(7) "Design criteria package" means a set of documents prepared by a
district that provides sufficient information to permit a design-build
firm to prepare a response to a district's request for qualifications. The
design criteria package must specify criteria the district considers
necessary to describe the project and may include, as appropriate:
(A) the legal description of the site;
(B) survey information concerning the site;
(C) interior space requirements;
(D) special material requirements;
(E) material quality standards;
(F) conceptual criteria for the project;
(G) special equipment requirements;
(H) cost or budget estimates;
(I) time schedules;
(J) quality assurance and quality control requirements;
(K) site development requirements;
(L) applicable codes and ordinances;
(M) provisions for utilities;
(N) geotechnical baseline reports;
(O) parking requirements; or
(P) any other requirements, as applicable.
(8) "District" means a navigation district or port authority created or
operating under Section 52, Article III, or Section 59, Article XVI, Texas
Constitution.
(9) "Engineer" has the meaning assigned by Section 1001.002, Occupations
Code.
(10) "Facility" means real property, including buildings, associated,
structures, utilities, docks, wharves, channels, dredge material placement
areas, marine terminal, improvements, railroads on or adjacent to the
marine terminal, and improved or unimproved land. The term also includes
roads or bridges that are incidental to a larger project.
(11) "Fee" in the context of a contract for the construction of a
facility means the payment a construction manager-agent or construction
manager-at-risk receives for the manager's overhead and profit in
performing the manager's services.
(12) "General conditions" in the context of a contract for the
construction, of a facility means on-site management, administrative
personnel, insurance, bonds, equipment, utilities, and incidental work,
including minor field labor and materials.
Sec. 60.452. APPLICABILITY OF SUBCHAPTER; OTHER LAW. (a) Provides that the
district may not use this subchapter to contract solely for professional
services. (b) If a district elects to use this subchapter, it prevails
over other laws.
Sec. 60.453. AUTHORITY TO ADOPT RULES. The commission of a port may adopt
rules for using this subchapter.
Sec. 60.454. PURCHASING CONTRACT METHODS. Allows a port commission to
choose the contract method that provides the best value for the port. The
district can choose from:
Design-build contracts
Construction manager-agent contracts or construction manager-at-risk
Competitive sealed proposals
A job order contract
Request for proposals for non-construction services
Competitive sealed bids
A catalog purchase
A interlocal contract agreement
A reverse auction procedure
Sec. 60.455. RIGHT TO REJECT ALL BIDS. A district that requests bids or
proposals under any of the methods provided by this subchapter may reject
any and all bids or proposals submitted.
Sec. 60.456. NOTICE REQUIREMENTS. Prescribes what the district shall do
to publish notice of the time and place the bids, proposals or the
responses to a request for qualifications under this subchapter will be
received and opened.
Sec. 60.457. DELEGATION. The commission may delegate authority under
this subchapter to staff, except actions required by other provisions for
commission decisions.
Sec. 60.458. PURCHASE CONTRACT AWARD CRITERIA. The district may consider:
the purchase price;
the reputation of the vendor and the vendor's goods;
the quality of the vendor's goods;
the extent to which the goods or services meet the district's needs;
the vendor's past relationship with the district;
the impact of the contract to comply with laws and rules relating to
Historically Underutilized Businesses, a district's small business
development program or other contracting program;
the long-term cost of a vendor's goods or services;
any other relevant factor
Sec. 60.459. EVALUATION OF BIDS AND PROPOSALS FOR CONSTRUCTION SERVICES.
(a) the commission must decide what method of contracting will provide the
best value for the district for advertising the bid, proposal or request
for qualifications.
(b) The district shall base its decision on an award criteria.
(c) The district will document the basis of the selection.
Sec. 60.460. DESIGN-BUILD CONTRACTS FOR FACILITIES. (a) A design-build
contract can be used if it the provision of this section are followed.
(b) The district shall designate an engineer or architect, either an
employee or hired under the provision of Section 2254.004, Government
Code, independent of the design-build firm to act as the district's
representative.
(c) The district shall prepare a request for qualifications that includes
general information on the project, a design criteria package, and if
engineering or architectural services are needed to complete the package,
the service shall be provided within applicable law.
(d) The district shall evaluate statements of qualifications and select a
design-build firm in two phases:
(1) The district shall prepare a request for qualifications and evaluate
each offeror's experience, technical competence, and capability to
perform, the past performance of the offeror's team and members of the
team, and other appropriate factors submitted by the team or firm in
response to the request for qualifications, except that cost-related or
price-related evaluation factors are not permitted. Each offeror must
certify to the district that each engineer or architect that is a member
of its team was selected based on demonstrated competence and
qualifications, in the manner provided by Section 2254.004, Government
Code. The district shall qualify a maximum of five offerors to submit
additional information and, if the district chooses, to interview for
final selection.
(2) In phase two, the district shall 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. The district
may request additional information regarding demonstrated competence and
qualifications, considerations of the safety and long-term durability of
the project, the feasibility of implementing the project as proposed, the
ability of the offeror to meet schedules, costing methodology,
construction cost, engineering and architectural design, or other factors
as appropriate. The district shall rank each proposal submitted on the
basis of the criteria set forth in the request for qualifications. The
district shall 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. The district shall
first attempt to negotiate a contract with the selected offeror. If the
district is unable to negotiate a satisfactory contract with the selected
offeror, the district shall, 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.
(e) The winning firm's engineers or architects shall complete the design,
submitting all design elements for review and determination of scope
compliance to the district or the district's engineer or architect before
or concurrently with construction.
(f) The district shall provide, independently of the design-build firm,
the inspection services, the testing of construction materials, and the
verification testing services necessary for acceptance of the facility by
the district. The district shall select those services for which it
contracts in accordance with Section 2254.004, Government Code.
(g) The design-build firm shall supply a signed and sealed set of
construction documents for the project to the district at the conclusion
of construction.
(h) A payment or performance bond is not required for, and may not
provide coverage for, the portion of a design-build contract under this
subchapter that includes design services only. If a fixed contract amount
or guaranteed maximum price has not been determined at the time a
design-build contract is awarded, the penal sums of the performance and
payment bonds delivered to the district must each be in an amount equal to
the project budget, as specified in the design criteria package.
(i) The district shall pay an unsuccessful design-build firm that submits
a response to the district's request for additional information on
engineering or architectural design under Subsection (d)(2) the stipulated
amount of up to one-half of one percent of the final contract price for
any reasonable costs incurred in preparing that proposal. After payment
of the stipulated amount, the district may make use of any design
contained in the proposal, including the technologies, techniques,
methods, processes, and information contained in the design. The use by
the district of any design element contained in an unsuccessful proposal
is at the sole risk and discretion of the district and does not confer
liability on the recipient of the stipulated amount under this section.
The methodology for computing the stipulated amount must be stated in the
request for additional information under (d)(2) of this section.
(j) The district may use a design-build firm to assist the district in
obtaining a permit necessary for a facility, but the district is
responsible for obtaining the permit.
Sec. 60.461. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-AGENT. (a)
A district may award a contract to a construction manager-agent for the
construction of a facility provided that the construction manager-agent
and the district follow the procedures prescribed by this section.
(b) A district may, under the contract between the district and the
construction manager-agent, 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.
(c) Before or concurrently with selecting a construction manager-agent,
the district shall select or designate an engineer or architect who shall
prepare the construction documents for the project. If the engineer or
architect is not a full-time employee of the district, the district shall
select the engineer or architect as provided by Section 2254.004,
Government Code.
(d) A district shall select a construction manager-agent on the basis of
demonstrated competence and qualifications in the same manner as provided
for the selection of engineers or architects under Section 2254.004,
Government Code.
(e) A district contracting with a construction manager-agent shall
procure, in accordance with applicable law, and in any manner authorized
by this chapter, a contractor for their specific portion of the work.
(f) The district or the construction manager-agent shall procure in
accordance with Section 2254.004, Government Code, and in any manner
authorized by this chapter, all of the testing of construction materials,
the inspection services, and the verification testing services necessary
for acceptance of the facility by the district.
Sec. 60.462. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-AT-RISK.
(a) A district may award a contract to a construction manager-at-risk for
the construction of a facility provided that the construction
manager-at-risk and the district follow the procedures prescribed by this
section.
(b) Before or concurrently with selecting a construction manager-at-risk,
the district shall select or designate an engineer or architect who shall
prepare the construction documents for the project If the engineer or
architect is not a full-time employee of the district, the district shall
select the engineer or architect in accordance with Section 2254.004,
Government Code.
(c) The district shall provide or contract for, independently of the
construction manager-at-risk, the inspection services, the testing of
construction materials, and the verification testing services necessary
for acceptance of the facility by the district.
(d) The district shall select the construction manager-at-risk in either
a one-step or two-step process. The district shall 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. The district shall state the selection criteria in the
request for proposals or qualifications, as applicable. The selection
criteria may 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. If a
one-step process is used, the district may request, as part of the
offeror's proposal, proposed fees and prices for fulfilling the general
conditions.
(e) If a two-step process is used, the district may not request fees or
prices in step one. In step two, the district may 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.
(f) At each step, the district shall receive, publicly open, and read
aloud the names of the offerors.
(g) The district shall 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. The district shall first attempt
to negotiate a contract with the selected offeror. If the district is
unable to negotiate a satisfactory contract with the selected offeror, the
district shall, 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.
(h) If a fixed contract amount or guaranteed maximum price has not been
determined at the time the contract is awarded, the penal sums of the
performance and payment bonds delivered to the district must each be in an
amount equal to the project budget, as specified in the request for
proposals or qualifications.
Sec. 60.463. SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES THROUGH
COMPETITIVE SEALED PROPOSALS. (a) In selecting a contractor for
construction, rehabilitation, alteration, or repair services for a
facility through competitive sealed proposals, a district shall follow the
procedures prescribed by this section.
(b) The district shall select or designate an engineer or architect to
prepare construction documents for the project. If the engineer or
architect is not a full-time employee of the district, the district shall
select the engineer or architect as provided by Section 2254.004,
Government Code.
(c) The district shall provide or contract for, independently of the
contractor, the inspection services, the testing of construction
materials, and the verification testing services necessary for acceptance
of the facility by the district.
(d) The district shall prepare a request for competitive sealed proposals
that includes construction documents, selection criteria, estimated
budget, project scope, schedule, and other information that contractors
may require to respond to the request. The district shall state in the
request for proposals the selection criteria that will be used in
selecting the successful offeror.
(e) The district shall 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. Not later than the 45th day after the date of opening
the proposals, the district shall evaluate and rank each proposal
submitted in relation to the published selection criteria.
(f) The district shall select the offeror that offers the best value for
the district based on the published selection criteria and on its ranking
evaluation. The district shall first attempt to negotiate a contract with
the selected offeror. If the district is unable to negotiate a contract
with the selected offeror, the district shall, formally and in writing,
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) In determining best value for the district, the district is not
restricted to considering price alone, but may consider any other factor
stated in the selection criteria.
Sec. 60.464. JOB ORDER CONTRACTS FOR FACILITIES CONSTRUCTION OR REPAIR.
(a) A district may award job order contracts for the 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 predescribed and
prepriced tasks.
(b) The district may establish contractual unit prices for a job order
contract by:
(1) specifying one or more published construction unit price books and
the applicable divisions or line items; or
(2) providing a list of work items and requiring the offerors to bid or
propose one or more coefficients or multipliers to be applied to the price
book or work items as the price proposal.
(c) The district shall advertise for, receive, and publicly open sealed
proposals for job order contracts.
(d) The district may require offerors to submit, in addition to
information on rates, other information, including experience, past
performance, and proposed personnel and methodology.
(e) The district may award job order contracts to one or more job order
contractors in connection with each solicitation of bids or proposals.
(f) An order for a job or project under the job order contract must be
signed by the district's representative and the contractor. The order may
be a fixed price, lump-sum contract based substantially on contractual
unit pricing applied to estimated quantities or may be a unit price order
based on the quantities and line items delivered.
(g) The contractor shall provide payment and performance bonds, if
required by law, based on the amount or estimated amount of any order.
(h) The base term of a job order contract is for the period and with any
renewal options that the district sets forth in the request for proposals.
If the district fails to advertise that term, the base term may not exceed
two years and is not renewable without further advertisement and
solicitation of proposals.
(I) If a job order contract or an order issued under the contract
requires engineering or architectural services that constitute the
practice of engineering those services shall be provided in accordance
with applicable law.
Sec. 60.465. EXPIRATION. This subchapter expires September 1, 2013.
SECTION 2. Section 60.4125, Water Code, is repealed.
SECTION 3. 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 the effective date of
this Act.
SECTION 4. Effective Date.
EFFECTIVE DATE
On passage, or if the Act does not receive the necessary vote, the Act
takes effect on September 1, 2003.
COMPARISON OF ORIGINAL TO SUBSTITUTE
C.S.H.B. 3028 differs from the original by making several minor changes to
clean up or clarifying provisions; however, C.S.H.B. 3028 makes several
substantive changes.
C.S.H.B. 3028 changes the definition of facility to add channels, dredge
disposal areas, utilities, railroads on or adjacent to the terminal and
marine terminal improvements. This is done to ensure roads and bridges
are only constructed as part of a larger project, like a marine terminal
(60.541(10)).
C.S.H.B. 3028 differs so that ports have the right to reject any and all
bids (60.455).
C.S.H.B. 3028 clarifies the bill regarding historically underutilized
businesses to include small business development programs or other
contracting programs of the port, if any. (60.458(6)).
C.S.H.B. 3028 adds a provision to ensure the Texas Engineering Practices
Act would apply to an engineer hired directly by the port as a project
manager (60.460 (c)).
C.S.H.B. 3028 adds a provision to the first phase of the design-build
selection process that requires the design-build firm to certify to the
port that each engineer or architect on the design-build team was selected
on competence and qualifications - not price (60.460(d)(1)).
C.S.H.B. 3028 sets up a stipend system for unsuccessful design-build
proposals. In phase 2 of the design-build selection process, after the
field has been reduced to no more than 5 proposers. The port can request
additional information from each proposer including construction costs,
and engineering and architectural design. An unsuccessful proposer could
spend significant funds in preparing the proposal. To reduce the cost to
the proposer, a stipend of up to one-half of one percent of the value of
awarded contract is allowed in this bill to each losing proposer. The
maximum amount is 2 percent of the contract value for 4 unsuccessful
proposers. In return for paying the stipend, the port is allowed to use
any design feature or cost savings presented in the losing proposals
(60.460(i)).
C.S.H.B. 3028 provides that the district may use a design-build firm to
assist the district in obtaining necessary permits, but the district is
ultimately responsible for obtaining necessary permits for the facility
(60.460(j)).
C.S.H.B. 3028 sets an expiration date of September 1, 2013 for this
subchapter.