80R12031 PAM-F

By: Callegari H.B. No. 1886

Substitute the following for H.B. No. 1886:

By: Callegari C.S.H.B. No. 1886

A BILL TO BE ENTITLED

AN ACT

relating to the procurement methods of certain political subdivisions and certain other entities for the construction, rehabilitation, alteration, or repair of certain projects.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 271.111(7) and (10), Local Government Code, are amended to read as follows:

(7) "Facility" means, unless otherwise specifically provided, buildings the design and construction of which are governed by accepted building codes. The term does not include:

(A) highways, roads, streets, bridges, utilities, water supply projects, water plants, wastewater plants, water and wastewater distribution or conveyance facilities, wharves, docks, airport runways and taxiways, drainage projects, or related types of projects associated with civil engineering construction; or

(B) buildings or structures that are incidental to projects that are primarily civil engineering construction projects.

(10) "Governmental entity" means a municipality, county, hospital district, water district or authority created under Section 59, Article XVI, Texas Constitution, including a river authority[,] or conservation and reclamation district, or a defense base development authority established under Chapter 379B [378 as added by Chapter 1221, Acts of the 76th Legislature, Regular Session, 1999].

SECTION 2. Sections 271.112(a), (d), and (f), Local Government Code, are amended to read as follows:

(a) Any provision in the charter of a home-rule municipality or regulation, if any, of a governmental entity [county, river authority, or defense base development 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.

(d) For a contract entered into by a governmental entity, other than a county, [municipality, river authority, or defense base development authority] under any of the methods provided by this subchapter, the governmental entity [municipality, river authority, or defense base development authority] shall publish notice of the time and place the bids or proposals, or the responses to a request for qualifications, will be received and opened. The notice must be published, in the case of a governmental entity that is a defense base authority or municipality, in a newspaper of general circulation in the county in which the [defense base development] authority's or municipality's central administrative office is located or, in the case of a governmental entity that is a hospital district or a water district or authority, must be published in a newspaper of general circulation in the county in which the greatest amount of the district's or [river] authority's territory is located once each week for at least two weeks before the deadline for receiving bids, proposals, or responses. If there is not a newspaper of general circulation in that county, the notice shall be published in a newspaper of general circulation in the county nearest the county seat of the county in which the defense base development authority's or municipality's central administrative office is located or the county in which the greatest amount of the hospital district's or water district's or [river] authority's territory is located. 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.

(f) A contract entered into or an arrangement made in violation of this subchapter is contrary to public policy and is void. A court may enjoin performance of a contract made in violation of this subchapter. A county attorney, a district attorney, a criminal district attorney, a resident of a county that enters into a contract under this subchapter or of a county in which a municipality, hospital district, or water district or [or a river] authority that enters into a contract under this subchapter is located, or any interested party may bring an action for an injunction. A party who prevails in an action brought under this subsection is entitled to reasonable attorney's fees as approved by the court.

SECTION 3. Section 271.116, Local Government Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) In this section "facility" means an improvement to real property.

SECTION 4. Section 271.118, Local Government Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) In this section "facility" means an improvement to real property.

SECTION 5. Section 271.120(i), Local Government Code, is amended to read as follows:

(i) 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 Chapter 1001, Occupations Code, or the practice of architecture within the meaning of Chapter 1051, Occupations Code, the governmental entity shall select or designate an architect or engineer to prepare the construction documents for the facility [those services shall be provided in accordance with applicable law]. If the architect or engineer is not a full-time employee of the governmental entity, the governmental entity shall select the architect or engineer on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

SECTION 6. Chapter 271, Local Government Code, is amended by adding Subchapter J to read as follows: SUBCHAPTER J. DESIGN-BUILD PROCEDURES FOR CERTAIN CIVIL WORKS PROJECTS

Sec. 271.181. DEFINITIONS. In this subchapter:

(1) "Architect" means an individual registered as an architect under Chapter 1051, Occupations Code.

(2) "Civil works project" means:

(A) roads, streets, bridges, utilities, water supply projects, water plants, wastewater plants, water distribution and wastewater conveyance facilities, airport runways and taxiways, storm drainage and flood control projects, or transit projects;

(B) types of projects or facilities related to those described by Paragraph (A) and associated with civil engineering construction; and

(C) buildings or structures that are incidental to projects or facilities that are described by Paragraphs (A) and (B) and that are primarily civil engineering construction projects.

(3) "Design-build firm" means a partnership, corporation, or other legal entity or team that includes an engineer and a construction contractor qualified to engage in civil works construction in Texas.

(4) "Design criteria package" means a set of documents that:

(A) provides sufficient information to convey the intent, goals, criteria, and objectives of the civil works project; and

(B) permits a design-build firm to:

(i) assess the scope of work and the risk involved; and

(ii) submit a proposal on the project.

(5) "Engineer" means an individual licensed as an engineer under Chapter 1001, Occupations Code.

(6) "Local governmental entity" means a municipality, a county, a water district or authority created under Section 59, Article XVI, Texas Constitution, including a river authority, any other special district or authority authorized by law, or a defense base development authority established under Chapter 379B. The term does not include a municipally owned water or wastewater system with a governing board appointed by the governing body of a municipality with a population of 1.2 million or more.

Sec. 271.182. APPLICABILITY. (a) Before September 1, 2009, this subchapter applies to a local governmental entity with a population of 500,000 or more within its geographic boundaries or service area.

(b) On or after September 1, 2009, and before September 1, 2011, this subchapter applies to a local governmental entity with a population of more than 100,000 within its geographic boundaries or service area.

(c) On or after September 1, 2011, and before September 1, 2013, this subchapter applies to a local governmental entity with a population of more than 25,000 within its geographic boundaries or service area.

(d) On or after September 1, 2013, this subchapter applies to any local governmental entity within its geographic boundaries or service area.

Sec. 271.183. APPLICABILITY OF OTHER LAW. (a) The purchasing requirements of Section 361.426, Health and Safety Code, apply to purchases by a local governmental entity made under this subchapter.

(b) 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.

Sec. 271.184. NOTICE REQUIREMENTS. (a) A local governmental entity shall advertise or publish notice of requests for bids, proposals, or qualifications in any manner prescribed by law.

(b) For a contract entered into by a local governmental entity under any of the methods provided by this subchapter, the entity shall publish notice of the time and place the bid or proposals or the request for qualifications will be received and opened in any manner prescribed by law.

Sec. 271.185. CONTRACTS FOR CIVIL WORKS PROJECTS: DESIGN-BUILD. (a) A local governmental entity may use the design-build method for the construction, rehabilitation, alteration, or repair of a civil works project. In using this method and in entering into a contract for the services of a design-build firm, the contracting local governmental entity and the design-build firm shall follow the procedures provided by this subchapter.

(b) A contract for a project under this subchapter may cover only a single integrated project. A local governmental entity may not enter into a contract for aggregated projects at multiple locations.

(c) A local governmental entity shall use the following criteria as a minimum basis for determining the circumstances under which the design-build method is appropriate for a project:

(1) the extent to which the entity can adequately define the project requirements;

(2) the time constraints for the delivery of the project;

(3) the ability to ensure that a competitive procurement can be held; and

(4) the capability of the entity to manage and oversee the project, including the availability of experienced personnel or outside consultants who are familiar with the design-build method of project delivery.

(d) A local governmental entity shall make a formal finding on the criteria described by Subsection (c) before preparing a request for qualifications under Section 271.189.

Sec. 271.186. LIMITATION ON NUMBER OF PROJECTS. (a) During the first four years that this subchapter applies to a local governmental entity under Section 271.182, the entity may, under this subchapter, enter into contracts for not more than two projects in any fiscal year.

(b) After the period described by Subsection (a):

(1) a local governmental entity with a population of 500,000 or more may, under this subchapter, enter into contracts for not more than four projects in any fiscal year;

(2) a local governmental entity with a population of 100,000 or more but less than 500,000 may, under this subchapter, enter into contracts for not more than three projects in any fiscal year; and

(3) a local governmental entity with a population of less than 100,000 may, under this subchapter, enter into contracts for not more than two projects in any fiscal year.

Sec. 271.187. USE OF ENGINEER. (a) The local governmental entity shall select or designate an engineer who is independent of the design-build firm to act as its representative for the procurement process and for the duration of the work on the civil works project. The selected or designated engineer has full responsibility for complying with Chapter 1001, Occupations Code.

(b) If the engineer is not a full-time employee of the local governmental entity, the local governmental entity shall select the engineer on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

Sec. 271.188. USE OF OTHER PROFESSIONAL SERVICES. (a) The local governmental entity shall provide or contract for, independently of the design-build firm, the following services as necessary for the acceptance of the civil works project by the entity:

(1) inspection services;

(2) construction materials engineering and testing; and

(3) verification testing services.

(b) The local governmental entity shall select the services for which it contracts under this section in accordance with Section 2254.004, Government Code.

Sec. 271.189. REQUEST FOR QUALIFICATIONS. (a) The local governmental entity shall prepare a request for qualifications that includes:

(1) information on the civil works project site;

(2) project scope;

(3) project budget;

(4) project schedule;

(5) criteria for selection under Section 271.191 and the weighting of the criteria; and

(6) other information that may assist potential design-build firms in submitting proposals for the project.

(b) The local governmental entity shall also prepare a design criteria package as described by Section 271.190.

Sec. 271.190. CONTENTS OF DESIGN CRITERIA PACKAGE. A design criteria package must include, as appropriate:

(1) budget or cost estimates;

(2) information on the site;

(3) performance criteria;

(4) special material requirements;

(5) initial design calculations;

(6) known utilities;

(7) capacity requirements;

(8) quality assurance and quality control requirements; and

(9) the type, size, and location of structures.

Sec. 271.191. EVALUATION OF DESIGN-BUILD FIRMS. (a) The local governmental entity shall receive proposals and shall evaluate each offeror's experience, technical competence, 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 at this stage.

(b) Each offeror must:

(1) select or designate each engineer that is a member of its team based on demonstrated competence and qualifications, in the manner provided by Section 2254.004, Government Code; and

(2) certify to the local governmental entity that each selection or designation was based on demonstrated competence and qualifications, in the manner provided by Section 2254.004, Government Code.

(c) The local governmental entity shall qualify a maximum of three offerors to submit additional information and, if the entity chooses, to interview for final selection.

Sec. 271.192. SELECTION OF DESIGN-BUILD FIRM. The local governmental entity shall select a design-build firm using one of the following selection options:

(1) qualifications-based selection as provided by Section 271.193; or

(2) a combination of technical and cost proposals as provided by Section 271.194.

Sec. 271.193. PROCEDURES FOR QUALIFICATIONS-BASED SELECTION. A local governmental entity that selects a design-build firm using the qualifications-based selection option:

(1) may request that the firms identified under Section 271.191(c) provide additional information regarding demonstrated competence and qualifications, project approaches, the ability of the firm to meet schedules, or other factors as appropriate, except that price or cost-related criteria may not be utilized;

(2) may not require firms to submit and may not accept or consider conceptual or detailed engineering designs as part of the proposal; and

(3) shall:

(A) rank each proposal submitted on the basis of the criteria set forth in the request for qualifications and the results of any interview; and

(B) select the design-build firm that is most highly qualified on the basis of the published selection criteria and on its ranking evaluations.

Sec. 271.194. PROCEDURES FOR COMBINATION OF TECHNICAL AND COST PROPOSALS. (a) A local governmental entity that selects a design-build firm using a combination of technical and cost proposals shall request proposals from firms identified under Section 271.191(c). A firm must submit a proposal not later than the 180th day after the date the local governmental entity makes a public request for the proposals from the selected firms. The request for proposals must include:

(1) a design criteria package;

(2) a geotechnical baseline report;

(3) detailed instructions for preparing the technical proposal and the items to be included, including a description of the form and level of completeness of drawings expected; and

(4) the relative weighting of the technical and price proposals and the formula by which the proposals will be evaluated and ranked.

(b) The technical proposal component under this section must be weighted a minimum of 50 percent.

(c) Each proposal must include a sealed technical proposal and a separate sealed cost proposal.

(d) The technical proposal must address:

(1) project approach;

(2) anticipated problems;

(3) proposed solutions to anticipated problems;

(4) ability to meet schedules;

(5) conceptual engineering design; and

(6) other information requested by the local governmental entity.

(e) The local governmental entity shall first open, evaluate, and score each responsive technical proposal submitted on the basis of the criteria described in the request for proposals and assign points on the basis of the weighting specified in the request for proposals. The local governmental entity may reject as nonresponsive any firm that makes a significant change to the composition of its firm as initially submitted. The local governmental entity shall subsequently open, evaluate, and score the cost proposals from firms that submitted a responsive technical proposal and assign points on the basis of the weighting specified in the request for proposals. The local governmental entity shall select the design-build firm in accordance with the formula provided in the request for proposals.

Sec. 271.195. NEGOTIATION. After selecting the highest ranked design-build firm under Section 271.193 or 271.194, the local governmental entity shall first attempt to negotiate a contract with the selected firm. If the local governmental entity is unable to negotiate a satisfactory contract with the selected firm, the entity shall, formally and in writing, end all negotiations with that firm and proceed to negotiate with the next firm in the order of the selection ranking until a contract is reached or negotiations with all ranked firms end.

Sec. 271.196. ASSUMPTION OF RISKS. The local governmental entity shall assume:

(1) all risks and costs associated with:

(A) scope changes and modifications;

(B) unknown or differing site conditions;

(C) regulatory permitting; and

(D) natural disasters and other force majeure events; and

(2) all costs associated with property acquisition.

Sec. 271.197. STIPEND AMOUNT FOR UNSUCCESSFUL OFFERORS. (a) Not later than the 30th day after the date a contract is executed under this subchapter, the local governmental entity shall offer unsuccessful design-build firms that submit a response to the entity's request for additional information under Section 271.194 a stipend for preliminary engineering costs associated with the development of the proposal that is equal to a minimum of one-half of one percent of the preliminary estimate or budgeted cost for the construction of the project. A greater amount may be negotiated with a firm as compensation for the use of intellectual property. If the offer is accepted and paid, the local governmental entity may make use of any work product contained in the proposal, including the techniques, methods, processes, and information contained in the proposal. The use by the local governmental entity of any design element contained in an unsuccessful proposal is at the sole risk and discretion of the entity and does not confer liability on the recipient of the stipend under this subsection.

(b) If a design-build firm rejects the offer of the stipend, the firm retains all rights to the work product and the local governmental entity may not make use of any unique design element, technique, method, or process contained in the unsuccessful proposal that was not also contained in the successful proposal at the time of the original submittal. If the local governmental entity wants to acquire the rights to the work product of an unsuccessful firm and the local governmental entity and that firm are unable to reach an agreement on the value of the work product, the matter may be submitted to binding arbitration.

(c) If a local governmental entity requests and receives proposals and subsequently cancels the request or suspends the selection process for more than 270 days after the date the local governmental entity requests the design-build firms to provide additional information, each offeror who submitted a proposal as requested shall receive the minimum stipend required by this section.

Sec. 271.198. COMPLETION OF DESIGN. (a) Following selection of a design-build firm under this subchapter, the firm's engineers shall submit all design elements for review and determination of scope compliance to the local governmental entity before or concurrently with construction.

(b) An appropriately licensed design professional shall sign and seal construction documents before the documents are released for construction.

Sec. 271.199. FINAL CONSTRUCTION DOCUMENTS. At the conclusion of construction, the design-build firm shall supply to the local governmental entity a record set of construction documents for the project prepared as provided by Section 1001.407, Occupations Code.

Sec. 271.200. PERFORMANCE OR PAYMENT BOND. (a) A payment or performance bond is not required for, and may not provide coverage for, the portion of a design-build contract under this section that includes design services only.

(b) 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 local governmental entity must each be in an amount equal to the construction budget, as specified in the design criteria package.

(c) The design-build firm shall 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 local governmental entity to ensure that the design-build firm will furnish the required performance and payment bonds before the commencement of construction.

SECTION 7. Section 44.041(i), Education Code, is amended to read as follows:

(i) 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 Chapter 1001, Occupations Code, or the practice of architecture within the meaning of Chapter 1051, Occupations Code, the district shall select or designate an architect or engineer to prepare the construction documents for the facility [those services shall be provided in accordance with applicable law]. If the architect or engineer is not a full-time employee of the district, the district shall select the architect or engineer on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

SECTION 8. Section 51.784(i), Education Code, is amended to read as follows:

(i) 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 Chapter 1001, Occupations Code, or the practice of architecture within the meaning of Chapter 1051, Occupations Code, the board shall select or designate an architect or engineer to prepare the construction documents for the facility [those services shall be provided in accordance with applicable law]. If the architect or engineer is not a full-time employee of the institution, the board shall select the architect or engineer on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

SECTION 9. Section 791.011, Government Code, is amended by adding Subsection (h) to read as follows:

(h) An interlocal agreement may not be used to purchase engineering or architectural services unless the services are:

(1) directly related to the design or construction of a specific facility to be jointly owned, used, or financed by the parties to the agreement; and

(2) procured as provided by Section 2254.004.

SECTION 10. Section 60.464(i), Water Code, is amended to read as follows:

(i) 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 Chapter 1001, Occupations Code, or the practice of architecture within the meaning of Chapter 1051, Occupations Code, the district shall select or designate an architect or engineer to prepare the construction documents for the facility [those services shall be provided in accordance with applicable law]. If the architect or engineer is not a full-time employee of the district, the district shall select the architect or engineer on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

SECTION 11. The changes in law made by this Act apply only to a contract for which a request for proposals or a request for qualifications is first published or distributed on or after the effective date of this Act. A contract for which a request for proposals or a request for qualifications is first published or distributed before the effective date of this Act is governed by the law in effect at the time the request is published or distributed, and the former law is continued in effect for that purpose.

SECTION 12. (a) Except as provided by Subsection (b), this Act takes effect September 1, 2007.

(b) This Act takes effect only if H.B. No. 447, Acts of the 80th Legislature, Regular Session, 2007, takes effect. If H.B. No. 447, Acts of the 80th Legislature, Regular Session, 2007, does not take effect, this Act has no effect.