80R6759 PAM-F

By: Callegari 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. 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) "Local governmental entity" means a municipality, county, or special district or authority.

(2) "Civil works project" means a roadway project, transit project, water supply treatment or transmission project, wastewater treatment or transmission project, desalination project or electric utility project.

(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 building 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.

Sec. 271.182. APPLICABILITY. (a) Before September 1, 2009, this subchapter applies to a municipality or county with a population of 500,000 or more or a special district or authority with a population of 500,000 or more in its service area.

(b) On or after September 1, 2009, and before September 1, 2011, this subchapter applies to a municipality or county with a population of more than 100,000 or a special district or authority with a population of more than 100,000 in its service area.

(c) On or after September 1, 2011, and before September 1, 2013, this subchapter applies to a municipality or county with a population of more than 25,000 or a special district or authority with a population of more than 25,000 in its service area.

(d) On or after September 1, 2013, this subchapter applies to any municipality, county, or special district or authority.

Sec. 271.183. APPLICABILITY OF OTHER LAW. (a) Any provision in the charter of a home-rule municipality or regulation, if any, of a county or special district or authority that requires the use of competitive sealed proposals or prescribes procurement procedures and that is in conflict with this subchapter controls over this subchapter unless the governing body of the local governmental entity elects to have this subchapter supersede the charter or regulation.

(b) The purchasing requirements of Section 361.426, Health and Safety Code, apply to purchases by a local governmental entity made under this subchapter.

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

(b) For a contract entered into by a county under any of the methods provided by this subchapter, the county shall publish notice of the time and place the proposals, or the responses to a request for qualifications, will be received and opened. The notice must be published in a newspaper of general circulation in the county once each week for at least two weeks before the date of the deadline for receiving proposals or responses. If there is not a newspaper of general circulation in the county, the notice shall be:

(1) posted at the courthouse door of the county; and

(2) published in a newspaper of general circulation in the nearest county.

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.

(b) 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 contract for, independently of the design-build firm, the following services necessary for the acceptance of the civil works project by the entity:

(1) inspection services;

(2) testing of construction materials engineering; 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 certify to the local governmental entity that each engineer 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.

(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 price 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 or architectural 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 90th 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 price 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 price 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 271.191(c) a stipend that is equal to a minimum of one-half of one percent of the final contract price for preliminary engineering costs associated with development of the proposal. 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. The design-build firm shall supply to the local governmental entity a signed and sealed set of construction documents for the project at the conclusion of construction.

Sec. 271.200. PERFORMANCE OR PAYMENT BOND. 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. 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 project budget, as specified in the design criteria package. 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 when a guaranteed maximum price is established.

SECTION 2. Sections 2252.902(a) and (b), Government Code, are amended to read as follows:

(a) In this section, "construction contract" means a contract or agreement made and entered into by a [state] governmental entity, engineer, design-build firm, contractor, construction manager, subcontractor, supplier, or equipment lessor, concerning the planning, design, construction, alteration, or repair, of [a state public building or carrying out or completing] any [state] public work.

(b) Except as provided by Subsection (c), a covenant, promise, or agreement contained in a construction contract, or in an agreement collateral to or affecting a construction contract, is void and unenforceable to the extent that [it indemnifies] a person is required to indemnify, hold harmless, or defend another person against all or any portion of loss or liability for damage other than a loss or liability for damage caused or resulting from the negligence of the indemnitor [that:

[(1) is caused by or results from the sole, joint, or concurrent negligence of the indemnitee, its agent, employee, or another independent contractor directly responsible to the indemnitee; and

[(2)arises from:

[(A)personal injury or death;

[(B)property damage;

[(C) a fine, penalty, administrative action, or other action assessed by a governmental entity directly against the indemnitee, its agent or employee, or an independent contractor directly responsible to the indemnitee; or

[(D) any other loss, damage, or expense that arises from an occurrence described by Paragraph (A), (B), or (C)].

SECTION 3. Section 431.101(e), Transportation Code, is amended to read as follows:

(e) A local government corporation is subject to each statute, code, and other law relating to the design and construction of projects, including the procurement of design and construction services, that apply to the local government that created the corporation [Section 394.904(a), Local Government Code, applies to property and improvements owned by a local government corporation. Section 394.904(b) of that code applies to each contract awarded by the local government corporation].

SECTION 4. 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 5. This Act takes effect September 1, 2007.