80R7357 PAM-F

By: Corte H.B. No. 3755

A BILL TO BE ENTITLED

AN ACT

relating to the procurement methods of municipal water utilities for the design, 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) "Architect" means an individual registered as an architect under Chapter 1051, Occupations Code.

(2) "Civil works project" means a water supply project, water plant project, wastewater plant project, water or wastewater distribution or conveyance facility project, or desalination project.

(3) "Design-build contract" means a single contract with a design-build firm for the design and construction of a civil works project.

(4) "Design-build firm" means a partnership, corporation, or other legal entity or team that includes an engineer or architect and a builder qualified to engage in building construction in Texas.

(5) "Design criteria package" means a set of documents that provides sufficient information to describe the civil works project and permit a design-build firm to:

(A) prepare a response to a municipal water utility's request for qualifications; and

(B) provide any additional information, including information included in the criteria for selection.

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

(7) "Municipal water utility" means a municipally owned water utility in which the governing board of the utility is the governing body of the municipality or appointed by the governing body of the municipality.

Sec. 271.182. APPLICABILITY OF OTHER LAW. Any provision in the charter of a home-rule municipality or regulation, if any, of a municipal water utility 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 municipality or municipal water utility elects to have this subchapter supersede the charter or regulation.

Sec. 271.183. NOTICE REQUIREMENTS. (a) For a contract entered into by a municipal water utility 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.

(b) The notice must be published in a newspaper of general circulation in the county in which the municipal water utility's central administrative office is located or the county in which the greatest amount of the municipal water utility's territory is located once each week for at least two weeks before the date of the deadline for receiving proposals or responses.

(c) 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 municipal water utility's central administrative office is located or the county in which the greatest amount of the municipal water utility's territory is located.

Sec. 271.184. CONTRACTS FOR CIVIL WORKS PROJECTS: DESIGN-BUILD. (a) A municipal water utility may use the design-build method for the design, 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 municipal water utility and the design-build firm shall follow the procedures provided by this subchapter.

(b) A municipal water utility may not enter into a contract for more than two projects under this subchapter in any fiscal year.

(c) A contract for a project under this subchapter may cover only a single integrated project. A municipal water utility may not enter into a contract for aggregated projects at multiple locations.

(d) A municipal water utility 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 utility can adequately define the project requirements;

(2) the specific time advantages in the delivery of the project;

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

(4) the capability of the utility 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.

(e) The governing board of the municipal water utility shall make a formal finding on the criteria described by Subsection (d) before preparing a request for qualifications under Section 271.187.

Sec. 271.185. USE OF ENGINEER OR ARCHITECT. (a) The municipal water utility shall select or designate an engineer or architect 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) If the engineer or architect is not an employee of the municipal water utility, the municipal water utility shall select the engineer or architect on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

Sec. 271.186. USE OF OTHER PROFESSIONAL SERVICES. (a) The municipal water utility shall provide or contract for, independently of the design-build firm, the following services necessary for the acceptance of the civil works project by the utility:

(1) construction materials testing and inspection services; and

(2) verification testing services.

(b) If testing services under this section are not provided by the municipal water utility, the utility shall select the services for which it contracts under this section in accordance with Section 2254.004, Government Code.

Sec. 271.187. REQUEST FOR QUALIFICATIONS. (a) The municipal water utility shall prepare a request for qualifications that includes at a minimum:

(1) specific information on the civil works project site;

(2) project scope;

(3) project budget;

(4) project schedule;

(5) criteria for selection under Section 271.189 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 municipal water utility shall also prepare a design criteria package as described by Section 271.188.

Sec. 271.188. CONTENTS OF DESIGN CRITERIA PACKAGE. A design criteria package must include, as appropriate:

(1) legal description of the site;

(2) survey information regarding the site;

(3) interior space requirements;

(4) special material requirements;

(5) material quality standards;

(6) conceptual criteria for the project;

(7) special equipment requirements;

(8) budget or cost estimates;

(9) time schedules;

(10) quality assurance and quality control requirements;

(11) site development requirements;

(12) applicable codes and ordinances;

(13) provisions for utilities;

(14) parking requirements; and

(15) any other requirements, as applicable.

Sec. 271.189. EVALUATION OF DESIGN-BUILD FIRMS. (a) The municipal water utility shall publish a request for qualifications. After receiving responses, the municipal water utility 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 municipal water utility 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.

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

Sec. 271.190. SELECTION OF DESIGN-BUILD FIRM. The municipal water utility shall select a design-build firm using one of the following selection options:

(1) qualifications-based selection as provided by Section 271.191; or

(2) a combination of technical and price proposals as provided by Section 271.192.

Sec. 271.191. PROCEDURES FOR QUALIFICATIONS-BASED SELECTION. A municipal water utility that selects a design-build firm using the qualifications-based selection option:

(1) may request that the firms identified under Section 271.189(c) provide on or before the 90th day after the date of the request 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, quantity, or cost-related criteria may not be requested, accepted, or considered;

(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. 271.192. PROCEDURES FOR COMBINATION OF TECHNICAL AND COST PROPOSALS. (a) A municipal water utility that selects a design-build firm using a combination of technical and cost proposals shall request proposals from firms identified under Section 271.189(c). A firm must submit a proposal on or before the 90th day after the date the municipal water utility makes the request for the proposals from the selected firms. The request for proposals must include:

(1) a design criteria package;

(2) except as provided by Subsection (b), a geotechnical report containing information regarding geotechnical site information;

(3) detailed instructions for preparing the technical proposal and the items to be included; 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 municipal water utility, if possible, shall make the project site available to each offeror described by Subsection (a)(1) to conduct a site investigation, including a geotechnical investigation.

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

(d) Each proposal must include a sealed technical proposal and a separate sealed price proposal.

(e) 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 municipal water utility.

(f) The municipal water utility shall first open, evaluate, and score each responsive technical proposal submitted on the basis of the criteria described in the request for proposals. The municipal water utility may reject as nonresponsive any firm that makes a significant change to the composition of its firm as initially submitted. The municipal water utility shall subsequently open, evaluate, and score the price proposals from firms that submitted a responsive technical proposal. The municipal water utility shall select the design-build firm in accordance with the formula provided in the request for proposal under Subsection (a)(4).

Sec. 271.193. NEGOTIATION. After selecting the highest ranked design-build firm under Section 271.191 or 271.192, the municipal water utility shall first attempt to negotiate a contract with the selected firm. If the municipal water utility is unable to negotiate a satisfactory contract with the selected firm, the utility 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. 271.194. ASSUMPTION OF RISKS. The municipal water utility is responsible for all cost increases associated with:

(1) scope changes and modifications requested by the municipal water utility that did not result from an error or omission of the design-build firm;

(2) regulatory permitting for which the municipal water utility is responsible as required by law or as provided by contract;

(3) acquisition of the property; and

(4) delay resulting from natural disasters or other force majeure events that cannot be insured by the offeror.

Sec. 271.195. STIPEND AMOUNT FOR UNSUCCESSFUL OFFERORS. (a) A municipal water utility may not use any unique design element, technique, method, process, or information contained in an unsuccessful proposal unless:

(1) the unsuccessful design-build firm agrees in writing to the municipal water utility's use of the design element, technique, method, process, or information; and

(2) not later than the 30th day after the date a contract is executed under this subchapter, the municipal water utility provides the unsuccessful design-build firm a stipend that is equal to a minimum of one-half of one percent of the final contract price.

(b) If the stipend is paid, the municipal water utility may make use of the unique design element, technique, method, process, or information contained in the proposal. The use by the municipal water utility of any design element, technique, method, process, or information is at the sole risk and discretion of the utility and does not confer liability on the recipient of the stipend under this section.

(c) If a municipal water utility requests and receives proposals and subsequently cancels the request, the utility may not reissue the request or a substantially similar request before the third anniversary of the date the utility issued the original request for qualifications under this subchapter unless the utility provides each offeror who submitted a proposal as requested under Section 271.191 or 271.192 the minimum stipend required by this section. A stipend paid under this subsection does not grant the municipal water utility any right to use any unique design element, technique, method, process, or information contained in an unsuccessful proposal.

Sec. 271.196. COMPLETION OF DESIGN. (a) Following selection of a design-build firm under this subchapter, the firm's engineers shall complete the design, submitting all design elements for review and determination of scope compliance to the municipal water utility before or concurrently with construction.

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

Sec. 271.197. FINAL CONSTRUCTION DOCUMENTS. The design-build firm shall supply to the municipal water utility a signed and sealed set of as-built construction documents for the project at the conclusion of construction.

Sec. 271.198. 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 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 municipal water utility 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 municipal water utility to ensure that the design-build firm will furnish the required performance and payment bonds when a guaranteed maximum price is established.

SECTION 2. This Act takes effect September 1, 2007.