By: Watson S.B. No. 1138
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to design-build contracts and comprehensive development
  agreements of regional mobility authorities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 370.305, Transportation Code, is amended
  to read as follows:
         Sec. 370.305.  COMPREHENSIVE DEVELOPMENT AGREEMENTS.  
  (a)  [An authority may use a comprehensive development agreement
  with a private entity to construct, maintain, repair, operate,
  extend, or expand a transportation project.
         [(b)]  A comprehensive development agreement is an agreement
  with a private entity that, at a minimum, provides for the design
  and construction of a transportation project, that [and] may [also]
  provide for the financing, acquisition, maintenance, or operation
  of a transportation project, and that entitles the private entity
  to:
               (1)  a leasehold interest in the transportation
  project; or
               (2)  the right to operate or retain revenue from the
  operation of the transportation project.
         (b) [(c)]  An authority may negotiate provisions relating to
  professional and consulting services provided in connection with a
  comprehensive development agreement.
         (c) [(d)]  Except as provided by this chapter, the
  [Subsections (e) and (f), the authority to enter into comprehensive
  development agreements under this section expires on August 31,
  2009.
         [(e)     Subsection (d) does not apply to a comprehensive
  development agreement that does not grant a private entity a right
  to finance a toll project or a comprehensive development agreement
  in connection with a project:
               [(1)     that includes one or more managed lane facilities
  to be added to an existing controlled-access highway;
               [(2)     the major portion of which is located in a
  nonattainment or near-nonattainment air quality area as designated
  by the United States Environmental Protection Agency; and
               [(3)     for which the department has issued a request for
  qualifications before the effective date of this subsection.
         [(f)  The] authority to enter into a comprehensive
  development agreement [for a project exempted from Subsection (d)
  or Section 223.210(b)] expires August 31, 2011.
         SECTION 2.  Chapter 370, Transportation Code, is amended by
  adding Subchapter G-1 to read as follows:
  SUBCHAPTER G-1.  DESIGN-BUILD CONTRACTS
         Sec. 370.318.  DEFINITIONS. In this subchapter:
               (1)  "Design-build contractor" means a partnership,
  corporation, or other legal entity or team that includes an
  engineering firm and a construction contractor qualified to engage
  in the construction of transportation projects in this state.
               (2)  "Design-build method" means a project delivery
  method by which an entity contracts with a single entity to provide
  both design and construction services for the construction,
  rehabilitation, alteration, or repair of a facility.
         Sec. 370.319.  SCOPE OF AND LIMITATIONS ON CONTRACTS.
  (a)  Notwithstanding the requirements of Chapter 2254, Government
  Code, an authority may use the design-build method for the design,
  construction, financing, expansion, extension, related capital,
  maintenance, rehabilitation, alteration, or repair of a
  transportation project.
         (b)  A design-build contract under this subchapter may not
  grant to a private entity:
               (1)  a leasehold interest in the transportation
  project; or
               (2)  the right to operate or retain revenue from the
  operation of the transportation project.
         (c)  In using the design-build method and in entering into a
  contract for the services of a design-build contractor, the
  authority and the design-build contractor shall follow the
  procedures and requirements of this subchapter.
         (d)  An authority may enter into not more than two
  design-build contracts for transportation projects in any fiscal
  year.
         Sec. 370.320.  USE OF ENGINEER OR ENGINEERING FIRM. (a)  To
  act as an authority's representative, independent of a design-build
  contractor, for the procurement process and for the duration of the
  work on a transportation project, an authority shall select or
  designate:
               (1)  an engineer;
               (2)  a qualified firm, selected in accordance with
  Section 2254.004, Government Code, that is independent of the
  design-build contractor; or
               (3)  a general engineering consultant that was
  previously selected by an authority and is selected or designated
  in accordance with Section 2254.004, Government Code.
         (b)  The selected or designated engineer or firm has full
  responsibility for complying with Chapter 1001, Occupations Code.
         Sec. 370.321.  OTHER PROFESSIONAL SERVICES.  (a)  An
  authority shall provide or contract for, independently of the
  design-build contractor, the following services as necessary for
  the acceptance of the transportation project by the authority:
               (1)  inspection services;
               (2)  construction materials engineering and testing;
  and
               (3)  verification testing services.
         (b)  An authority shall ensure that the engineering services
  contracted for under this section are selected based on
  demonstrated competence and qualifications.
         (c)  This section does not preclude the design-build
  contractor from providing construction quality assurance and
  quality control services under a design-build contract.
         Sec. 370.322.  REQUEST FOR QUALIFICATIONS. (a)  For any
  transportation project to be delivered through the design-build
  method, an authority must prepare and issue a request for
  qualifications.  A request for qualifications must include:
               (1)  information regarding the proposed project's
  location, scope, and limits;
               (2)  information regarding funding that may be
  available for the project and a description of the financing to be
  requested from the design-build contractor, as applicable;
               (3)  criteria that will be used to evaluate the
  proposals, which must include a proposer's qualifications,
  experience, technical competence, and ability to develop the
  project;
               (4)  the relative weight to be given to the criteria;
  and
               (5)  the deadline by which proposals must be received
  by the authority.
         (b)  An authority shall publish notice advertising the
  issuance of a request for qualifications in the Texas Register and
  on an Internet website maintained by the authority.
         (c)  An authority shall evaluate each qualifications
  statement received in response to a request for qualifications
  based on the criteria identified in the request.  An authority may
  interview responding proposers.  Based on the authority's
  evaluation of qualifications statements and interviews, if any, an
  authority shall qualify or short-list proposers to submit detailed
  proposals.
         (d)  An authority shall qualify or short-list at least two
  but not more than five firms to submit detailed proposals under
  Section 370.323. If an authority receives only one responsive
  proposal to a request for qualifications, the authority shall
  terminate the procurement.
         (e)  An authority may withdraw a request for qualifications
  or request for detailed proposals at any time.
         Sec. 370.323.  REQUEST FOR DETAILED PROPOSALS.  (a)  An
  authority shall issue a request for detailed proposals to proposers
  short-listed under Section 370.322.  A request for detailed
  proposals must include:
               (1)  information on the overall project goals;
               (2)  the authority's cost estimates for the
  design-build portion of the project work;
               (3)  materials specifications;
               (4)  special material requirements;
               (5)  a schematic design approximately 30 percent
  complete;
               (6)  known utilities, provided that an authority is not
  required to undertake an effort to locate utilities;
               (7)  quality assurance and quality control
  requirements;
               (8)  the location of relevant structures;
               (9)  notice of any rules or goals adopted by the
  authority in accordance with Section 370.183 relating to awarding
  contracts to disadvantaged businesses;
               (10)  available geotechnical or other information
  related to the project;
               (11)  the status of any environmental review of the
  project;
               (12)  detailed instructions for preparing the
  technical proposal required under Subsection (c), including a
  description of the form and level of completeness of drawings
  expected;
               (13)  the relative weighting of the technical and cost
  proposals required under Subsection (c) and a formula by which the
  proposals will be evaluated and ranked that allocates at least 70
  percent weight to the cost proposal; and
               (14)  the criteria and weighting for each aspect of the
  technical proposal.
         (b)  A request for detailed proposals shall also include a
  general form of the design-build contract that the authority
  proposes if the terms of the contract may be modified as a result of
  negotiations prior to contract execution.
         (c)  Each response to a request for detailed proposals must
  include a sealed technical proposal and a separate sealed cost
  proposal.
         (d)  The technical proposal must address:
               (1)  the proposer's qualifications and demonstrated
  technical competence, not including any information submitted and
  evaluated under Section 370.322(a)(3);
               (2)  the feasibility of developing the project as
  proposed, including identification of anticipated problems;
               (3)  the proposed solutions to anticipated problems;
               (4)  the ability of the proposer to meet schedules;
               (5)  the conceptual engineering design proposed; and
               (6)  any other information requested by the authority.
         (e)  An authority may provide for the submission of
  alternative technical concepts by a proposer. If an authority
  provides for the submission of alternative technical concepts, the
  authority must prescribe a process for notifying a proposer whether
  the proposer's alternative technical concepts are approved for
  inclusion in a technical proposal.
         (f)  The cost proposal must include:
               (1)  the cost of delivering the project;
               (2)  the estimated number of days required to complete
  the project; and
               (3)  any terms for financing for the project that the
  proposer plans to provide.
         (g)  A response to a request for detailed proposals shall be
  due not later than the 180th day after the final request for
  detailed proposals is issued by the authority.  This subsection
  does not preclude the release by the authority of a draft request
  for detailed proposals for purposes of receiving input from
  short-listed proposers.
         (h)  An authority shall first open, evaluate, and score each
  responsive technical proposal submitted on the basis of the
  criteria described in the request for detailed proposals and assign
  points on the basis of the weighting specified in the request for
  detailed proposals.  The authority may reject as nonresponsive any
  proposer that makes a significant change to the composition of its
  design-build team as initially submitted that was not approved by
  the authority for the purpose of the request for detailed
  proposals.  The authority shall subsequently open, evaluate, and
  score the cost proposals from proposers that submitted a responsive
  technical proposal and assign points on the basis of the weighting
  specified in the request for detailed proposals.  The authority
  shall rank the proposers in accordance with the formula provided in
  the request for detailed proposals.
         Sec. 370.324.  NEGOTIATION.  (a)  After ranking the
  proposers under Section 370.323(h), an authority shall first
  attempt to negotiate a contract with the highest ranked proposer.  
  If an authority has committed to paying a stipend to unsuccessful
  proposers in accordance with Section 370.326, an authority may
  include in the negotiations alternative technical concepts
  proposed by other proposers.
         (b)  If an authority is unable to negotiate a satisfactory
  contract with the highest ranked proposer, the authority shall,
  formally and in writing, end all negotiations with that proposer
  and proceed to negotiate with the next proposer in the order of the
  selection ranking until a contract is reached or negotiations with
  all ranked proposers end.
         Sec. 370.325.  ASSUMPTION OF RISKS. (a)  Unless otherwise
  provided in a final request for detailed proposals or an addendum or
  supplement included in the final request, the authority shall
  assume:
               (1)  all risks and costs associated with:
                     (A)  scope changes and modifications, as
  requested by the authority;
                     (B)  unknown or differing site conditions;
                     (C)  environmental clearance and other regulatory
  permitting for the project; and
                     (D)  natural disasters and other force majeure
  events; and
               (2)  all costs associated with property acquisition,
  excluding costs associated with acquiring a temporary easement or
  work area associated with staging or construction for the project.
         (b)  Notwithstanding Subsection (a), an authority and
  contracting parties may agree that a design-build contractor should
  assume some or all of the risks or costs of a project described in
  Subsection (a) if the agreement is reflected in the final request
  for detailed proposals or an addendum or supplement to the final
  request.
         Sec. 370.326.  STIPEND AMOUNT FOR UNSUCCESSFUL PROPOSERS.
  (a)  In accordance with the request for detailed proposals, an
  authority shall pay an unsuccessful proposer that submits a
  responsive proposal to the request for detailed proposals a stipend
  for work product contained in the proposal.  The stipend must be
  specified in the initial request for detailed proposals in an
  amount of at least two-tenths of one percent of the contract amount,
  but may not exceed the value of the work product contained in the
  proposal to the authority.  If the authority determines that the
  value of the work product is less than the stipend amount, the
  authority must provide the proposer with a detailed explanation of
  the valuation, including the methodology and assumptions used in
  the valuation.  After payment of the stipend, the authority may make
  use of any work product contained in the unsuccessful proposal,
  including the techniques, methods, processes, and information
  contained in the proposal.  The use by the authority of any design
  element contained in an unsuccessful proposal is at the sole risk
  and discretion of the authority and does not confer liability on the
  recipient of the stipend under this subsection.
         (b)  In a request for detailed proposals, an authority may
  provide for the payment of a partial stipend in the event a
  procurement is terminated prior to securing project financing and
  execution of a design-build contract.
         Sec. 370.327.  PERFORMANCE OR PAYMENT BOND.
  (a)  Notwithstanding the requirements of Subchapter B, Chapter
  2253, Government Code, an authority shall require a design-build
  contractor to provide a performance or payment bond or an
  alternative form of security or combination of forms of security.
         (b)  A performance or payment bond or alternative form of
  security shall be in an amount equal to the cost of constructing or
  maintaining the project.
         (c)  A performance or payment bond is not required for the
  portion of a design-build contract under this section that includes
  design services only.
         (d)  In addition to performance and payment bonds, an
  authority may require the following alternative forms of security:
               (1)  a cashier's check drawn on a financial entity
  specified by the authority;
               (2)  a United States bond or note;
               (3)  an irrevocable bank letter of credit drawn from
  any Texas or federally chartered bank; or
               (4)  any other form of security determined suitable by
  the authority.
         SECTION 3.  Section 370.314, Transportation Code, is
  repealed.
         SECTION 4.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect on the 91st day after the last day of the
  legislative session.