88R3801 SRA-F
 
  By: Thompson of Brazoria H.B. No. 1787
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the method used to select engineers and general
  contractors for certain state highway construction projects.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 223, Transportation Code, is amended by
  adding Subchapter G to read as follows:
  SUBCHAPTER G. CONSTRUCTION MANAGER-GENERAL CONTRACTOR METHOD
         Sec. 223.301.  DEFINITION. In this subchapter,
  "construction manager-general contractor method" means a delivery
  method by which the department contracts with an engineer for
  design and construction phase services and contracts separately
  with a construction manager to serve as the general contractor and
  to provide consultation during the design and construction of a
  state highway.
         Sec. 223.302.  USE OF CONSTRUCTION MANAGER-GENERAL
  CONTRACTOR METHOD.  Notwithstanding any other law requiring a
  particular procurement procedure, including Subchapter A of this
  chapter, the department may use the construction manager-general
  contractor method to select a general contractor for a state
  highway project as provided by this subchapter.
         Sec. 223.303.  CONSTRUCTION MANAGER. (a)  For purposes of
  this subchapter, a construction manager may be a sole
  proprietorship, partnership, corporation, or other legal entity.
         (b)  A construction manager serves as the general contractor
  for a state highway project and assumes the risk for the
  construction of the state highway at the contracted price.
         (c)  A construction manager shall provide consultation to
  the department regarding construction of a state highway project
  during and after the design of the project, including consultation
  regarding preconstruction services such as scheduling, pricing,
  phasing, technical innovations, site investigation, and risk
  mitigation.
         (d)  The contracted price may be a guaranteed maximum price
  or converted to a lump sum.
         Sec. 223.304.  USE OF ENGINEER. (a)  On or before the
  selection of a construction manager, the department shall select an
  engineer to prepare the construction documents for the state
  highway project.
         (b)  The engineer selected for a state highway project under
  Section 223.041 may not serve, alone or in combination with another
  person, as the construction manager for that project.
         (c)  Subsection (b) does not prohibit the engineer from
  providing customary construction phase services under the
  engineer's contract with the department in accordance with
  applicable licensing laws.
         Sec. 223.305.  ADOPTION OF CRITERIA AND RULES. (a)  The
  department shall adopt weighted selection criteria and rules for
  the selection process and award of contracts under this subchapter,
  which may include interviews with top-ranked offerors. 
         (b)  The rules adopted under Subsection (a) must address the
  selection process applicable to the award of a contract for
  preconstruction services and for construction management and
  construction services, including the process for contract
  negotiations with the construction manager for construction of the
  project or work packages associated with the project in accordance
  with contract documents.
         Sec. 223.306.  EVALUATION TEAM. (a)  Before preparing a
  request under Section 223.307 for a state highway project, the
  director shall appoint a team of at least three members to assist
  the department in evaluating proposals and qualifications received
  by the department.  The members may be department employees or
  outside consultants.
         (b)  At least one-half, or as near one-half as possible, of
  the team members must be engineers registered in this state. An
  engineer who serves on the team and is not a department employee may
  not otherwise be involved in the project for which the request is
  prepared under Section 223.307.
         (c)  The team must include at least one person who is a senior
  management employee of a general contractor that:
               (1)  is registered as a prequalified general contractor
  under department rules;
               (2)  is not involved in the project for which the
  request is prepared under Section 223.307; and
               (3)  has no other conflict of interest as determined by
  the department. 
         Sec. 223.307.  SELECTION PROCESS. (a)  The department may
  select the construction manager in a one-step or two-step process.
         (b)  The department shall prepare a single request for
  proposals, in the case of a one-step process, and an initial request
  for qualifications followed by a request for proposals and any
  required interviews, in the case of a two-step process. A request
  prepared under this subsection must include:
               (1)  a statement as to whether the selection process is
  a one-step or two-step process;
               (2)  information regarding the project's location,
  scope, and limits;
               (3)  publicly available cost estimates and a budget for
  the project;
               (4)  information regarding funding that may be
  available for the project;
               (5)  the selection criteria adopted under Section
  223.305 and the relative weighted value for each criterion;
               (6)  the time and place for receipt of qualifications
  or proposals, as applicable; and
               (7)  any other information that may assist the
  department in the selection of a construction manager.
         (c)  If a one-step process is used, the department may
  request, as part of the offeror's proposal, the offeror's:
               (1)  proposed billable rates for preconstruction
  services personnel;
               (2)  proposed fee for home office overhead; and
               (3)  profit fee on the negotiated construction price
  for performing construction services.
         (d)  If a two-step process is used, the department may not
  request proposed billable rates, fees, or prices in step one. In
  step two, the department may request that five or fewer offerors,
  selected on the basis of qualifications, experience, technical
  competence, and ability to develop the project, provide additional
  information, including the offeror's:
               (1)  proposed billable rates for preconstruction
  services and general conditions personnel;
               (2)  proposed fee for home office overhead; and 
               (3)  profit fee on the negotiated construction price
  for performing construction services.
         (e)  If a one-step process is used, proposed billable rates
  for general conditions personnel must be negotiated on selection of
  the construction manager.
         Sec. 223.308.  SELECTION OF CONSTRUCTION MANAGER. (a)  The
  department shall:
               (1)  rank the offerors in accordance with the selection
  criteria provided in the request for proposals under Section
  223.307(b)(5); and
               (2)  select the offeror that submits the proposal with
  the highest ranking.
         (b)  The award of a preconstruction services contract under
  Subsection (a) authorizes the construction manager to:
               (1)  provide consultation to the department and project
  engineer; and
               (2)  enter into open and transparent negotiations with
  the department during the design phase of the project to refine the
  project's cost and schedule for the construction management and
  construction services contract.
         (c)  The department shall use the services of an independent
  cost estimator for each work package associated with the project to
  validate the negotiated costs for the construction management and
  construction services contract.  The independent cost estimator
  shall follow procedures outlined in the Federal Highway
  Administration Major Project Program Cost Estimating Guidance, as
  it existed on September 1, 2023, and as adapted by the department.
         (d)  On successful negotiations under Subsection (b)(2), the
  department shall execute a construction management and
  construction services contract with the construction manager for
  either construction of the project or selected work packages
  associated with the project.
         (e)  Negotiations under Subsection (b)(2) shall be
  terminated if the department is unable to reach a price agreement
  with the construction manager.  If negotiations are terminated, the
  department may competitively bid the construction of the project in
  accordance with the department's procedures under Subchapter A.
         (f)  Not later than the seventh day after the date a
  preconstruction services contract is awarded under this section,
  the department shall make public the selection rankings determined
  under Subsection (a).
         Sec. 223.309.  PERFORMANCE OF WORK. (a)  A construction
  manager shall perform a minimum percentage of construction work,
  excluding general conditions work, as required by the department's
  rules regarding standard specifications for highway and bridge
  construction.
         (b)  A construction manager shall publicly advertise for
  bids or proposals and receive bids or proposals from subcontractors
  for the performance of the remaining construction work. 
         Sec. 223.310.  PERFORMANCE OR PAYMENT BOND. The
  construction manager shall deliver any performance and payment
  bonds not later than the 10th day after the date the construction
  manager is awarded a preconstruction services contract under
  Section 223.308 unless the construction manager furnishes a bid
  bond or other financial security acceptable to the department to
  ensure that the construction manager will furnish the required
  performance and payment bonds when a guaranteed maximum price is
  established.
         SECTION 2.  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 September 1, 2023.