HF 3646

as introduced - 86th Legislature (2009 - 2010) Posted on 03/11/2010 09:38am

A bill for an act
relating to transportation; providing for job order contracts; providing for
construction manager at risk contracts for transportation projects; modifying
provisions relating to design-build contracts; amending Minnesota Statutes 2008,
section 161.3426, subdivision 3, by adding a subdivision; proposing coding for
new law in Minnesota Statutes, chapter 161.

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

Section 1.

new text begin [161.3204] INDEFINITE DELIVERY/INDEFINITE QUANTITY
CONTRACTING.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin The commissioner may undertake construction utilizing
indefinite delivery/indefinite quantity contracting for contracts that do not exceed a
construction cost of $1,000,000.
new text end

new text begin Subd. 2. new text end

new text begin Indefinite delivery/indefinite quantity contracting request for
proposals. new text end

new text begin (a) The commissioner may issue a request for proposals that includes the
criteria that will be used for the project, provided that these criteria do not unduly
restrict competition, do not impose conditions beyond reasonable requirements to ensure
maximum participation of all qualified contractors, and do not relate to the collective
bargaining status of the contractor. The request for proposal must include:
new text end

new text begin (1) the scope of work;
new text end

new text begin (2) copies of the contract documents that the successful proposer will be expected to
sign;
new text end

new text begin (3) the minimum and maximum amounts of the contract;
new text end

new text begin (4) the maximum duration of the contract;
new text end

new text begin (5) a description of the qualifications required and criteria for determining if the
contractor meets the minimum criteria;
new text end

new text begin (6) the requirement that the technical proposal and price proposal be submitted in
separate packages;
new text end

new text begin (7) the date, time, and location of the public opening of the sealed price proposals;
and
new text end

new text begin (8) other information relative to the project.
new text end

new text begin (b) The request for proposals must be publicized as designated under section 161.32,
subdivision 1.
new text end

new text begin Subd. 3. new text end

new text begin Award. new text end

new text begin (a) Before opening the price proposals, the commissioner shall
review the technical proposals and determine if the responder meets the minimum
qualifications in order to be deemed responsive. The commissioner shall not open any
nonresponsive price proposal.
new text end

new text begin (b) Unless all proposals are rejected, the commissioner shall award a master contract
to the responsive and responsible bidder proposing the lowest price. The master contract
must include provisions on executing work orders for specific tasks related to the contract.
new text end

Sec. 2.

new text begin [161.3207] CONSTRUCTION MANAGER AT RISK CONTRACTS;
DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin The terms used in sections 161.3207 to 161.3209 have the
meanings given them in this section.
new text end

new text begin Subd. 2. new text end

new text begin Acceptance. new text end

new text begin "Acceptance" means an action of the commissioner
authorizing the execution of a construction manager at risk contracting contract.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of
transportation.
new text end

new text begin Subd. 4. new text end

new text begin Construction manager at risk. new text end

new text begin "Construction manager at risk" means
a proprietorship, partnership, limited liability partnership, joint venture, corporation,
any type of limited liability company, professional corporation, or any legal entity
selected by the commissioner to act as a construction manager to manage the construction
process, which includes, but is not limited to, responsibility for the price, schedule, and
workmanship of preconstruction services or the construction performed in accordance
with the procedures of section 161.3209, or both.
new text end

new text begin Subd. 5. new text end

new text begin Construction manager at risk contract. new text end

new text begin "Construction manager at risk
contract" means a contract for construction of a project between a construction manager at
risk and the commissioner, which must include terms providing for a guaranteed maximum
price, construction schedule, and workmanship of the construction preformed. The
construction manager at risk contract may include provisions for incremental guaranteed
maximum prices for specific work packages, adding additional work, contingencies,
or other contract clauses that will allow the commissioner to negotiate time and cost
changes to the contract.
new text end

new text begin Subd. 6. new text end

new text begin Guaranteed maximum price. new text end

new text begin "Guaranteed maximum price" means the
maximum amount that a construction manager at risk must be paid pursuant to a contract
to perform a defined scope of work. The guaranteed maximum price can be either an
amount determined at one time for the entire project or the sum of all the incremental
guaranteed maximum prices if the project is designed and constructed in phases.
new text end

new text begin Subd. 7. new text end

new text begin Incremental guaranteed maximum price. new text end

new text begin "Incremental guaranteed
maximum price" means the maximum amount that a construction manager at risk must be
paid pursuant to a contract to perform a defined scope of work on a single work package.
new text end

new text begin Subd. 8. new text end

new text begin Past performance. new text end

new text begin "Past performance" or "experience" does not include
the exercise or assertion of a person's legal rights.
new text end

new text begin Subd. 9. new text end

new text begin Preconstruction services. new text end

new text begin "Preconstruction services" means all
non-construction-related services that a construction manager at risk is allowed to perform
prior to execution of a construction manager at risk contract or work package.
new text end

new text begin Subd. 10. new text end

new text begin Preconstruction services contract. new text end

new text begin "Preconstruction services contract"
means a contract under which a construction manager is paid on the basis of the actual
cost to perform the work specified in the contract plus an amount for overhead and profit
for all preconstruction services.
new text end

new text begin Subd. 11. new text end

new text begin Project. new text end

new text begin "Project" means any project selected by the commissioner as a
construction manager at risk project under section 169.3208.
new text end

new text begin Subd. 12. new text end

new text begin Request for proposals; RFP. new text end

new text begin "Request for proposals" or "RFP" means the
document or publication soliciting proposals for a construction manager at risk contract.
new text end

new text begin Subd. 13. new text end

new text begin Work package. new text end

new text begin "Work package" means the scope of work for a defined
portion of a project. A defined portion includes construction services on any project
aspect, including procuring materials or services.
new text end

Sec. 3.

new text begin [161.3208] CONSTRUCTION MANAGER AT RISK AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Construction manager at risk selection. new text end

new text begin Notwithstanding sections
16C.25, 161.32, and 161.321, or any other law to the contrary, the commissioner may
select a construction manager at risk as provided in section 161.3209, and award a
construction manager at risk contract. The commissioner may not award more than two
construction manager at risk projects that are funded in whole or in part with proceeds
from the sale of state general obligation bonds.
new text end

new text begin Subd. 2. new text end

new text begin Determination. new text end

new text begin Final determination to use a construction manager at risk
contracting procedure may be made only by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Reporting. new text end

new text begin The commissioner shall notify the chairs of the senate and
house of representatives committees with jurisdiction over transportation policy and
transportation finance each time the commissioner decides to use the construction manager
at risk method of procurement and explain why that method was chosen.
new text end

new text begin Subd. 4. new text end

new text begin Cancellation. new text end

new text begin The solicitation of construction manager at risk requests for
qualifications or proposals does not obligate the commissioner to enter into a construction
manager at risk contract. In accordance with the stated criteria and subcriteria for
evaluating qualifications or proposals, the commissioner may accept or reject any or
all responses received as a result of the request. The solicitation of proposals may be
canceled at any time at the commissioner's sole discretion if it is considered to be in the
public's best interest. If the commissioner rejects all responses or cancels the solicitation
for proposals, the commissioner may resolicit a request for proposals using the same
or different requirements.
new text end

Sec. 4.

new text begin [161.3209] CONSTRUCTION MANAGER AT RISK.
new text end

new text begin Subdivision 1. new text end

new text begin Solicitation of proposals. new text end

new text begin If the commissioner determines that a
construction manager at risk method of procurement is appropriate for a project, the
commissioner shall establish a two-phase procedure for awarding the construction
manager at risk contract, as described in subdivisions 2 and 3.
new text end

new text begin Subd. 2. new text end

new text begin Phase 1 - request for proposals. new text end

new text begin (a) The commissioner shall prepare or
have prepared an RFP for each construction manager at risk contract as provided in this
section. The RFP must contain, at a minimum, the following elements:
new text end

new text begin (1) minimum qualifications of the construction manager at risk;
new text end

new text begin (2) procedures for submitting proposals and the criteria for evaluation of
qualifications and the relative weight for each criteria;
new text end

new text begin (3) the form of the contract to be awarded;
new text end

new text begin (4) the scope of intended construction work;
new text end

new text begin (5) a listing of the types of preconstruction services that will be required;
new text end

new text begin (6) an anticipated schedule for commencement and completion of the project;
new text end

new text begin (7) any applicable budget limits for the project;
new text end

new text begin (8) requirements for insurance, statutorily required performance, and payment bonds;
new text end

new text begin (9) requirements that the construction manager at risk provide a letter from a surety
or insurance company stating that the construction manager at risk is capable of obtaining
a performance bond and payment bond covering the estimated contract cost;
new text end

new text begin (10) the method for how construction manager at risk fees for the preconstruction
services contract will be negotiated;
new text end

new text begin (11) a statement that past performance or experience does not include the exercise
or assertion of a person's legal rights; and
new text end

new text begin (12) any other information desired by the commissioner.
new text end

new text begin (b) Before receiving any responses to the RFP:
new text end

new text begin (1) The commissioner shall appoint a technical review committee of at least five
individuals, of which one is a Department of Transportation manager who is also a
licensed professional engineer in Minnesota.
new text end

new text begin (2) The technical review committee shall evaluate the construction managers'
proposals according to criteria and subcriteria published in the RFP and procedures
established by the commissioner. If the commissioner does not receive at least two
proposals from construction managers, the commissioner may:
new text end

new text begin (i) solicit new proposals;
new text end

new text begin (ii) revise the RFP and thereafter solicit new proposals using the revised RFP;
new text end

new text begin (iii) select another allowed procurement method; or
new text end

new text begin (iv) reject all proposals.
new text end

new text begin (3) The technical review committee shall evaluate the responses to the request
for proposals and rank the construction managers at risk using the elements described
in subdivision 2, paragraph (a).
new text end

new text begin (c) Unless all proposals are rejected, the commissioner shall conduct contract
negotiations for a preconstruction services contract with the construction manager at risk
with the highest ranking. If the construction manager at risk with the highest ranking
declines or is unable to reach an agreement, the commissioner may begin contract
negotiations with the next highest ranked construction manager at risk.
new text end

new text begin Subd. 3. new text end

new text begin Phase 2 - construction manager at risk contract. new text end

new text begin (a) Before conducting
any construction-related services, the commissioner shall:
new text end

new text begin (1) conduct an independent cost estimate for the project or each work package; and
new text end

new text begin (2) conduct contract negotiations with the construction manager at risk to develop
a construction manager at risk contract.
new text end

new text begin (b) If the construction manager at risk and the commissioner are unable to negotiate
a guaranteed maximum price contract or an incremental guaranteed maximum price for
a work package, the commissioner may use other contract procurement processes or
may re-advertise the construction manager at risk contract. The construction manager at
risk may not bid on the project or work packages if advertised under section 161.32. If
the project or work packages are advertised under sections 161.3410 to 161.3428, the
construction manager at risk may not join a design-build team before execution of a
design-build contract, or participate in the response to any design-build RFQ or RFP.
new text end

Sec. 5.

Minnesota Statutes 2008, section 161.3426, subdivision 3, is amended to read:

Subd. 3.

Stipulated fee.

The commissioner shall award a stipulated fee not less than
two-tenths of one percent of the department's estimated cost of design and construction
to each new text begin unsuccessful new text end short-listed, responsible proposer who deleted text begin provides a responsive
but unsuccessful proposal deleted text end new text begin obtains the minimum technical proposal score established
by the commissioner in the RFP new text end . If the commissioner does not award a contract, all
short-listed proposers must receive the stipulated fee. If the commissioner cancels the
contract before reviewing the technical proposals, the commissioner shall award each
design-builder on the short list a stipulated fee of not less than two-tenths of one percent
of the commissioner's estimated cost of design and construction. The commissioner shall
pay the stipulated fee to each proposer within 90 days after the award of the contract or
the decision not to award a contract. In consideration for paying the stipulated fee, the
commissioner may use any ideas or information contained in the proposals in connection
with any contract awarded for the project or in connection with a subsequent procurement,
without any obligation to pay any additional compensation to the unsuccessful proposers.
Notwithstanding the other provisions of this subdivision, an unsuccessful short-list
proposer may elect to waive the stipulated fee. If an unsuccessful short-list proposer
elects to waive the stipulated fee, the commissioner may not use ideas and information
contained in that proposer's proposal. Upon the request of the commissioner, a proposer
who waived a stipulated fee may withdraw the waiver, in which case the commissioner
shall pay the stipulated fee to the proposer and thereafter may use ideas and information in
the proposer's proposal.

Sec. 6.

Minnesota Statutes 2008, section 161.3426, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Reissue of RFP. new text end

new text begin If the commissioner rejects all bids or does not execute
the contract, the commissioner may reissue the RFP and allow only short-listed teams
to resubmit proposals. The commissioner shall then pay a reasonable stipulated fee to
each unsuccessful short-listed, responsible proposer who obtains the minimum technical
proposal score established by the commissioner in the reissued RFP.
new text end