1.1                          A bill for an act 
  1.2             relating to public administration; providing for 
  1.3             design-build contracts; amending Minnesota Statutes 
  1.4             1996, sections 16B.31, subdivision 1; and 16B.33, 
  1.5             subdivisions 1, 2, and by adding a subdivision; 
  1.6             proposing coding for new law in Minnesota Statutes, 
  1.7             chapter 16B. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [16B.071] [DESIGN-BUILD CONTRACTS.] 
  1.10     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  1.11  section, the following terms have the meanings given them, 
  1.12  unless the context clearly indicates otherwise. 
  1.13     (b) "Acceptance" means a formal resolution of the 
  1.14  commissioner authorizing the execution of a design-build 
  1.15  contract. 
  1.16     (c) "Board" means the designer selection board as described 
  1.17  in section 16B.33. 
  1.18     (d) "Design-build contract" means a state contract between 
  1.19  an agency and a design-builder to furnish the architectural, 
  1.20  engineering, and related design services as well as the labor, 
  1.21  materials, supplies, equipment, and construction services for a 
  1.22  project. 
  1.23     (e) "Design-builder" means the person that proposes to 
  1.24  design and build a project governed by the procedures of this 
  1.25  section. 
  1.26     (f) "Design criteria professional" means a person who holds 
  2.1   or employs individuals who hold the license or licenses under 
  2.2   chapter 326 that would be required to design the design-build 
  2.3   project and who is employed by or under contract to the 
  2.4   commissioner for the provision of professional architecture and 
  2.5   engineering services in connection with the preparation of the 
  2.6   design criteria package described in subdivision 5. 
  2.7      (g) "Person" means an individual, partnership, joint 
  2.8   venture, corporation, professional corporation, business 
  2.9   association, or any other legal entity. 
  2.10     (h) "Project" means an undertaking to design, construct, 
  2.11  erect, or remodel a building by or for the state or an agency 
  2.12  under the supervision and control of the commissioner pursuant 
  2.13  to section 16B.30. 
  2.14     (i) "Proposal" means an offer by a design-builder to enter 
  2.15  into a design-build contract for a project in response to a 
  2.16  request for proposals, including a phase-one or phase-two 
  2.17  proposal pursuant to subdivisions 7 and 8. 
  2.18     (j) "Request for proposals" means the document or 
  2.19  publication through which the commissioner solicits proposals 
  2.20  for a design-build contract. 
  2.21     Subd. 2.  [AUTHORITY.] (a) Notwithstanding section 16B.07, 
  2.22  the commissioner may solicit and award a design-build contract 
  2.23  on the basis of a qualification-based selection process as 
  2.24  described in subdivision 8 without competitive bids if the 
  2.25  commissioner meets the conditions in paragraph (b). 
  2.26     (b) The commissioner shall, for each project for which the 
  2.27  commissioner intends to use the design-build method, make a 
  2.28  written determination that it is in the best interest of the 
  2.29  public to enter into a design-build contract to complete the 
  2.30  project.  If the commissioner determines to use a design-build 
  2.31  method for a project within the capitol area, as defined in 
  2.32  section 15.50, subdivision 2, the project must comply with 
  2.33  section 15.50, subdivision 2, paragraphs (c) and (d), and must 
  2.34  receive final design approval of the capitol area architectural 
  2.35  and planning board. 
  2.36     (c) The board may not solicit phase-two proposals, as 
  3.1   described in subdivision 7, unless it receives phase-one 
  3.2   proposals, as described in subdivision 7, from at least three 
  3.3   qualified design-builders.  If the board receives fewer than 
  3.4   three phase-one proposals from qualified design-builders, the 
  3.5   commissioner shall either ask the board to revise the request 
  3.6   for proposals and solicit new proposals or request selection of 
  3.7   a designer pursuant to section 16B.33 and proceed with 
  3.8   competitive bidding pursuant to section 16B.07. 
  3.9      Subd. 3.  [LICENSING REQUIREMENTS.] (a) Each design-builder 
  3.10  shall be, employ, or have as a partner, member, coventurer, or 
  3.11  subcontractor, persons duly licensed and registered to provide 
  3.12  the services required to complete the project and do business in 
  3.13  this state. 
  3.14     (b) The design-builder may contract with the commissioner 
  3.15  to provide professional service or construction services that 
  3.16  the design-builder is not itself licensed, registered, or 
  3.17  qualified to perform, so long as the design-builder provides 
  3.18  such services through subcontracts with duly licensed, 
  3.19  registered, or otherwise qualified persons in accordance with 
  3.20  this section. 
  3.21     (c) Nothing in this section authorizing design-build 
  3.22  contracts is intended to limit or eliminate the responsibility 
  3.23  or liability owed by a professional on a design-build project to 
  3.24  the state or other third parties under existing law. 
  3.25     Subd. 4.  [DEVELOPMENT OF DESIGN CRITERIA PACKAGE.] Each 
  3.26  request for proposals shall contain performance criteria 
  3.27  prepared by a design criteria professional who is either an 
  3.28  employee of the commissioner or selected and engaged by the 
  3.29  board in compliance with section 16B.33.  The commissioner, in 
  3.30  consultation with the board, agency, and design criteria 
  3.31  professional, shall determine the scope and level of detail 
  3.32  required for the design criteria package.  If the project is 
  3.33  within the capitol area, as defined in section 15.50, 
  3.34  subdivision 2, the commissioner shall also consult with the 
  3.35  capitol area architectural and planning board to determine the 
  3.36  scope and level of detail required for the design criteria 
  4.1   package.  It must include at least a performance-oriented 
  4.2   description of the budget, program, and site for the project, 
  4.3   containing sufficient information to permit design-build firms 
  4.4   to prepare a response to the request for proposals and must 
  4.5   specify performance-based criteria for the project sufficient to 
  4.6   meet the predesign requirements of chapter 16B. 
  4.7      Subd. 5.  [SOLICITATION OF PROPOSALS.] (a) A request for 
  4.8   proposals shall be prepared for each design-build contract 
  4.9   soliciting design-builders to respond in two phases pursuant to 
  4.10  subdivision 7.  A request for proposals shall contain, at a 
  4.11  minimum, the following elements: 
  4.12     (1) the identity of the agency for which the project will 
  4.13  be built and that will award the design-build contract; 
  4.14     (2) procedures for submitting proposals, the criteria for 
  4.15  evaluation of proposals and their relative weight, and the 
  4.16  procedures for making awards, including a reference to the 
  4.17  requirements of this section and the rules of the commissioner; 
  4.18     (3) the proposed terms and conditions for the design-build 
  4.19  contract; 
  4.20     (4) the design criteria package; 
  4.21     (5) the minimum qualifications the design-builder will be 
  4.22  required to have; 
  4.23     (6) a schedule for planned commencement and completion of 
  4.24  the project; 
  4.25     (7) budget limits for the project; 
  4.26     (8) affirmative action, disadvantaged business, small 
  4.27  business, or set-aside goals or requirements for the 
  4.28  design-build contract, if any; 
  4.29     (9) requirements for performance bonds, payment bonds, and 
  4.30  insurance; and 
  4.31     (10) any other information that the commissioner or board 
  4.32  in its discretion chooses to supply, including without 
  4.33  limitation, surveys, soils reports, drawings or models of 
  4.34  existing structures, environmental studies, photographs, or 
  4.35  references to public records. 
  4.36     (b) Notice of requests for proposals must be advertised in 
  5.1   the same manner in which bids are solicited under section 
  5.2   16B.07, subdivision 3. 
  5.3      Subd. 6.  [EVALUATION OF PROPOSALS.] (a) The board shall 
  5.4   solicit and evaluate proposals and select a design-builder in 
  5.5   two phases. 
  5.6      (b) In phase one, the board shall evaluate each 
  5.7   design-builder's experience, technical competence and capability 
  5.8   to perform, the past performance of the design-builder and its 
  5.9   members, and other appropriate facts submitted by it in response 
  5.10  to the request for proposals.  The board shall not consider 
  5.11  cost-related or price-related evaluation factors.  The board 
  5.12  shall qualify three potential design-builders for phase two of 
  5.13  the selection process. 
  5.14     (c) In phase two, the board shall evaluate design-builders 
  5.15  as described in subdivision 8 for qualification-based selection. 
  5.16     (d) In phase one and phase two, the board may require 
  5.17  clarifications or further information from design-builders to 
  5.18  ensure conformance of proposals with the design criteria package.
  5.19     Subd. 7.  [ACCEPTANCE OF PROPOSALS.] After obtaining and 
  5.20  evaluating proposals from each design-builder according to the 
  5.21  criteria and procedures set forth in the request for proposals, 
  5.22  the board shall select the proposal it considers most 
  5.23  advantageous to the public.  The commissioner has the right to 
  5.24  reject any and all proposals, except for the purpose of evading 
  5.25  the provisions and policies of this section.  The commissioner 
  5.26  may thereafter solicit new proposals using the same or different 
  5.27  performance criteria, budget constraints, or qualifications.  No 
  5.28  proposal or design-build contract may be accepted unless the 
  5.29  board receives at least three qualifying phase-two proposals 
  5.30  unless the board determines that there was otherwise adequate 
  5.31  competition for the contract. 
  5.32     Subd. 8.  [QUALIFICATION-BASED SELECTION.] (a) The 
  5.33  requirements in this subdivision apply to all design-build 
  5.34  contracts to be awarded by qualification-based selection. 
  5.35     (b) The design criteria package for a project to be awarded 
  5.36  by a qualification-based selection process must be in sufficient 
  6.1   detail to allow qualified persons to respond to the request for 
  6.2   proposals with materials that will demonstrate experience and 
  6.3   abilities relevant to the project. 
  6.4      (c) For each proposed project, the board shall evaluate 
  6.5   phase-one proposals consisting of statements of qualifications 
  6.6   and performance data submitted by design-builders regarding the 
  6.7   proposed project. 
  6.8      (d) The board shall solicit phase-two proposals from and 
  6.9   conduct interviews with no fewer than three design-builders 
  6.10  regarding their qualifications, approach to the project, and 
  6.11  ability to furnish the required services.  The board's 
  6.12  requirements for phase-two proposals for the qualification-based 
  6.13  selection process must include written statements of the 
  6.14  design-builder's proposed approach to the design and 
  6.15  construction of the project, may include graphic materials 
  6.16  illustrating the proposed approach to design and construction, 
  6.17  but may not include proposed design solutions or project cost 
  6.18  proposals. 
  6.19     (e) The board shall select in order of preference no fewer 
  6.20  than three design-builders deemed to be the most highly 
  6.21  qualified to perform the required services.  In determining 
  6.22  whether a design-builder is qualified, the board shall consider 
  6.23  such factors as the ability of professional personnel; past 
  6.24  performance; ability to meet time and budget requirements; 
  6.25  location; recent, current, and projected workloads of the 
  6.26  design-builders; and the volume of work previously awarded to 
  6.27  each design-builder by the commissioner, with the object of 
  6.28  effecting an equitable distribution of contracts among qualified 
  6.29  design-builders, provided this distribution does not violate the 
  6.30  principle of selection of the most highly qualified 
  6.31  design-builder. 
  6.32     (f) The commissioner shall negotiate a two-part 
  6.33  design-build contract with the design-builder selected by the 
  6.34  board at compensation which the commissioner determines is fair, 
  6.35  competitive, and reasonable.  The first part must be a fixed fee 
  6.36  contract for the preliminary design of the project, under which 
  7.1   the design-builder will prepare a written and graphic 
  7.2   description of the project, containing all information 
  7.3   reasonably required to establish a cost and schedule for 
  7.4   completion of the design and construction of the project.  The 
  7.5   second part must provide for preparation of final plans, and 
  7.6   specifications and construction of the project, with 
  7.7   compensation for design and construction services on the basis 
  7.8   of the actual cost of the work plus a negotiated fee. 
  7.9      (g) If the commissioner is unable to negotiate a 
  7.10  satisfactory design-build contract with the design-builder 
  7.11  considered by the board to be the most qualified at a price the 
  7.12  commissioner determines to be fair, competitive, and reasonable, 
  7.13  the commissioner may terminate negotiations with that 
  7.14  design-builder.  The commissioner may then undertake 
  7.15  negotiations with the second most qualified firm.  If the 
  7.16  commissioner is unable to negotiate a satisfactory contract with 
  7.17  the second most qualified design-builder, the commissioner may 
  7.18  undertake negotiations with the third most qualified 
  7.19  design-builder. 
  7.20     (h) If the commissioner is unable to negotiate a 
  7.21  satisfactory contract with any of the selected design-builders, 
  7.22  the commissioner may either revise the request for proposals and 
  7.23  solicit new proposals or request selection of a designer 
  7.24  pursuant to section 16B.33 and proceed with competitive bidding 
  7.25  pursuant to section 16B.07. 
  7.26     Sec. 2.  Minnesota Statutes 1996, section 16B.31, 
  7.27  subdivision 1, is amended to read: 
  7.28     Subdivision 1.  [CONSTRUCTION PLANS AND SPECIFICATIONS.] (a)
  7.29  The commissioner shall (1) have plans and specifications 
  7.30  prepared for the construction, alteration, or enlargement of all 
  7.31  state buildings, structures, and other improvements except 
  7.32  highways and bridges, and except for buildings and structures 
  7.33  under the control of the board of trustees of the Minnesota 
  7.34  state colleges and universities; (2) approve those plans and 
  7.35  specifications; (3) advertise for bids and award all contracts 
  7.36  in connection with the improvements; (4) supervise and inspect 
  8.1   all work relating to the improvements; (5) approve all lawful 
  8.2   changes in plans and specifications after the contract for an 
  8.3   improvement is let; and (6) approve estimates for payment.  This 
  8.4   subdivision does not apply to the construction of the zoological 
  8.5   gardens.  
  8.6      (b) The commissioner may use a design-build method of 
  8.7   project development and construction and award a design-build 
  8.8   contract on the basis of qualification-based selection without 
  8.9   bids as provided in section 16B.071. 
  8.10     Sec. 3.  Minnesota Statutes 1996, section 16B.33, 
  8.11  subdivision 1, is amended to read: 
  8.12     Subdivision 1.  [DEFINITIONS.] As used in this section, the 
  8.13  following terms have the meanings given them:  
  8.14     (a) "Agency" has the meaning given in section 16B.01.  
  8.15     (b) "Architect" means an architect or landscape architect 
  8.16  registered to practice under sections 326.02 to 326.15.  
  8.17     (c) "Board" means the state designer selection board.  
  8.18     (d) "Designer" means an architect or engineer, or a 
  8.19  partnership, association, or corporation comprised primarily of 
  8.20  architects or engineers or of both architects and engineers.  
  8.21     (e) "Design-builder" means the person that proposes to 
  8.22  design and construct a project governed by the procedures of 
  8.23  section 16B.071. 
  8.24     (f) "Engineer" means an engineer registered to practice 
  8.25  under sections 326.02 to 326.15.  
  8.26     (f) (g) "Person" includes an individual, corporation, 
  8.27  partnership, association, or any other legal entity.  
  8.28     (g) (h) "Primary designer" means the designer who is to 
  8.29  have primary design responsibility for a project, and does not 
  8.30  include designers who are merely consulted by the user agency 
  8.31  and do not have substantial design responsibility, or designers 
  8.32  who will or may be employed or consulted by the primary designer.
  8.33     (h) (i) "Project" means an undertaking to construct, erect, 
  8.34  or remodel a building by or for the state or an agency.  
  8.35     (i) (j) "User agency" means the agency undertaking a 
  8.36  specific project.  
  9.1      Sec. 4.  Minnesota Statutes 1996, section 16B.33, 
  9.2   subdivision 2, is amended to read: 
  9.3      Subd. 2.  [ORGANIZATION OF BOARD.] (a) [MEMBERSHIP.] The 
  9.4   state designer selection board consists of five seven 
  9.5   individuals, the majority of whom must be Minnesota residents.  
  9.6   Each of the following three four organizations shall nominate 
  9.7   one individual whose name and qualifications shall be submitted 
  9.8   to the commissioner of administration for consideration:  the 
  9.9   consulting engineers council of Minnesota after consultation 
  9.10  with other professional engineering societies in the state; the 
  9.11  AIA Minnesota society of architects; the Minnesota chapter of 
  9.12  the Associated General Contractors, after consultation with 
  9.13  other commercial contractor associations in the state; and the 
  9.14  Minnesota board of the arts.  The commissioner may appoint 
  9.15  the three four named individuals to the board but may reject a 
  9.16  nominated individual and request another nomination.  The 
  9.17  remaining two members shall also be appointed by the 
  9.18  commissioner shall be a voting member of the board and shall 
  9.19  appoint the remaining two members from the public at large.  The 
  9.20  commissioner may not serve as chair of the board. 
  9.21     (b) [NONVOTING MEMBERS.] In addition to the five seven 
  9.22  members of the board, two nonvoting members shall participate in 
  9.23  the interviewing and selection of designers pursuant to this 
  9.24  section and design-builders pursuant to section 16B.071.  One 
  9.25  shall be a representative of the commissioner and shall 
  9.26  participate in the interviewing and selection of designers for 
  9.27  all projects.  The other shall be a representative of the user 
  9.28  agency, who shall participate in the interviewing and selection 
  9.29  of the designers for the project being undertaken by the user 
  9.30  agency.  The commissioner shall appoint the representative of 
  9.31  the user agency in consultation with the user agency.  
  9.32     (c) [TERMS; COMPENSATION; REMOVAL; VACANCIES.] The 
  9.33  membership terms, compensation, removal of members, and filling 
  9.34  of vacancies on the board are as provided in section 15.0575.  
  9.35  No individual may serve for more than two consecutive terms.  
  9.36     (d) [OFFICERS, RULES.] At its first meeting, the board 
 10.1   shall elect a voting member of the board as chair.  The board 
 10.2   shall also elect other officers necessary for the conduct of its 
 10.3   affairs.  The board shall adopt rules governing its operations 
 10.4   and the conduct of its meetings.  The rules shall provide for 
 10.5   the terms of the chair and other officers.  
 10.6      (e) [MEETINGS.] The board shall meet as often as is 
 10.7   necessary, not less than twice annually, in order to act 
 10.8   expeditiously on requests submitted to it for selection of 
 10.9   primary designers.  
 10.10     (f) [OFFICE, STAFF, RECORDS.] The department of 
 10.11  administration shall provide the board with suitable quarters to 
 10.12  maintain an office, hold meetings, and keep records.  The 
 10.13  commissioner shall designate an employee of the department of 
 10.14  administration to serve as executive secretary to the board and 
 10.15  shall furnish a secretarial staff to the board as necessary for 
 10.16  the expeditious conduct of the board's duties and 
 10.17  responsibilities.  
 10.18     Sec. 5.  Minnesota Statutes 1996, section 16B.33, is 
 10.19  amended by adding a subdivision to read: 
 10.20     Subd. 4a.  [DESIGN-BUILDER SELECTION PROCESS.] The board 
 10.21  shall select design-builders pursuant to section 16B.071.  The 
 10.22  board may not select a design-builder in which a member of the 
 10.23  board has a current financial interest.