1.1                          A bill for an act 
  1.2             relating to transportation; providing for design-build 
  1.3             method of state transportation project delivery; 
  1.4             proposing coding for new law in Minnesota Statutes, 
  1.5             chapter 161. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [161.3201] [DESIGN-BUILD CONTRACTS; 
  1.8   DEFINITIONS.] 
  1.9      Subdivision 1.  [SCOPE.] The terms used in sections 
  1.10  161.3201 to 161.3208 have the meanings given in this section. 
  1.11     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
  1.12  commissioner of transportation. 
  1.13     Subd. 3.  [DESIGN-BUILD CONTRACT.] "Design-build contract" 
  1.14  means a single contract between the department of transportation 
  1.15  and a design-build company or firm to furnish the architectural 
  1.16  or engineering and related design services as well as the labor, 
  1.17  material, supplies, equipment, and construction services for the 
  1.18  transportation project. 
  1.19     Subd. 4.  [DESIGN-BUILD FIRM.] "Design-build firm" means a 
  1.20  proprietorship, partnership, limited liability partnership, 
  1.21  joint venture, corporation, any type of limited liability 
  1.22  company, professional corporation, or any legal entity. 
  1.23     Subd. 5.  [DESIGN PROFESSIONAL.] "Design professional" 
  1.24  means a person who holds a license under chapter 326 that is 
  1.25  required to be registered under Minnesota law. 
  2.1      Subd. 6.  [DESIGN-BUILD TRANSPORTATION 
  2.2   PROJECT.] "Design-build transportation project" means the 
  2.3   procurement of both the design and construction of a 
  2.4   transportation project in a single contract with a company or 
  2.5   companies capable of providing the necessary engineering 
  2.6   services and construction. 
  2.7      Subd. 7.  [DESIGN-BUILDER.] "Design-builder" means the 
  2.8   design-build firm that proposes to design and build a 
  2.9   transportation project governed by the procedures of this 
  2.10  section. 
  2.11     Subd. 8.  [REQUEST FOR PROPOSALS OR RFP.] "Request for 
  2.12  proposals" or "RFP" means the document by which the commissioner 
  2.13  solicits proposals from prequalified design-build firms to 
  2.14  design and construct the transportation project. 
  2.15     Subd. 9.  [REQUEST FOR QUALIFICATIONS OR RFQ.] "Request for 
  2.16  qualifications" or "RFQ" means a document to prequalify and 
  2.17  short-list potential design-build firms. 
  2.18     Sec. 2.  [161.3202] [DESIGN-BUILD AUTHORITY FOR MAJOR 
  2.19  PROJECTS.] 
  2.20     Subdivision 1.  [BEST VALUE SELECTION.] Notwithstanding 
  2.21  sections 16C.25, 161.315, 161.32, 161.321, 174.14 to 174.17, or 
  2.22  any other law to the contrary, the commissioner may solicit and 
  2.23  award a design-build contract for a project on the basis of a 
  2.24  best value selection process. 
  2.25     Subd. 2.  [COMPETITIVE, OPEN PROCESS.] Sections 161.3201 to 
  2.26  161.3208 apply only to transportation projects using the 
  2.27  two-step competitive process utilizing public solicitation for 
  2.28  design-build services. 
  2.29     Subd. 3.  [RESTRICTION; REPORTS.] (a) The number of 
  2.30  design-build contracts awarded by the commissioner in any fiscal 
  2.31  year may not exceed ten percent of the total number of 
  2.32  transportation construction contracts awarded by the 
  2.33  commissioner in the previous fiscal year. 
  2.34     (b) The commissioner shall notify the chairs of the senate 
  2.35  and house of representatives committees with jurisdiction over 
  2.36  transportation policy and transportation finance each time the 
  3.1   commissioner decides to use the design-build method of 
  3.2   procurement and explain why that method was chosen.  
  3.3      Sec. 3.  [161.3203] [PRELIMINARY DETERMINATION TO AWARD 
  3.4   DESIGN-BUILD CONTRACT.] 
  3.5      Subdivision 1.  [GENERAL CRITERIA.] A design-build 
  3.6   contracting procedure authorized under sections 161.3201 to 
  3.7   161.3208 may be used for a specific project only after the 
  3.8   commissioner determines that awarding a design-build contract 
  3.9   will serve the public interest or that use of the traditional 
  3.10  method of awarding a construction contract to the lowest 
  3.11  responsive and responsible bidder is not practical for meeting 
  3.12  desired quality standards or delivery schedules. 
  3.13     Subd. 2.  [SPECIFIC CRITERIA.] The commissioner shall use 
  3.14  the following criteria as the minimum basis for determining when 
  3.15  to use the design-build method of project delivery: 
  3.16     (1) the extent to which it can adequately define the 
  3.17  project requirements in a proposed scope of the design and 
  3.18  construction desired; 
  3.19     (2) the time constraints for delivery of the project; 
  3.20     (3) the capability and experience of potential contractors 
  3.21  with the design-build method of project delivery or similar 
  3.22  experience; 
  3.23     (4) the suitability of the project for use of the 
  3.24  design-build method of project delivery with respect to time, 
  3.25  schedule, costs, and quality factors; 
  3.26     (5) the capability of the department of transportation to 
  3.27  manage the project, including the employment of experienced 
  3.28  personnel or outside consultants; 
  3.29     (6) the capability of the department of transportation to 
  3.30  oversee the project with persons who are familiar and 
  3.31  experienced with the design-build method of project delivery or 
  3.32  similar experience; and 
  3.33     (7) other criteria the commissioner deems relevant and 
  3.34  states in writing in its determination to utilize the 
  3.35  design-build method of project delivery. 
  3.36     Sec. 4.  [161.3204] [DESIGN-BUILD NOTICE; REPORT.] 
  4.1      Subdivision 1.  [SUMMARY REPORT OF REASONS FOR 
  4.2   DETERMINATION.] The commissioner shall summarize in a written 
  4.3   statement its reasons for using the design-build construction 
  4.4   contracting procedure.  This statement, along with other 
  4.5   relevant information describing the project, must be made 
  4.6   available upon request to interested parties. 
  4.7      Subd. 2.  [FINAL DETERMINATION AUTHORITY.] Final 
  4.8   determination to use a design-build construction contracting 
  4.9   procedure may be made only by the commissioner. 
  4.10     Sec. 5.  [161.3205] [LICENSING REQUIREMENTS.] 
  4.11     Subdivision 1.  [LICENSED PROFESSIONAL REQUIRED.] Each 
  4.12  design-builder shall employ, or have as a partner, member, 
  4.13  officer, coventurer, or subcontractor a person duly licensed and 
  4.14  registered to provide the design services required to complete 
  4.15  the project and do business in the state. 
  4.16     Subd. 2.  [CONTRACTING FOR LICENSED PROFESSIONAL.] A 
  4.17  design-builder may enter into a contract to provide professional 
  4.18  or construction services for a project that the design-builder 
  4.19  is not licensed, registered, or qualified to perform, so long as 
  4.20  the design-builder provides those services through 
  4.21  subcontractors with duly licensed, registered, or otherwise 
  4.22  qualified persons in accordance with sections 161.3201 to 
  4.23  161.3208. 
  4.24     Subd. 3.  [LIABILITY.] (a) Nothing in this section 
  4.25  authorizing design-build contracts is intended to limit or 
  4.26  eliminate the responsibility or liability owed by a professional 
  4.27  on a design-build project to the state, county, or city, or 
  4.28  other third parties under existing law. 
  4.29     (b) The design service portion of a design-build contract 
  4.30  must be considered a service and not a product. 
  4.31     Sec. 6.  [161.3206] [DESIGN-BUILD RFQ; SELECTION TEAM; 
  4.32  EVALUATION.] 
  4.33     Subdivision 1.  [TWO-PHASE PROCEDURE.] If the commissioner 
  4.34  determines that the design-build method of project delivery is 
  4.35  appropriate for a project, the commissioner shall establish a 
  4.36  two-phase procedure for awarding the design-build contract, as 
  5.1   described in this subdivision and section 161.3207. 
  5.2      Subd. 2.  [TECHNICAL REVIEW COMMITTEE.] During the 
  5.3   phase-one request for qualifications (RFQ) and before 
  5.4   solicitation, the commissioner shall appoint a technical review 
  5.5   committee of at least five persons.  The technical review 
  5.6   committee must include an individual whose name and 
  5.7   qualifications are submitted to the commissioner by the 
  5.8   Minnesota chapter of the associated general contractors, after 
  5.9   consultation with other commercial contractor associations in 
  5.10  the state.  Members of the technical review committee who are 
  5.11  not state employees are subject to the Minnesota Government Data 
  5.12  Practices Act and section 16C.06 to the same extent that state 
  5.13  agencies are subject to those provisions.  A technical review 
  5.14  committee member may not participate in the review or discussion 
  5.15  of responses from a person in whom the member has a financial 
  5.16  interest.  
  5.17     Subd. 3.  [CONTENTS.] The commissioner shall prepare or 
  5.18  have prepared a request for qualifications.  The request for 
  5.19  qualifications must include the following: 
  5.20     (1) the minimum qualifications of design-builders necessary 
  5.21  to meet the requirements for acceptance; 
  5.22     (2) a scope of work statement and schedule; 
  5.23     (3) documents defining the project requirements; 
  5.24     (4) the form of contract to be awarded; 
  5.25     (5) the weighted selection criteria for compiling a short 
  5.26  list and the number of firms to be included in the short list, 
  5.27  which must be at least two but not more than five; 
  5.28     (6) a description of the RFP requirements; 
  5.29     (7) the maximum time allowed for design and construction; 
  5.30     (8) the commissioner's estimated cost of design and 
  5.31  construction; and 
  5.32     (9) requirements for construction experience, design 
  5.33  experience, financial, personnel, and equipment resources 
  5.34  available from potential design-builders for the project and 
  5.35  experience in other design-build transportation projects or 
  5.36  similar projects, provided that these requirements may not 
  6.1   unduly restrict competition. 
  6.2      Subd. 4.  [EVALUATION.] The selection team shall evaluate 
  6.3   the design-build qualifications of responding firms and shall 
  6.4   compile a short list of firms in accordance with qualifications 
  6.5   criteria described in the RFQ.  If only one design-build firm 
  6.6   responds to the RFQ, the commissioner may readvertise or cancel 
  6.7   the project as the commissioner deems necessary. 
  6.8      Sec. 7.  [161.3207] [RFP FOR DESIGN-BUILD.] 
  6.9      During phase two, the commissioner shall issue a request 
  6.10  for proposals (RFP) to the design-builders on the short list.  
  6.11  The request must include: 
  6.12     (1) the scope of work, including (i) performance and 
  6.13  technical requirements, (ii) conceptual design, (iii) 
  6.14  specifications, and (iv) functional and operational elements for 
  6.15  the delivery of the completed project, which must be prepared by 
  6.16  a registered or licensed professional engineer; 
  6.17     (2) a description of the qualifications required of the 
  6.18  design-builder and the selection criteria, including the weight 
  6.19  or relative order, or both, of each criterion; 
  6.20     (3) copies of the contract documents that the successful 
  6.21  proposer will be expected to sign; 
  6.22     (4) the maximum time allowable for design and construction; 
  6.23     (5) the road authority's estimated cost of design and 
  6.24  construction; 
  6.25     (6) the requirement that a submitted proposal be segmented 
  6.26  into two parts, a technical proposal and a price proposal; 
  6.27     (7) the requirement that each proposal be in a separately 
  6.28  sealed, clearly identified package and include the date and time 
  6.29  of the submittal deadline; 
  6.30     (8) the requirement that the technical proposal include a 
  6.31  critical path method, schedule of the work to be performed, or 
  6.32  similar schematic design plans and specifications; technical 
  6.33  reports; calculations; permit requirements; applicable 
  6.34  development fees; and other data requested in the request for 
  6.35  proposals; 
  6.36     (9) the requirement that the price proposal contain all 
  7.1   design, construction, engineering, inspection, and construction 
  7.2   costs of the proposed project; 
  7.3      (10) the date, time, and location of the public opening of 
  7.4   the sealed price proposals; and 
  7.5      (11) other information relevant to the project. 
  7.6      Sec. 8.  [161.3208] [REPLACING TEAM MEMBERS.] 
  7.7      Persons identified in a response to a request for 
  7.8   qualifications or a request for proposals may not be replaced 
  7.9   without the written approval of the commissioner.  The 
  7.10  commissioner may revoke an awarded contract if persons 
  7.11  identified in a response to an RFQ or RFP are replaced without 
  7.12  the commissioner's written approval.  To qualify for the 
  7.13  commissioner's approval, the written request must document that 
  7.14  the proposed replacement person will be equal to or better than 
  7.15  that described in the response to the request for qualifications 
  7.16  or request for proposal.  The commissioner shall use the 
  7.17  criteria specified in the request for qualifications or request 
  7.18  for proposals to evaluate the request. 
  7.19     Sec. 9.  [161.3209] [DESIGN-BUILD AWARD.] 
  7.20     Subdivision 1.  [AWARD; COMPUTATION; ANNOUNCEMENT.] Except 
  7.21  as provided in subdivision 2, a design-build contract must be 
  7.22  awarded as follows: 
  7.23     (a) The technical review committee shall score the 
  7.24  technical proposals using the selection criteria in the request 
  7.25  for proposals (RFP).  The technical review committee shall then 
  7.26  submit a technical proposal score for each design-builder to the 
  7.27  commissioner.  The technical review committee shall reject any 
  7.28  proposal it deems nonresponsive. 
  7.29     (b) The commissioner shall announce the technical proposal 
  7.30  score for each design-builder and shall publicly open the sealed 
  7.31  price proposals and shall divide each design-builder's price by 
  7.32  the technical score that the technical review committee has 
  7.33  given to it to obtain an adjusted score.  The design-builder 
  7.34  selected must be that responsive and responsible design-builder 
  7.35  whose adjusted score is the lowest. 
  7.36     (c) If a time factor is included with the selection 
  8.1   criteria in the request for proposals package, the commissioner 
  8.2   may also adjust the bids using a value of the time factor 
  8.3   established by the commissioner.  The value of the time factor 
  8.4   must be expressed as a value per day.  The adjustment must be 
  8.5   based on the total time value.  The total time value is the 
  8.6   design-builder's total number of days to complete the project 
  8.7   multiplied by the factor.  The time-adjusted price is the total 
  8.8   time value plus the bid amount.  This adjustment must be used 
  8.9   for selection purposes only, and must not affect the department 
  8.10  of transportation's liquidated damages schedule or incentive or 
  8.11  disincentive program.  An adjusted score must then be obtained 
  8.12  by dividing each design-builder's time-adjusted price by the 
  8.13  score given by the technical review team.  The commissioner 
  8.14  shall select the responsive and responsible design-builder whose 
  8.15  adjusted score is the lowest. 
  8.16     (d) Unless all proposals are rejected, the commissioner 
  8.17  shall award the contract to the responsive and responsible 
  8.18  design-builder with the lowest adjusted score.  The commissioner 
  8.19  shall reserve the right to reject all proposals. 
  8.20     Subd. 2.  [ALTERNATIVE PROCESS FOR CERTAIN CONTRACTS.] (a) 
  8.21  The commissioner may elect to use the process in paragraph (b) 
  8.22  for a design-build contract for a project with an estimated 
  8.23  project cost of less than $5,000,000. 
  8.24     (b) The commissioner shall give the lowest cost proposal 
  8.25  the full number of price points defined in the request for 
  8.26  proposals.  The commissioner shall award each of the other 
  8.27  proposals a percentage of the price points based on a ratio of 
  8.28  the lowest price divided by the responder's price.  The 
  8.29  commissioner shall add the technical score and price score and 
  8.30  award the contract to the responder with the highest total score.
  8.31     Subd. 3.  [STIPULATED FEE.] The commissioner shall award a 
  8.32  stipulated fee of not less than two-tenths of one percent of the 
  8.33  department's estimated cost of design and construction to each 
  8.34  short-listed, responsible proposer who provides a short-listed 
  8.35  but unsuccessful proposal.  If the commissioner does not award a 
  8.36  contract, all responsive proposers must receive the stipulated 
  9.1   fee.  If the commissioner cancels the contract before reviewing 
  9.2   the technical proposals, the commissioner shall award each 
  9.3   design-builder on the short list a stipulated fee of not less 
  9.4   than two-tenths of one percent of the commissioner's estimated 
  9.5   cost of design and construction.  The commissioner shall pay the 
  9.6   stipulated fee to each proposer within 90 days after the award 
  9.7   of the contract or the decision not to award a contract.  In 
  9.8   consideration for paying the stipulated fee, the commissioner 
  9.9   may use any ideas or information contained in the proposals in 
  9.10  connection with any contract awarded for the project or in 
  9.11  connection with a subsequent procurement, without any obligation 
  9.12  to pay any additional compensation to the unsuccessful proposers.
  9.13  Notwithstanding the other provisions of this paragraph, an 
  9.14  unsuccessful short-list proposer may elect to waive the 
  9.15  stipulated fee.  If an unsuccessful short-list proposer elects 
  9.16  to waive the stipulated fee, the commissioner may not use ideas 
  9.17  and information contained in that proposer's proposal. 
  9.18     Subd. 4.  [LOW-BID, DESIGN-BUILD PROCESS.] (a) The 
  9.19  commissioner may also use low-bid, design-build procedures to 
  9.20  award a design-build contract where the scope of the work can be 
  9.21  clearly defined. 
  9.22     (b) Low-bid, design-build projects may require an RFQ and 
  9.23  short-listing, and must require an RFP. 
  9.24     (c) Submitted proposals under this subdivision must include 
  9.25  separately a technical proposal and a price proposal.  The 
  9.26  low-bid, design-build procedures must follow a two-step process, 
  9.27  as follows:  
  9.28     (1) The first step is the review of the technical proposal 
  9.29  by the technical review committee as provided in section 
  9.30  161.3206, subdivision 2.  The technical review committee shall 
  9.31  open the technical proposal first and shall determine if it 
  9.32  complies with the requirements of the RFP and is responsive.  
  9.33  The technical review committee may not perform any ranking or 
  9.34  scoring of the technical proposals.  
  9.35     (2) The second step is the determination of the low bidder 
  9.36  based on the price proposal.  The commissioner may not open the 
 10.1   price proposal until the review of the technical proposal is 
 10.2   complete. 
 10.3      (d) The contract award under low-bid, design-build 
 10.4   procedures must be made to the proposer whose sealed bid is 
 10.5   responsive to the technical requirements as determined by the 
 10.6   technical review committee and is also the lowest bid. 
 10.7      (e) For transportation projects using low-bid, design-build 
 10.8   procedures, any engineering consultant that completes the design 
 10.9   for the low-bid, design-build project must have previously been 
 10.10  approved by the department. 
 10.11     (f) A stipulated fee may not be paid for unsuccessful bids 
 10.12  on low-bid, design-build projects.  
 10.13     Subd. 5.  [REJECTION OF BIDS.] The commissioner may reject 
 10.14  all bids under this section. 
 10.15     Sec. 10.  [EFFECTIVE DATE.] 
 10.16     Sections 1 to 9 are effective the day following final 
 10.17  enactment.