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.  [161.3410] [DESIGN-BUILD CONTRACTS; 
  1.8   DEFINITIONS.] 
  1.9      Subdivision 1.  [SCOPE.] The terms used in sections 
  1.10  161.3410 to 161.3428 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.  [161.3412] [DESIGN-BUILD AUTHORITY.] 
  2.19     Subdivision 1.  [BEST VALUE SELECTION.] Notwithstanding 
  2.20  sections 16C.25, 161.32, and 161.321, or any other law to the 
  2.21  contrary, the commissioner may solicit and award a design-build 
  2.22  contract for a project on the basis of a best value selection 
  2.23  process.  Section 16C.08 does not apply to design-build 
  2.24  contracts to which the commissioner is a party. 
  2.25     Subd. 2.  [COMPETITIVE, OPEN PROCESS.] Sections 161.3410 to 
  2.26  161.3428 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      Subd. 4.  [MUNICIPAL CONSENT.] Use of the design-build 
  3.4   method of state transportation project delivery is subject to 
  3.5   state law concerning municipal consent to highways in 
  3.6   municipalities. 
  3.7      Sec. 3.  [161.3414] [DETERMINATION TO USE DESIGN-BUILD 
  3.8   SELECTION METHOD.] 
  3.9      Subdivision 1.  [GENERAL CRITERIA.] A design-build 
  3.10  contracting procedure authorized under sections 161.3410 to 
  3.11  161.3428 may be used for a specific project only after the 
  3.12  commissioner determines that awarding a design-build contract 
  3.13  will serve the public interest. 
  3.14     Subd. 2.  [SPECIFIC CRITERIA.] The commissioner shall use 
  3.15  the following criteria as the minimum basis for determining when 
  3.16  to use the design-build method of project delivery: 
  3.17     (1) the extent to which it can adequately define the 
  3.18  project requirements in a proposed scope of the design and 
  3.19  construction desired; 
  3.20     (2) the time constraints for delivery of the project; 
  3.21     (3) the capability and experience of potential contractors 
  3.22  with the design-build method of project delivery or similar 
  3.23  experience; 
  3.24     (4) the suitability of the project for use of the 
  3.25  design-build method of project delivery with respect to time, 
  3.26  schedule, costs, and quality factors; 
  3.27     (5) the capability of the department of transportation to 
  3.28  manage the project, including the employment of experienced 
  3.29  personnel or outside consultants; 
  3.30     (6) the capability of the department of transportation to 
  3.31  oversee the project with individuals or design-build firms who 
  3.32  are familiar and experienced with the design-build method of 
  3.33  project delivery or similar experience; 
  3.34     (7) the lack of ability and availability of any current 
  3.35  state employee to perform the services called for by the 
  3.36  contract; 
  4.1      (8) the original character of the product or the services; 
  4.2      (9) the work to be performed on the project is necessary to 
  4.3   the agency's achievement of its statutory responsibilities and 
  4.4   there is statutory authority to enter into the contract; and 
  4.5      (10) other criteria the commissioner deems relevant and 
  4.6   states in writing in its determination to utilize the 
  4.7   design-build method of project delivery. 
  4.8      Sec. 4.  [161.3416] [DESIGN-BUILD NOTICE; REPORT.] 
  4.9      Subdivision 1.  [SUMMARY REPORT OF REASONS FOR 
  4.10  DETERMINATION.] The commissioner shall summarize in a written 
  4.11  statement its reasons for using the design-build construction 
  4.12  contracting procedure.  This statement, along with other 
  4.13  relevant information describing the project, must be made 
  4.14  available upon request to interested parties. 
  4.15     Subd. 2.  [FINAL DETERMINATION AUTHORITY.] Final 
  4.16  determination to use a design-build construction contracting 
  4.17  procedure may be made only by the commissioner. 
  4.18     Sec. 5.  [161.3418] [LICENSING REQUIREMENTS.] 
  4.19     Subdivision 1.  [LICENSED PROFESSIONAL REQUIRED.] Each 
  4.20  design-builder shall employ, or have as a partner, member, 
  4.21  officer, coventurer, or subcontractor a person duly licensed and 
  4.22  registered to provide the design services required to complete 
  4.23  the project and do business in the state. 
  4.24     Subd. 2.  [CONTRACTING FOR LICENSED PROFESSIONAL.] A 
  4.25  design-builder may enter into a contract to provide professional 
  4.26  or construction services for a project that the design-builder 
  4.27  is not licensed, registered, or qualified to perform, so long as 
  4.28  the design-builder provides those services through 
  4.29  subcontractors with duly licensed, registered, or otherwise 
  4.30  qualified individuals in accordance with sections 161.3410 to 
  4.31  161.3428. 
  4.32     Subd. 3.  [LIABILITY.] (a) Nothing in this section 
  4.33  authorizing design-build contracts is intended to limit or 
  4.34  eliminate the responsibility or liability owed by a professional 
  4.35  on a design-build project to the state, county, or city, or 
  4.36  other third parties under existing law. 
  5.1      (b) The design service portion of a design-build contract 
  5.2   must be considered a service and not a product. 
  5.3      Sec. 6.  [161.3420] [DESIGN-BUILD RFQ; SELECTION TEAM; 
  5.4   EVALUATION.] 
  5.5      Subdivision 1.  [TWO-PHASE PROCEDURE.] If the commissioner 
  5.6   determines that the design-build best value method of project 
  5.7   delivery is appropriate for a project, the commissioner shall 
  5.8   establish a two-phase procedure for awarding the design-build 
  5.9   contract, as described in this subdivision and section 161.3422. 
  5.10     Subd. 2.  [TECHNICAL REVIEW COMMITTEE.] During the 
  5.11  phase-one request for qualifications (RFQ) and before 
  5.12  solicitation, the commissioner shall appoint a technical review 
  5.13  committee of at least five individuals.  The technical review 
  5.14  committee must include an individual whose name and 
  5.15  qualifications are submitted to the commissioner by the 
  5.16  Minnesota chapter of the Associated General Contractors, after 
  5.17  consultation with other commercial contractor associations in 
  5.18  the state.  Members of the technical review committee who are 
  5.19  not state employees are subject to the Minnesota Government Data 
  5.20  Practices Act and section 16C.06 to the same extent that state 
  5.21  agencies are subject to those provisions.  A technical review 
  5.22  committee member may not participate in the review or discussion 
  5.23  of responses to a request for qualifications or request for 
  5.24  proposals when the member has a financial interest in any of the 
  5.25  design-build firms that respond to that request for 
  5.26  qualifications or request for proposals.  "Financial interest" 
  5.27  includes, but is not limited to, being or serving as an owner, 
  5.28  employee, partner, limited liability partner, shareholder, joint 
  5.29  venturer, family member, officer, or director of a design-build 
  5.30  firm responding to a request for qualifications or request for 
  5.31  proposals for a specific project, or having any other economic 
  5.32  interest in that design-build firm.  The members of the 
  5.33  technical review committee must be treated as state employees in 
  5.34  the event of litigation resulting from any action arising out of 
  5.35  their service on the committee. 
  5.36     Subd. 3.  [CONTENTS.] The commissioner shall prepare or 
  6.1   have prepared a request for qualifications.  The request for 
  6.2   qualifications must include the following: 
  6.3      (1) the minimum qualifications of design-builders necessary 
  6.4   to meet the requirements for acceptance; 
  6.5      (2) a scope of work statement and schedule; 
  6.6      (3) documents defining the project requirements; 
  6.7      (4) the form of contract to be awarded; 
  6.8      (5) the weighted selection criteria for compiling a short 
  6.9   list and the number of firms to be included in the short list, 
  6.10  which must be at least two but not more than five; 
  6.11     (6) a description of the RFP requirements; 
  6.12     (7) the maximum time allowed for design and construction; 
  6.13     (8) the commissioner's estimated cost of design and 
  6.14  construction; 
  6.15     (9) requirements for construction experience, design 
  6.16  experience, financial, personnel, and equipment resources 
  6.17  available from potential design-builders for the project and 
  6.18  experience in other design-build transportation projects or 
  6.19  similar projects, provided that these requirements may not 
  6.20  unduly restrict competition; and 
  6.21     (10) a statement that "past performance" or "experience" 
  6.22  does not include the exercise or assertion of a person's legal 
  6.23  rights. 
  6.24     Subd. 4.  [EVALUATION.] The selection team shall evaluate 
  6.25  the design-build qualifications of responding firms and shall 
  6.26  compile a short list of no more than five most highly qualified 
  6.27  firms in accordance with qualifications criteria described in 
  6.28  the RFQ.  If only one design-build firm responds to the RFQ or 
  6.29  remains on the short list, the commissioner may readvertise or 
  6.30  cancel the project as the commissioner deems necessary. 
  6.31     Sec. 7.  [161.3422] [RFP FOR DESIGN-BUILD.] 
  6.32     During phase two, the commissioner shall issue a request 
  6.33  for proposals (RFP) to the design-builders on the short list.  
  6.34  The request must include: 
  6.35     (1) the scope of work, including (i) performance and 
  6.36  technical requirements, (ii) conceptual design, (iii) 
  7.1   specifications, and (iv) functional and operational elements for 
  7.2   the delivery of the completed project, which must be prepared by 
  7.3   a registered or licensed professional engineer; 
  7.4      (2) a description of the qualifications required of the 
  7.5   design-builder and the selection criteria, including the weight 
  7.6   or relative order, or both, of each criterion; 
  7.7      (3) copies of the contract documents that the successful 
  7.8   proposer will be expected to sign; 
  7.9      (4) the maximum time allowable for design and construction; 
  7.10     (5) the road authority's estimated cost of design and 
  7.11  construction; 
  7.12     (6) the requirement that a submitted proposal be segmented 
  7.13  into two parts, a technical proposal and a price proposal; 
  7.14     (7) the requirement that each proposal be in a separately 
  7.15  sealed, clearly identified package and include the date and time 
  7.16  of the submittal deadline; 
  7.17     (8) the requirement that the technical proposal include a 
  7.18  critical path method; bar schedule of the work to be performed, 
  7.19  or similar schematic; design plans and specifications; technical 
  7.20  reports; calculations; permit requirements; applicable 
  7.21  development fees; and other data requested in the request for 
  7.22  proposals; 
  7.23     (9) the requirement that the price proposal contain all 
  7.24  design, construction, engineering, inspection, and construction 
  7.25  costs of the proposed project; 
  7.26     (10) the date, time, and location of the public opening of 
  7.27  the sealed price proposals; and 
  7.28     (11) other information relevant to the project. 
  7.29     Sec. 8.  [161.3424] [REPLACING TEAM MEMBERS.] 
  7.30     An individual or a design-build firm identified in a 
  7.31  response to a request for qualifications or a request for 
  7.32  proposals may not be replaced without the written approval of 
  7.33  the commissioner.  The commissioner may revoke an awarded 
  7.34  contract if an individual or a design-build firm identified in a 
  7.35  response to an RFQ or RFP is replaced without the commissioner's 
  7.36  written approval.  To qualify for the commissioner's approval, 
  8.1   the written request must document that the proposed replacement 
  8.2   individual or design-build firm will be equal to or better than 
  8.3   that described in the response to the request for qualifications 
  8.4   or request for proposals.  The commissioner shall use the 
  8.5   criteria specified in the request for qualifications or request 
  8.6   for proposals to evaluate the request. 
  8.7      Sec. 9.  [161.3426] [DESIGN-BUILD AWARD.] 
  8.8      Subdivision 1.  [AWARD; COMPUTATION; ANNOUNCEMENT.] Except 
  8.9   as provided in subdivision 2, a design-build contract shall be 
  8.10  awarded as follows: 
  8.11     (a) The technical review committee shall score the 
  8.12  technical proposals using the selection criteria in the request 
  8.13  for proposals (RFP).  The technical review committee shall then 
  8.14  submit a technical proposal score for each design-builder to the 
  8.15  commissioner.  The technical review committee shall reject any 
  8.16  proposal it deems nonresponsive. 
  8.17     (b) The commissioner shall announce the technical proposal 
  8.18  score for each design-builder and shall publicly open the sealed 
  8.19  price proposals and shall divide each design-builder's price by 
  8.20  the technical score that the technical review committee has 
  8.21  given to it to obtain an adjusted score.  The design-builder 
  8.22  selected must be that responsive and responsible design-builder 
  8.23  whose adjusted score is the lowest. 
  8.24     (c) If a time factor is included with the selection 
  8.25  criteria in the request for proposals package, the commissioner 
  8.26  may also adjust the bids using a value of the time factor 
  8.27  established by the commissioner.  The value of the time factor 
  8.28  must be expressed as a value per day.  The adjustment must be 
  8.29  based on the total time value.  The total time value is the 
  8.30  design-builder's total number of days to complete the project 
  8.31  multiplied by the factor.  The time-adjusted price is the total 
  8.32  time value plus the bid amount.  This adjustment must be used 
  8.33  for selection purposes only, and must not affect the department 
  8.34  of transportation's liquidated damages schedule or incentive or 
  8.35  disincentive program.  An adjusted score must then be obtained 
  8.36  by dividing each design-builder's time-adjusted price by the 
  9.1   score given by the technical review team.  The commissioner 
  9.2   shall select the responsive and responsible design-builder whose 
  9.3   adjusted score is the lowest. 
  9.4      (d) Unless all proposals are rejected, the commissioner 
  9.5   shall award the contract to the responsive and responsible 
  9.6   design-builder with the lowest adjusted score.  The commissioner 
  9.7   shall reserve the right to reject all proposals. 
  9.8      Subd. 2.  [ALTERNATIVE PROCESS FOR CERTAIN CONTRACTS.] (a) 
  9.9   The commissioner may elect to use the process in paragraph (b) 
  9.10  for a design-build contract for a project with an estimated 
  9.11  project cost of less than $5,000,000. 
  9.12     (b) The commissioner shall give the lowest cost proposal 
  9.13  the full number of price points defined in the request for 
  9.14  proposals.  The commissioner shall award each of the other 
  9.15  proposals a percentage of the price points based on a ratio of 
  9.16  the lowest price divided by the responder's price.  The 
  9.17  commissioner shall add the technical score and price score and 
  9.18  award the contract to the responder with the highest total score.
  9.19     Subd. 3.  [STIPULATED FEE.] The commissioner shall award a 
  9.20  stipulated fee not less than two-tenths of one percent of the 
  9.21  department's estimated cost of design and construction to each 
  9.22  short-listed, responsible proposer who provides a responsive but 
  9.23  unsuccessful proposal.  If the commissioner does not award a 
  9.24  contract, all short-listed proposers must receive the stipulated 
  9.25  fee.  If the commissioner cancels the contract before reviewing 
  9.26  the technical proposals, the commissioner shall award each 
  9.27  design-builder on the short list a stipulated fee of not less 
  9.28  than two-tenths of one percent of the commissioner's estimated 
  9.29  cost of design and construction.  The commissioner shall pay the 
  9.30  stipulated fee to each proposer within 90 days after the award 
  9.31  of the contract or the decision not to award a contract.  In 
  9.32  consideration for paying the stipulated fee, the commissioner 
  9.33  may use any ideas or information contained in the proposals in 
  9.34  connection with any contract awarded for the project or in 
  9.35  connection with a subsequent procurement, without any obligation 
  9.36  to pay any additional compensation to the unsuccessful proposers.
 10.1   Notwithstanding the other provisions of this subdivision, an 
 10.2   unsuccessful short-list proposer may elect to waive the 
 10.3   stipulated fee.  If an unsuccessful short-list proposer elects 
 10.4   to waive the stipulated fee, the commissioner may not use ideas 
 10.5   and information contained in that proposer's proposal.  Upon the 
 10.6   request of the commissioner, a proposer who waived a stipulated 
 10.7   fee may withdraw the waiver, in which case the commissioner 
 10.8   shall pay the stipulated fee to the proposer and thereafter may 
 10.9   use ideas and information in the proposer's proposal. 
 10.10     Subd. 4.  [LOW-BID DESIGN-BUILD PROCESS.] (a) The 
 10.11  commissioner may also use low-bid, design-build procedures to 
 10.12  award a design-build contract where the scope of the work can be 
 10.13  clearly defined. 
 10.14     (b) Low-bid design-build projects may require an RFQ and 
 10.15  short-listing, and must require an RFP. 
 10.16     (c) Submitted proposals under this subdivision must include 
 10.17  separately a technical proposal and a price proposal.  The 
 10.18  low-bid, design-build procedures must follow a two-step process 
 10.19  for review of the responses to the RFP as follows:  
 10.20     (1) The first step is the review of the technical proposal 
 10.21  by the technical review committee as provided in section 
 10.22  161.3420, subdivision 2.  The technical review committee must 
 10.23  open the technical proposal first and must determine if it 
 10.24  complies with the requirements of the RFP and is responsive.  
 10.25  The technical review committee may not perform any ranking or 
 10.26  scoring of the technical proposals.  
 10.27     (2) The second step is the determination of the low bidder 
 10.28  based on the price proposal.  The commissioner may not open the 
 10.29  price proposal until the review of the technical proposal is 
 10.30  complete. 
 10.31     (d) The contract award under low-bid, design-build 
 10.32  procedures must be made to the proposer whose sealed bid is 
 10.33  responsive to the technical requirements as determined by the 
 10.34  technical review committee and that is also the lowest bid. 
 10.35     (e) A stipulated fee may be paid for unsuccessful bids on 
 10.36  low-bid, design-build projects only when the commissioner has 
 11.1   required an RFQ and short-listed the most highly qualified 
 11.2   responsive bidders.  
 11.3      Subd. 5.  [REJECTION OF BIDS.] The commissioner may reject 
 11.4   all bids under this section. 
 11.5      Sec. 10.  [161.3428] [LIST OF DESIGN-BUILD CONTRACTS.] 
 11.6      Beginning September 1, 2002, and every subsequent year on 
 11.7   September 1, the commissioner shall submit to the governor, to 
 11.8   the chairs of the house ways and means and senate finance 
 11.9   committees, to the chairs of the house and senate committees 
 11.10  having jurisdiction over transportation policy and finance, and 
 11.11  the legislative reference library, a yearly listing of all 
 11.12  executed design-build contracts.  The report must identify the 
 11.13  contractor, contract amount, duration, and services to be 
 11.14  provided.  The list and summary must: 
 11.15     (1) be sorted by contractor; 
 11.16     (2) show the aggregate value of contracts issued by the 
 11.17  commissioner of transportation and issued to each contractor; 
 11.18  and 
 11.19     (3) state the termination date of each contract. 
 11.20     Sec. 11.  [EFFECTIVE DATE.] 
 11.21     Sections 1 to 10 are effective the day following final 
 11.22  enactment.