1.1                          A bill for an act 
  1.2             relating to state government; regulating state 
  1.3             construction contracts; amending Minnesota Statutes 
  1.4             2004, sections 16B.31, subdivision 1; 16B.33, 
  1.5             subdivision 1; proposing coding for new law in 
  1.6             Minnesota Statutes, chapter 16C. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2004, section 16B.31, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [CONSTRUCTION PLANS AND SPECIFICATIONS; 
  1.11  DESIGN-BUILD, CONSTRUCTION MANAGER AT RISK, OR JOB ORDER 
  1.12  CONTRACTING.] (a) The commissioner shall (1) have plans and 
  1.13  specifications prepared for the construction, alteration, or 
  1.14  enlargement of all state buildings, structures, and other 
  1.15  improvements except highways and bridges, and except for 
  1.16  buildings and structures under the control of the Board of 
  1.17  Regents of the University of Minnesota or of the Board of 
  1.18  Trustees of the Minnesota State Colleges and Universities; (2) 
  1.19  approve those plans and specifications; (3) advertise for bids 
  1.20  and award all contracts in connection with the improvements; (4) 
  1.21  supervise and inspect all work relating to the improvements; (5) 
  1.22  approve all lawful changes in plans and specifications after the 
  1.23  contract for an improvement is let; and (6) approve estimates 
  1.24  for payment.  This subdivision does not apply to the 
  1.25  construction of the Zoological Gardens.  
  1.26     (b) MS 2002 (Expired) 
  2.1      (c) MS 2002 (Expired) 
  2.2      (b) Notwithstanding any other law to the contrary, the 
  2.3   commissioner may: 
  2.4      (1) use a design-build method of project delivery and award 
  2.5   a design-build contract as provided in sections 16C.32 and 
  2.6   16C.33; 
  2.7      (2) use a construction manager at risk method of project 
  2.8   delivery and award a construction manager at risk contract on 
  2.9   the basis of the selection criteria described in section 16C.34; 
  2.10  or 
  2.11     (3) use a job order contracting contractor selection as 
  2.12  described in section 16C.35. 
  2.13     (c) The commissioner may require a primary designer and a 
  2.14  construction manager at risk, by contract, to cooperate in the 
  2.15  design, planning and scheduling, and construction process.  The 
  2.16  contract must not make the primary designer or construction 
  2.17  manager at risk a subcontractor or joint venture partner to the 
  2.18  other or limit the primary designer's or construction manager at 
  2.19  risk's independent obligations to the commissioner. 
  2.20     (d) For projects undertaken by the Minnesota State Colleges 
  2.21  and Universities system, the powers and duties granted in 
  2.22  paragraphs (b) and (c) may be exercised by its board of trustees.
  2.23     (e) The commissioner, the board, the Board of Regents of 
  2.24  the University of Minnesota, and the Board of Trustees of the 
  2.25  Minnesota State Colleges and Universities shall create a panel 
  2.26  of representatives, including representatives of the 
  2.27  construction industry and the architecture and engineering 
  2.28  professions, to evaluate the use of design-build and the 
  2.29  procedures for design-builder selection under section 16C.31, 
  2.30  and shall report to the legislature on or before January 1, 
  2.31  2004, as to the success of design-build as a method of 
  2.32  construction and the need and desirability for any changes in 
  2.33  the selection procedure. 
  2.34     Sec. 2.  Minnesota Statutes 2004, section 16B.33, 
  2.35  subdivision 1, is amended to read: 
  2.36     Subdivision 1.  [DEFINITIONS.] As used in this section, the 
  3.1   following terms have the meanings given them:  
  3.2      (a) "Agency" has the meaning given in section 16B.01.  
  3.3      (b) "Architect" means an architect or landscape architect 
  3.4   registered to practice under sections 326.02 to 326.15.  
  3.5      (c) "Board" means the state Designer Selection Board.  
  3.6      (d) "Design-build" means the process of entering into and 
  3.7   managing a single contract between the commissioner and the 
  3.8   design-builder in which the design-builder agrees to both design 
  3.9   and construct a project as specified in the contract at a 
  3.10  guaranteed maximum or a fixed price. 
  3.11     (e) "Design-builder" means a person who proposes to design 
  3.12  and construct a project in accordance with the requirements of 
  3.13  section 16C.33. 
  3.14     (f) "Designer" means an architect or engineer, or a 
  3.15  partnership, association, or corporation comprised primarily of 
  3.16  architects or engineers or of both architects and engineers.  
  3.17     (e) (g) "Engineer" means an engineer registered to practice 
  3.18  under sections 326.02 to 326.15.  
  3.19     (f) (h) "Person" includes an individual, corporation, 
  3.20  partnership, association, or any other legal entity.  
  3.21     (g) (i) "Primary designer" means the designer who is to 
  3.22  have primary design responsibility for a project, and does not 
  3.23  include designers who are merely consulted by the user agency 
  3.24  and do not have substantial design responsibility, or designers 
  3.25  who will or may be employed or consulted by the primary designer.
  3.26     (h) (j) "Project" means an undertaking to construct, erect, 
  3.27  or remodel a building by or for the state or an agency.  
  3.28     (i) (k) "User agency" means the agency undertaking a 
  3.29  specific project.  For projects undertaken by the state of 
  3.30  Minnesota, "user agency" means the Department of Administration 
  3.31  or a state agency with an appropriate delegation to act on 
  3.32  behalf of the Department of Administration. 
  3.33     Sec. 3.  [16C.32] [DESIGN-BUILD, CONSTRUCTION MANAGER AT 
  3.34  RISK, AND JOB ORDER CONTRACTING CONTRACTS.] 
  3.35     Subdivision 1.  [DEFINITIONS.] As used in sections 16C.32 
  3.36  to 16C.35, the following terms have the meanings given them, 
  4.1   unless the context clearly indicates otherwise: 
  4.2      (1) "acceptance" means a formal resolution of the 
  4.3   commissioner authorizing the execution of a design-build, 
  4.4   construction manager at risk, or job order contracting contract; 
  4.5      (2) "agency" means any state officer, employee, board, 
  4.6   commission, authority, department, or other agency of the 
  4.7   executive branch of state government.  Unless specifically 
  4.8   indicated otherwise, as used in sections 16C.32 to 16C.35, 
  4.9   agency also includes the Minnesota State Colleges and 
  4.10  Universities; 
  4.11     (3) "architect" means an architect or landscape architect 
  4.12  registered to practice under sections 326.02 to 326.15; 
  4.13     (4) "board" means the state Designer Selection Board, 
  4.14  unless the estimated cost of the project is less than 
  4.15  $2,000,000, in which case the commissioner may act as the board; 
  4.16     (5) "Capitol Area Architectural and Planning Board" means 
  4.17  the board established to govern the capitol area under chapter 
  4.18  15B; 
  4.19     (6) "commissioner" means the commissioner of administration 
  4.20  or the Board of Trustees of the Minnesota State Colleges and 
  4.21  Universities, whichever controls a project; 
  4.22     (7) "construction manager at risk" means a person who is 
  4.23  selected by the commissioner to act as a construction manager to 
  4.24  manage the construction process, which includes, but is not 
  4.25  limited to, responsibility for the price, schedule, and 
  4.26  workmanship of the construction performed in accordance with the 
  4.27  procedures of section 16C.34; 
  4.28     (8) "construction manager at risk contract" means a 
  4.29  contract for construction of a project between a construction 
  4.30  manager and the commissioner, which contract shall include a 
  4.31  guaranteed maximum price, construction schedule, and workmanship 
  4.32  of the construction performed; 
  4.33     (9) "design-build contract" means a contract between the 
  4.34  commissioner and a design-builder to furnish the architectural, 
  4.35  engineering, and related design services as well as the labor, 
  4.36  materials, supplies, equipment, and construction services for a 
  5.1   project; 
  5.2      (10) "design and price-based proposal" means the proposal 
  5.3   to be submitted by a design-builder in the design and 
  5.4   price-based selection process, as described in section 16C.33, 
  5.5   which proposal meets the requirements of section 16C.33, 
  5.6   subdivision 7, paragraph (c), in such detail as required in the 
  5.7   request for proposals; 
  5.8      (11) "design and price-based selection" means the selection 
  5.9   of a design-builder as described in section 16C.33, subdivision 
  5.10  8; 
  5.11     (12) "design criteria package" means performance criteria 
  5.12  prepared by a design criteria professional who shall be either 
  5.13  an employee of the commissioner or shall be selected in 
  5.14  compliance with section 16B.33, 16C.08, or 16C.095; 
  5.15     (13) "design criteria professional" means a person licensed 
  5.16  under chapter 326, or a person who employs an individual or 
  5.17  individuals licensed under chapter 326, required to design a 
  5.18  project, and who is employed by or under contract to the 
  5.19  commissioner to provide professional, architectural, or 
  5.20  engineering services in connection with the preparation of the 
  5.21  design criteria package; 
  5.22     (14) "guaranteed maximum price" means the maximum amount 
  5.23  that a design-builder, construction manager at risk, or 
  5.24  subcontractor will be paid pursuant to a contract to perform a 
  5.25  defined scope of work; 
  5.26     (15) "guaranteed maximum price contract" means a contract 
  5.27  under which a design-builder, construction manager, or 
  5.28  subcontractor is paid on the basis of their actual cost to 
  5.29  perform the work specified in the contract plus an amount for 
  5.30  overhead and profit, the sum of which must not exceed the 
  5.31  guaranteed maximum price set forth in the contract; 
  5.32     (16) "job order contracting" means a project delivery 
  5.33  method that requests a limited number of bids from a list of 
  5.34  qualified contractors, selected from a registry of qualified 
  5.35  contractors who have been prescreened and who have entered into 
  5.36  master contracts with the commissioner, as provided in section 
  6.1   16C.35; 
  6.2      (17) "past performance" or "experience" does not include 
  6.3   the exercise or assertion of a person's legal rights; 
  6.4      (18) "person" includes an individual, corporation, 
  6.5   partnership, association, or any other legal entity; 
  6.6      (19) "project" means an undertaking to construct, alter, or 
  6.7   enlarge a building, structure, or other improvements, except 
  6.8   highways and bridges, by or for the state or an agency; 
  6.9      (20) "qualifications-based selection" means the selection 
  6.10  of a design-builder as provided in section 16C.33; 
  6.11     (21) "request for qualifications" means the document or 
  6.12  publication soliciting qualifications for a design-build, 
  6.13  construction manager at risk, or job order contracting contract 
  6.14  as provided in sections 16C.33 to 16C.35; 
  6.15     (22) "request for proposals" means the document or 
  6.16  publication soliciting proposals for a design-build or 
  6.17  construction manager at risk contract as provided in sections 
  6.18  16C.33 and 16C.34; and 
  6.19     (23) "trade contract work" means the furnishing of labor, 
  6.20  materials, or equipment by contractors or vendors that are 
  6.21  incorporated into the completed project.  Work performed by 
  6.22  trade contractors involves specific portions of the project, but 
  6.23  not the entire project. 
  6.24     Subd. 2.  [AUTHORITY.] (a) Subject to limitations in 
  6.25  sections 16B.31, subdivision 1; 16B.33, subdivision 1; 16C.16; 
  6.26  and 16C.32 to 16C.34, and notwithstanding any other law to the 
  6.27  contrary, the commissioner may: 
  6.28     (1) solicit and award a design-build contract on the basis 
  6.29  of either a qualifications based or a design and price-based 
  6.30  selection process provided in section 16C.33 if the conditions 
  6.31  in clause (4) are met; 
  6.32     (2) select a construction manager at risk as provided in 
  6.33  section 16C.34, and award a guaranteed maximum price contract 
  6.34  for a construction manager at risk if the conditions of clause 
  6.35  (5) are met; 
  6.36     (3) select a contractor by a job order contracting delivery 
  7.1   method as provided in section 16C.35; 
  7.2      (4) the commissioner may not utilize design-build contracts 
  7.3   for more than five percent of its total projects let, by number, 
  7.4   in each of the fiscal years 2006 and 2007, and ten percent of 
  7.5   its total projects let, by number, in each fiscal year 
  7.6   thereafter, that are funded in whole or in part with proceeds 
  7.7   from the sale of state general obligation bonds; and 
  7.8      (5) the commissioner may not utilize construction manager 
  7.9   at risk contracts for more than five percent of its total 
  7.10  projects let, by number, in each of the fiscal years 2006 and 
  7.11  2007, and ten percent of its total projects let, by number, in 
  7.12  each fiscal year thereafter, that are funded in whole or in part 
  7.13  with proceeds from the sale of state general obligation bonds. 
  7.14     (b) Pursuant to section 16B.31, subdivision 4, if the 
  7.15  project is within the Capitol area, the project shall comply 
  7.16  with sections 15B.03, subdivision 3; 15B.08, subdivision 2; 
  7.17  15B.10; and 15B.15, subdivision 4. 
  7.18     (c) The commissioner shall, for each design-build or 
  7.19  construction manager at risk contract, make a written 
  7.20  determination, including specific findings, indicating whether 
  7.21  use of the design-build or construction manager at risk 
  7.22  procurement serves the public interest. 
  7.23     (d) The solicitation of requests for qualifications or 
  7.24  proposals does not obligate the commissioner to enter into a 
  7.25  design-build or construction manager at risk contract.  In 
  7.26  accordance with the stated criteria and subcriteria for 
  7.27  evaluating qualifications or proposals, the commissioner may 
  7.28  accept or reject any or all responses received as a result of 
  7.29  the request.  The solicitation for qualifications or proposals 
  7.30  may be canceled at any time in the commissioner's sole 
  7.31  discretion if it is considered to be in the public's best 
  7.32  interest.  If the commissioner rejects all responses or cancels 
  7.33  the solicitation for proposals, the commissioner may resolicit a 
  7.34  request for qualifications or proposals using the same or 
  7.35  different requirements or request selection of a primary 
  7.36  designer pursuant to section 16B.33, 16C.08, or 16C.095 and 
  8.1   proceed with competitive bidding pursuant to sections 16C.25 to 
  8.2   16C.29. 
  8.3      Sec. 4.  [16C.33] [DESIGN-BUILD.] 
  8.4      Subdivision 1.  [CONFLICT OF INTEREST.] A board member may 
  8.5   not participate in the review, discussion, or selection of a 
  8.6   primary designer, a design-builder, or a firm in which the 
  8.7   member has a financial interest. 
  8.8      Subd. 2.  [DESIGN BUILDER LICENSING REQUIREMENTS.] (a) Each 
  8.9   design-builder must be, employ, or have as a partner, member, 
  8.10  coventurer, or subcontractor, persons or a firm with persons who 
  8.11  are duly licensed and registered to provide the services 
  8.12  required to complete the project and do business in this state. 
  8.13     (b) A design-builder may contract with the commissioner to 
  8.14  provide professional or construction services for which the 
  8.15  design-builder is not itself licensed, registered, or qualified 
  8.16  to perform, so long as the design-builder provides such services 
  8.17  through subcontracts with duly licensed, registered, or 
  8.18  otherwise qualified persons in accordance with this section. 
  8.19     (c) Nothing in this section or section 16C.32 is intended 
  8.20  to limit or eliminate the responsibility or liability owed by an 
  8.21  architect or engineer on a design-build project to the 
  8.22  commissioner and third parties under existing law.  The design 
  8.23  service portion of a design-build contract is considered a 
  8.24  service and not a product. 
  8.25     Subd. 3.  [SOLICITATION OF QUALIFICATIONS OR PROPOSALS.] (a)
  8.26  Every user agency, except the Capitol Area Architectural and 
  8.27  Planning Board, shall submit a written request for a 
  8.28  design-builder for its project to the commissioner who shall 
  8.29  forward the request to the board, consistent with section 
  8.30  16B.33, subdivision 3a.  The University of Minnesota shall 
  8.31  follow the process in subdivision 4 to select design-builders 
  8.32  for projects that are subject to section 16B.33.  The written 
  8.33  request must include a description of the project, the total 
  8.34  project cost, a description of any special requirements or 
  8.35  unique features of the proposed project, and other information 
  8.36  requested by the board which will assist the board in carrying 
  9.1   out its duties and responsibilities set forth in this section. 
  9.2      (b) A request for qualifications or proposals soliciting 
  9.3   design-builders shall be prepared for each design-build contract 
  9.4   pursuant to subdivision 5 or 7.  The request for qualifications 
  9.5   or proposals shall contain, at a minimum, the following elements:
  9.6      (1) the identity of the agency for which the project will 
  9.7   be built and that will award the design-build contract; 
  9.8      (2) procedures for submitting qualifications or proposals, 
  9.9   the criteria for evaluation of qualifications or proposals and 
  9.10  the relative weight for each criterion and subcriterion, and the 
  9.11  procedures for making awards according to the stated criteria 
  9.12  and subcriteria, including a reference to the requirements of 
  9.13  this section; 
  9.14     (3) the proposed terms and conditions for the contract; 
  9.15     (4) the desired qualifications of the design-builder and 
  9.16  the desired or permitted areas of construction to be performed 
  9.17  by named members of the design-build team, if applicable.  The 
  9.18  primary designer shall be a named member of the design-build 
  9.19  team; 
  9.20     (5) the schedule for commencement and completion of the 
  9.21  project; 
  9.22     (6) any applicable budget limits for the project; 
  9.23     (7) the requirements for insurance and statutorily required 
  9.24  performance and payment bonds; 
  9.25     (8) the identification and location of any other 
  9.26  information in the possession or control of the agency that the 
  9.27  user agency determines is material, which may include surveys, 
  9.28  soils reports, drawings or models of existing structures, 
  9.29  environmental studies, photographs, or references to public 
  9.30  records; 
  9.31     (9) for a design-build and price-based selection process, 
  9.32  the request shall also include the design criteria package, 
  9.33  including the performance and technical requirements for the 
  9.34  project, and the functional and operational elements for the 
  9.35  delivery of the completed project.  The request shall also 
  9.36  contain a description of the drawings, specifications, or other 
 10.1   submittals to be included with the proposal, with guidance as to 
 10.2   the form and level of completeness of the drawings, 
 10.3   specifications or submittals that will be acceptable, and the 
 10.4   stipend to be paid to the design-builders selected to submit the 
 10.5   above described information; and 
 10.6      (10) the criteria shall not impose unnecessary conditions 
 10.7   beyond reasonable requirements to ensure maximum participation 
 10.8   of qualified design-builders. 
 10.9      (c) Notice of requests for qualifications or proposals must 
 10.10  be advertised in the State Register.  
 10.11     Subd. 4.  [UNIVERSITY OF MINNESOTA PROJECTS.] (a) The 
 10.12  University of Minnesota may elect to use the design-build method 
 10.13  of project delivery for projects involving construction or major 
 10.14  remodeling, as defined in section 16B.335, subdivision 1, with 
 10.15  an estimated cost greater than $2,000,000, in which case the 
 10.16  University of Minnesota shall submit a written request for a 
 10.17  design-builder to the commissioner of administration, who shall 
 10.18  forward the request to the board, as provided in subdivision 3.  
 10.19  For design-build projects undertaken by the University of 
 10.20  Minnesota under this subdivision, the Board of Regents shall 
 10.21  exercise the powers and duties of the commissioner granted in 
 10.22  subdivisions 5, 6, 7, and 8. 
 10.23     (b) When the University of Minnesota undertakes any other 
 10.24  project involving construction, renovation, repair, replacement, 
 10.25  or rehabilitation, the Board of Regents may, in addition to any 
 10.26  other method of project delivery available to the University of 
 10.27  Minnesota, submit a written request for a design-builder to the 
 10.28  commissioner of administration, who shall forward the request to 
 10.29  the board, as provided in subdivision 3. 
 10.30     (c) For projects for which the University of Minnesota 
 10.31  requests a design-builder, the University of Minnesota may use 
 10.32  either the design-build qualification-based selection process 
 10.33  under subdivision 5 or the design-build design and price-based 
 10.34  selection process under subdivision 7.  The board shall score 
 10.35  proposals in accordance with subdivision 5 or 7, as applicable, 
 10.36  and narrow the selection to the two highest scoring proposers 
 11.1   for recommendation to the Board of Regents.  The Board of 
 11.2   Regents shall make the final selection and shall notify the 
 11.3   board of the selection.  Meeting records or written evaluations 
 11.4   that document the final selection are public records. 
 11.5      (d) The University of Minnesota may not utilize 
 11.6   design-build contracts for more than five percent of its total 
 11.7   projects let, by number, in each of the fiscal years 2006 and 
 11.8   2007, and ten percent of its total projects let, by number, in 
 11.9   each fiscal year thereafter, that are funded in whole or in part 
 11.10  with proceeds from the sale of state general obligation bonds. 
 11.11     Subd. 5.  [DESIGN-BUILD QUALIFICATION-BASED SELECTION 
 11.12  PROCESS.] In a design-build qualification-based selection 
 11.13  process, the following shall apply: 
 11.14     (a)(1) the commissioner shall establish procedures for 
 11.15  determining the appropriate content of each request for 
 11.16  qualifications, the weighted criteria and subcriteria to be used 
 11.17  to evaluate the design-builders, and the procedures for 
 11.18  evaluating qualifications in an open, competitive, and objective 
 11.19  manner; (2) the criteria and subcriteria shall include, but are 
 11.20  not limited to, the proposer's experience as a constructor or 
 11.21  primary designer, including capacity of key personnel, technical 
 11.22  competence, capability to perform, the past performance of the 
 11.23  proposer and its employees, including its safety record and 
 11.24  compliance with state and federal law; and (3) the commissioner 
 11.25  shall issue a request for qualifications that includes the 
 11.26  information as described in subdivision 3. 
 11.27     (b) After obtaining and evaluating qualifications from each 
 11.28  design-builder, in accordance with the weighted criteria and 
 11.29  subcriteria and procedures set forth in the request for 
 11.30  qualifications, the board shall select a short list of at least 
 11.31  three and no more than five proposals.  The board must receive 
 11.32  at least three proposals from design-builders or the 
 11.33  commissioner shall either: 
 11.34     (1) solicit new proposals; 
 11.35     (2) revise the request for qualifications and thereafter 
 11.36  solicit new proposals using the revised request for 
 12.1   qualifications; or 
 12.2      (3) request selection of a primary designer pursuant to 
 12.3   section 16B.33, 16C.08, or 16C.095 and proceed with competitive 
 12.4   bidding pursuant to sections 16C.25 to 16C.29. 
 12.5      (c) The board shall conduct formal interviews with the 
 12.6   short list of proposers, but shall not disclose any proprietary 
 12.7   or confidential information contained in one proposal to another 
 12.8   proposer. 
 12.9      (d) The board shall select the design-builder that scores 
 12.10  the highest on the evaluation criteria and subcriteria.  The 
 12.11  commissioner shall make the award to the design-builder who 
 12.12  scores the highest score pursuant to the weighted criteria and 
 12.13  subcriteria as determined by the board, unless the commissioner 
 12.14  rejects all proposals or proceeds pursuant to paragraphs (f) and 
 12.15  (g).  In the case of the Minnesota State Colleges and 
 12.16  Universities, the board shall narrow the selection to the two 
 12.17  design-builders that score the highest on the evaluation 
 12.18  criteria and subcriteria for recommendation to the respective 
 12.19  commissioner, and the commissioner shall make the final 
 12.20  selection and shall notify the board of the selection. 
 12.21     (e) The commissioner shall conduct fee and contract 
 12.22  negotiations with the selected design-builder and shall enter 
 12.23  into the contract consistent with subdivision 6. 
 12.24     (f) If the selected design-builder declines the appointment 
 12.25  or is unable to reach agreement with the commissioner on the 
 12.26  terms of the contract, the commissioner may, within 60 days 
 12.27  after the first selection, request the board to make another 
 12.28  selection. 
 12.29     (g) If the board fails to make a selection and forward its 
 12.30  recommendation to the commissioner within 60 days of the request 
 12.31  for a second selection, the commissioner may appoint a 
 12.32  design-builder without the recommendation of the board. 
 12.33     (h) If a project for which a design-builder has been 
 12.34  selected by the board becomes inactive, lapses, or changes as 
 12.35  the result of a project phasing, insufficient appropriations, or 
 12.36  other reasons, the commissioner may, if the project is 
 13.1   reactivated, retain the same design-builder to complete the 
 13.2   project. 
 13.3      Subd. 6.  [DESIGN-BUILD QUALIFICATIONS-BASED ACCEPTANCE BY 
 13.4   COMMISSIONER.] The contract between the commissioner and the 
 13.5   design-builder selected under subdivision 5 shall require the 
 13.6   following: 
 13.7      (a) The design-builder shall develop design documents of 
 13.8   the project for review and approval by the commissioner prior to 
 13.9   project bidding. 
 13.10     (b) The design-builder shall competitively bid all trade 
 13.11  contract work for the project from a list of qualified firms, 
 13.12  subject to availability of such qualified firms for the specific 
 13.13  work.  The list of qualified firms shall be based upon an open, 
 13.14  competitive, and objective prequalification process in which the 
 13.15  selection criteria includes, in addition to the proposed price, 
 13.16  the firm's experience as a constructor or primary designer, 
 13.17  including capacity of key personnel, technical competence, 
 13.18  capability to perform, the past performance of the firm and its 
 13.19  employees, including its safety record and compliance with state 
 13.20  and federal law, and other considerations as defined by the 
 13.21  design-builder and the commissioner.  The design-builder and the 
 13.22  commissioner shall jointly determine the composition of the list 
 13.23  of qualified firms. 
 13.24     (c) With the approval of the commissioner, the 
 13.25  design-builder may name either or both a mechanical and 
 13.26  electrical subcontractor or subcontractors as a named member of 
 13.27  the design-builder's team, and if either or both a mechanical 
 13.28  and electrical subcontractor or subcontractors is so named, the 
 13.29  design-builder is not required to competitively bid the 
 13.30  mechanical or electrical trade contract work.  A named 
 13.31  mechanical or electrical subcontractor member of a 
 13.32  design-builder's team shall competitively bid all subcontracted 
 13.33  portions of the mechanical or electrical subcontractor's work 
 13.34  from a list of qualified firms.  Such qualified firms shall be 
 13.35  determined as described in paragraph (b).  The commissioner and 
 13.36  the design-builder shall agree to a list of materials and 
 14.1   equipment that shall be competitively bid. 
 14.2      (d) With the commissioner's approval or request, team 
 14.3   members of the design-builder, including the design-builder, may 
 14.4   also submit bids for trade contract work. 
 14.5      (e) Either or both the mechanical or electrical 
 14.6   subcontractor or subcontractors who are named subcontractor 
 14.7   members of the design-builder's team shall enter into guaranteed 
 14.8   maximum price contracts with the design-builder. 
 14.9      (f) The design-builder and the commissioner shall enter 
 14.10  into a guaranteed maximum price contract. 
 14.11     Subd. 7.  [DESIGN-BUILD AND PRICE-BASED PROPOSALS.] (a) In 
 14.12  a design and price-based selection process the following shall 
 14.13  apply: 
 14.14     (1) selection must be based on best value, which includes 
 14.15  an evaluation of price and design, and may include other 
 14.16  criteria including, but not limited to, the proposer's 
 14.17  experience as a constructor or primary designer; 
 14.18     (2) the commissioner shall establish procedures for 
 14.19  determining the appropriate content of each request for 
 14.20  qualifications, and the weighted criteria and subcriteria to be 
 14.21  used to evaluate the design-builders including, but not limited 
 14.22  to, the proposer's experience as a constructor or primary 
 14.23  designer, including capacity of key personnel, technical 
 14.24  competence, capability to perform, the past performance of the 
 14.25  proposer and its employees, including its safety record and 
 14.26  compliance with state and federal law, quality and past 
 14.27  performance, and the procedures for evaluating qualifications in 
 14.28  an open, competitive, and objective manner; and 
 14.29     (3) the commissioner shall issue a request for 
 14.30  qualifications that includes the information as described in 
 14.31  subdivision 3. 
 14.32     (b) After obtaining and evaluating qualifications from each 
 14.33  design-builder, in accordance with the weighted criteria and 
 14.34  subcriteria and procedures set forth in the request for 
 14.35  qualifications, the board shall select a short list of three 
 14.36  proposers.  The board must receive at least three proposals from 
 15.1   design-builders or the commissioner shall either: 
 15.2      (1) solicit new proposals; 
 15.3      (2) revise the request for qualifications and thereafter 
 15.4   solicit new proposals using the revised request for 
 15.5   qualifications; or 
 15.6      (3) request selection of a primary designer pursuant to 
 15.7   section 16B.33, 16C.08, or 16C.095 and proceed with competitive 
 15.8   bidding pursuant to sections 16C.25 to 16C.29. 
 15.9      (c) The commissioner shall issue a request for proposals to 
 15.10  the selected design-builders.  The submitted proposals shall 
 15.11  consist of, at a minimum, the following elements: 
 15.12     (1) preliminary plans and specifications and other 
 15.13  information in sufficient detail to describe the character, 
 15.14  quality, and scope of the project; 
 15.15     (2) a design and construction critical path schedule; 
 15.16     (3) the price at which the design-builder will complete all 
 15.17  design and construction requested in the proposal for the 
 15.18  project if selected; and 
 15.19     (4) other materials the board determines are necessary to 
 15.20  fix the design, schedule, and cost of the project. 
 15.21     (d) Proposals must be sealed and may not be opened until 
 15.22  the expiration of the time established for making proposals as 
 15.23  set forth in the request for proposals. 
 15.24     (e) Proposals must identify the primary designer and the 
 15.25  primary construction contracting entity that are members of the 
 15.26  design-builders team. 
 15.27     (f) The amount and type of design services requested by the 
 15.28  board shall not be exceeded by those submitting proposals.  
 15.29  Proposals exceeding the amount and type of design services 
 15.30  requested by the board may be rejected by the board.  Unless 
 15.31  compensated in excess of the minimum stipend for their effort, 
 15.32  design-builders must not be required to submit detailed 
 15.33  architectural or engineering design or construction documents as 
 15.34  part of the proposal. 
 15.35     (g) Except as described in paragraph (h), the commissioner 
 15.36  shall award to each design-builder that submits a responsive 
 16.1   design-build proposal under this subdivision, a stipend in an 
 16.2   amount of not less than 0.3 percent of the commissioner's 
 16.3   estimated cost of design and construction.  If the request for 
 16.4   proposals requires extensive design services beyond preliminary 
 16.5   plans and specifications as requested as part of the proposal, 
 16.6   the stipend shall be adjusted to an amount commensurate with the 
 16.7   amount of design services requested for each proposal. 
 16.8      (h) No stipend shall be awarded to the design-builder 
 16.9   selected to complete the project. 
 16.10     (i) For projects where the design-builder accepts the 
 16.11  stipend offered by the board, the commissioner shall be deemed 
 16.12  the owner of the design, subject to the rights of the proposer 
 16.13  to such design for publication and use in other projects.  
 16.14  However, the use of the design in its totality, or near 
 16.15  totality, by the commissioner is prohibited. 
 16.16     (j) The commissioner may require each design-builder to 
 16.17  submit with its proposal a cash deposit, letter of credit in a 
 16.18  form acceptable to the commissioner, or bid bond not to exceed 
 16.19  five percent of the maximum cost of the design-builder's 
 16.20  proposal.  If the proposal is accepted but the design-builder 
 16.21  fails, without good cause to execute the design-build contract, 
 16.22  the deposit or bond is forfeited in an amount not to exceed the 
 16.23  difference between the proposal in question and the next highest 
 16.24  proposal. 
 16.25     Subd. 8.  [DESIGN-BUILD AND PRICE-BASED SELECTION 
 16.26  PROCESS.] (a) The board shall review submissions as described in 
 16.27  subdivision 7; conduct formal interviews with all three 
 16.28  proposers but not allow the disclosure of any price, 
 16.29  proprietary, or confidential information contained in one 
 16.30  proposal to another proposer; and select the proposal that 
 16.31  scores the highest based on the weighted evaluation criteria and 
 16.32  subcriteria, except for projects under the control of Minnesota 
 16.33  State Colleges and Universities.  The commissioner shall make 
 16.34  the award to the design-builder who scores the highest score 
 16.35  pursuant to the weighted criteria and subcriteria as determined 
 16.36  by the board, unless the commissioner rejects all proposals or 
 17.1   proceeds pursuant to paragraph (c) or (d).  For Minnesota State 
 17.2   Colleges and Universities projects, the board shall narrow the 
 17.3   selection to the two highest scoring proposers for 
 17.4   recommendation to the commissioner, and the commissioner shall 
 17.5   review the submissions as described in subdivision 7; conduct 
 17.6   formal interviews with both proposers recommended by the board, 
 17.7   but not allow the disclosure of any price, proprietary, or 
 17.8   confidential information contained in one proposal to another 
 17.9   proposer; and select the proposal that scores the highest based 
 17.10  on the commissioner's application of the weighted evaluation 
 17.11  criteria and subcriteria; and shall notify the board of the 
 17.12  selection. 
 17.13     (b) After a proposal is accepted, the commissioner is 
 17.14  deemed the owner of the design, subject to the rights of the 
 17.15  proposer to such design for publication and use in other 
 17.16  projects. 
 17.17     (c) After a proposal is accepted, the commissioner and the 
 17.18  design-builder shall enter into a fixed-price contract. 
 17.19     (d) If the design-builder selected for a project declines 
 17.20  the appointment or is unable to reach agreement with the 
 17.21  commissioner concerning the terms of the contract, the 
 17.22  commissioner may, within 60 days after the first selection, 
 17.23  request the board to make another selection. 
 17.24     (e) If the design-builder selected for a project, prior to 
 17.25  executing a design-build contract, replaces either the primary 
 17.26  designer or the primary construction contracting entity, the 
 17.27  commissioner shall notify the board of the replacement and 
 17.28  request the board to either approve the new design-builder or to 
 17.29  select another design-builder. 
 17.30     (f) If the board fails to make a second selection as 
 17.31  described in paragraph (d) or (e) and forward its recommendation 
 17.32  to the commissioner within 60 days of the commissioner's request 
 17.33  for a second selection, the commissioner may appoint a 
 17.34  design-builder to the project without the recommendation of the 
 17.35  board. 
 17.36     Sec. 5.  [16C.34] [CONSTRUCTION MANAGER AT RISK.] 
 18.1      Subdivision 1.  [SOLICITATION OF QUALIFICATIONS.] (a) Every 
 18.2   user agency, except the Capitol Area Architectural and Planning 
 18.3   Board, shall submit a written request for proposals for a 
 18.4   construction manager at risk for its project to the 
 18.5   commissioner.  The written request for proposals must include a 
 18.6   description of the project, the estimated cost of completing the 
 18.7   project, a description of any special requirements or unique 
 18.8   features of the proposed project, and other information which 
 18.9   will assist the commissioner in carrying out its duties and 
 18.10  responsibilities set forth in this section. 
 18.11     (b) A request for qualifications shall be prepared for each 
 18.12  construction manager at risk contract as provided in this 
 18.13  section.  The request for qualifications shall contain, at a 
 18.14  minimum, the following elements: 
 18.15     (1) the identity of the agency for which the project will 
 18.16  be built and that will award the construction manager at risk 
 18.17  contract; 
 18.18     (2) procedures for submitting qualifications, the criteria 
 18.19  and subcriteria for evaluation of qualifications and the 
 18.20  relative weight for each criteria and subcriteria, and the 
 18.21  procedures for making awards in an open, competitive, and 
 18.22  objective manner, and according to the stated criteria and 
 18.23  subcriteria, including a reference to the requirements of this 
 18.24  section; 
 18.25     (3) the terms and conditions for the contract; 
 18.26     (4) the qualifications that the construction manager at 
 18.27  risk shall be desired to have; 
 18.28     (5) the desired or permitted areas of construction to be 
 18.29  performed by either or both the named mechanical and electrical 
 18.30  subcontractor or subcontractors to the construction manager at 
 18.31  risk, if applicable; 
 18.32     (6) a schedule for commencement and completion of the 
 18.33  project; 
 18.34     (7) any applicable budget limits for the project; 
 18.35     (8) requirements for insurance, statutorily required 
 18.36  performance and payment bonds; and 
 19.1      (9) identification and location of any other information in 
 19.2   the possession or control of the agency that the user agency 
 19.3   determines is material, which may include surveys, soils 
 19.4   reports, drawings or models of existing structures, 
 19.5   environmental studies, photographs, or references to public 
 19.6   records. 
 19.7      (b) Notice of requests for qualifications must be 
 19.8   advertised in the State Register.  
 19.9      Subd. 2.  [CONSTRUCTION MANAGER AT RISK SELECTION PROCESS.] 
 19.10  In a construction manager at risk selection process, the 
 19.11  following shall apply: 
 19.12     (a)(i) Upon receipt of a written request from a user agency 
 19.13  for a construction manager at risk for its project, the 
 19.14  commissioner shall create a selection committee composed of a 
 19.15  minimum of three persons, at least one of whom has construction 
 19.16  industry expertise; (ii) the selection committee shall establish 
 19.17  procedures for determining the appropriate content of each 
 19.18  request for qualifications, the weighted criteria and 
 19.19  subcriteria to be used to score the proposals of the 
 19.20  construction managers at risk, and shall establish procedures 
 19.21  for evaluating qualifications in an open, competitive, and 
 19.22  objective manner; and (iii) the commissioner shall issue a 
 19.23  request for qualifications that includes the information as 
 19.24  described in subdivision 1. 
 19.25     (b) In accordance with the criteria and procedures set 
 19.26  forth in the request for qualifications, the selection committee 
 19.27  shall evaluate the construction manager at risk's experience as 
 19.28  a constructor, including capacity of key personnel, technical 
 19.29  competence, capability to perform, the past performance of the 
 19.30  construction manager at risk and its employees, including its 
 19.31  safety record and compliance with state and federal law, and 
 19.32  other appropriate facts submitted by the construction manager at 
 19.33  risk in response to the request for qualifications.  The 
 19.34  commissioner must receive at least three proposals from 
 19.35  construction managers or the commissioner may either (i) solicit 
 19.36  new proposals; (ii) request the selection committee to revise 
 20.1   the request for qualifications and thereafter solicit new 
 20.2   proposals using the revised request for qualifications; (iii) 
 20.3   select another allowed procurement method; or (iv) reject all 
 20.4   proposals. 
 20.5      (c)(i) The selection committee shall review the proposers' 
 20.6   qualifications and create a short list of three to five 
 20.7   proposals of construction managers at risk; (ii) the 
 20.8   commissioner shall issue a request for proposal requiring fee 
 20.9   and expense proposals and other information as desired from the 
 20.10  short-listed construction managers at risk, which request shall 
 20.11  also include the fee and expense proposals from any named 
 20.12  mechanical or electrical subcontractor member of the 
 20.13  construction manager at risk's team; (iii) the selection 
 20.14  committee shall conduct formal interviews with the short-listed 
 20.15  construction managers at risk but shall not disclose any 
 20.16  proprietary or confidential information contained in one 
 20.17  proposal to another proposer; (iv) the selection committee shall 
 20.18  recommend the construction manager at risk achieving the highest 
 20.19  score on the evaluation criteria as described in subdivision 1, 
 20.20  paragraph (b). 
 20.21     (d) The board shall select the primary designer as 
 20.22  described in section 16B.33. 
 20.23     Subd. 3.  [CONSTRUCTION MANAGER AT RISK CONTRACT.] (a) The 
 20.24  commissioner shall conduct contract negotiations with the 
 20.25  recommended construction manager at risk. 
 20.26     (b) If the construction manager at risk selected for the 
 20.27  project declines the appointment or is unable to reach agreement 
 20.28  with the commissioner concerning the fee or terms of the 
 20.29  contract, the commissioner shall, within 60 days after the first 
 20.30  selection, request the selection committee to make another 
 20.31  recommendation. 
 20.32     (c) If the selection committee fails to make a second 
 20.33  recommendation and forward it to the commissioner within 60 days 
 20.34  of the commissioner's request for a second recommendation, the 
 20.35  commissioner may select a construction manager at risk without 
 20.36  the recommendation of the selection committee. 
 21.1      (d) The primary designer selected by the board shall 
 21.2   develop various design documents for review and approval by the 
 21.3   commissioner. 
 21.4      (e) With the approval of the commissioner, the construction 
 21.5   manager at risk proposal may name either or both a mechanical or 
 21.6   electrical subcontractor or subcontractors as a named member of 
 21.7   the construction at risk team, and except as described below, if 
 21.8   either or both a mechanical or electrical subcontractors or 
 21.9   subcontractor is so named, the construction manager at risk is 
 21.10  not required to competitively bid the mechanical or electrical 
 21.11  trade contract work.  The construction manager at risk shall 
 21.12  competitively bid all trade contract work for the project from a 
 21.13  list of qualified firms, subject to availability of such 
 21.14  qualified firms for the specific work.  The list of qualified 
 21.15  firms shall be based upon an open, competitive, and objective 
 21.16  prequalification process in which the selection criteria 
 21.17  includes the firm's experience as a constructor, including 
 21.18  capacity of key personnel, technical competence, capability to 
 21.19  perform, the past performance of the firm and its employees, 
 21.20  including its safety record and compliance with state and 
 21.21  federal law, and other considerations as defined by the 
 21.22  construction manager at risk and the commissioner.  The 
 21.23  construction manager at risk and the commissioner shall jointly 
 21.24  determine the composition of the list of qualified firms.  With 
 21.25  the commissioner's approval or request, the team members of the 
 21.26  construction manager at risk, including the construction manager 
 21.27  at risk, may also submit bids for trade contract work.  A named 
 21.28  mechanical or electrical subcontractor member of a construction 
 21.29  manager at risk's team shall competitively bid all subcontracted 
 21.30  portions of the mechanical or electrical subcontractor's work 
 21.31  from a list of qualified firms.  Such qualified firms must be 
 21.32  determined as described in this paragraph.  The commissioner and 
 21.33  the construction manager at risk shall agree to a list of 
 21.34  materials and equipment that shall be competitively bid.  
 21.35     (f) The named mechanical or electrical subcontractor 
 21.36  members of the construction manager's team shall enter into 
 22.1   guaranteed maximum price contracts with the construction manager 
 22.2   for the work identified in the construction manager at risk 
 22.3   proposal as work to be performed by the named subcontractors. 
 22.4      (g) The construction manager at risk and the commissioner 
 22.5   shall enter into a guaranteed maximum price contract for the 
 22.6   project. 
 22.7      Sec. 6.  [16C.35] [JOB ORDER CONTRACTING.] 
 22.8      Subdivision 1.  [AUTHORITY.] The commissioner may undertake 
 22.9   construction utilizing job order contracting for projects that 
 22.10  do not exceed a construction cost of $250,000. 
 22.11     Subd. 2.  [JOB ORDER CONTRACTING PRESELECTION PROCESS.] (a) 
 22.12  The commissioner is authorized to issue a request for 
 22.13  qualifications that includes the criteria that will be used for 
 22.14  the projects, provided that these criteria do not unduly 
 22.15  restrict competition. 
 22.16     (b) The request for qualifications must be publicized in a 
 22.17  manner designated by the commissioner.  To the extent practical, 
 22.18  this must include posting on a state Web site.  To the extent 
 22.19  practical, the commissioner must give notice to representatives 
 22.20  of targeted group businesses designated under section 16C.16.  
 22.21     (c) Contractors shall submit only qualifications to the 
 22.22  commissioner that are responsive to the request for 
 22.23  qualifications. 
 22.24     Subd. 3.  [QUALIFIED CONTRACTORS.] (a) The commissioner 
 22.25  shall review the responses to the request for qualifications and 
 22.26  determine responder's ability to enter into the master contract 
 22.27  that will be utilized for the projects.  The commissioner shall 
 22.28  establish a list of qualified contractors based on the 
 22.29  proposers' ability to enter into a master contract as described 
 22.30  in the request for qualifications. 
 22.31     (b) The commissioner shall enter into master contracts with 
 22.32  all qualified contractors. 
 22.33     Subd. 4.  [CONSTRUCTION SERVICES BIDDING.] The commissioner 
 22.34  shall request bids for construction services for any project 
 22.35  using job order contracting from qualified contractors as 
 22.36  follows: 
 23.1      (1) for construction projects up to a maximum cost of 
 23.2   $50,000, the commissioner shall request a minimum of two bids; 
 23.3      (2) for construction projects with a cost greater than 
 23.4   $50,000 but less than or equal to $100,000 the commissioner 
 23.5   shall request a minimum of three bids; 
 23.6      (3) for construction projects with a cost greater than 
 23.7   $100,000 but less than or equal to $250,000, the commissioner 
 23.8   shall request a minimum of four bids. 
 23.9      Subd. 5.  [QUALIFIED CONTRACTOR SELECTION.] The 
 23.10  commissioner shall select the contractor who submits the lowest 
 23.11  price bid for the construction services proposed. 
 23.12     Subd. 6.  [REASONABLE DISTRIBUTION OF BID REQUESTS AMONG 
 23.13  QUALIFIED CONTRACTORS.] The commissioner in requesting bidding 
 23.14  for projects using job order contracting as described in this 
 23.15  section shall develop a system to ensure a reasonable 
 23.16  opportunity for all qualified contractors to bid on construction 
 23.17  services on a periodic basis. 
 23.18     Sec. 7.  [EFFECTIVE DATE.] 
 23.19     Sections 1 to 6 are effective the day following final 
 23.20  enactment.