1.1A bill for an act1.2relating to highways; establishing a pilot program to authorize use of a 1.3design-build contracting process for certain highway construction projects.1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.5    Section 1. DESIGN-BUILD PILOT PROGRAM.1.6    Subdivision 1.Definitions.The following terms have the meanings given:1.7(1) "commissioner" means the commissioner of transportation;1.8(2) "municipality" means the board of commissioners of Anoka or Dakota County;1.9(3) "design-build contract" means a single contract between a municipality and a 1.10design-build company or firm to furnish the architectural or engineering and related design 1.11services as well as the labor, material, supplies, equipment, and construction services 1.12for a pilot project;1.13(4) "design-build firm" means a proprietorship, partnership, limited liability 1.14partnership, joint venture, corporation, any type of limited liability company, professional 1.15corporation, or any legal entity;1.16(5) "design professional" means a person who holds a license under Minnesota 1.17Statutes, chapter 326B, that is required to be registered under Minnesota law;1.18(6) "design-build transportation project" means the procurement of both the design 1.19and construction of a pilot project in a single contract with a company or companies 1.20capable of providing the necessary engineering services and construction;1.21(7) "design-builder" means the design-build firm that proposes to design and build a 1.22pilot project governed by the procedures of this section;1.23(8) "pilot project" means (1) the reconstruction of the intersection at marked 1.24Trunk Highway 10 and Anoka County State-Aid Highway 83, or (2) construction of 2.1an interchange at marked Trunk Highway 13 and Dakota County State-Aid Highway 5 2.2in Burnsville;2.3(9) "request for proposals" or "RFP" means the document by which the municipality 2.4solicits proposals from qualified design-build firms to design and construct a pilot project;2.5(10) "request for qualifications" or "RFQ" means a document to qualify potential 2.6design-build firms; and2.7(11) "responsive proposal" means a technical proposal of which no major component 2.8contradicts the goals of the project, significantly violates an RFP requirement, or places 2.9conditions on a proposal.2.10    Subd. 2.Pilot program established.(a) Each municipality may participate in a 2.11design-build contracting pilot program as provided in this section. If either municipality 2.12determines to participate, the commissioner and each participating municipality shall 2.13conduct a design-build contracting pilot program to support and evaluate the use of the 2.14design-build method of contracting by counties and statutory and home rule charter cities 2.15in constructing, improving, and maintaining streets and highways on the state-aid system.2.16(b) Subject to the requirements of this section and as appropriate under that 2.17municipality's jurisdiction, a municipality may use the design-build method of contracting 2.18for (1) reconstruction of the intersection at marked Trunk Highway 10 and Anoka County 2.19State-Aid Highway 83, and (2) construction of an interchange at marked Trunk Highway 2.2013 and Dakota County State-Aid Highway 5 in Burnsville.2.21    Subd. 3.Licensing requirements. (a) Each design-builder shall employ, or have 2.22as a partner, member, officer, coventurer, or subcontractor, a person duly licensed and 2.23registered to provide the design services required to complete the project and do business 2.24in the state.2.25 (b) A design-builder may enter into a contract to provide professional or construction 2.26services for a project that the design-builder is not licensed, registered, or qualified to 2.27perform, so long as the design-builder provides those services through subcontractors with 2.28duly licensed, registered, or otherwise qualified individuals in accordance with Minnesota 2.29Statutes, sections 161.3410 to 161.3428.2.30(c) Nothing in this section authorizing design-build contracts is intended to limit or 2.31eliminate the responsibility or liability owed by a professional on a design-build project to 2.32the state, municipality, or other third party under existing law.2.33(d) The design service portion of a design-build contract must be considered a 2.34service and not a product.2.35    Subd. 4.Information session for municipal engineer.The commissioner or the 2.36commissioner's designee with design-build experience shall conduct an information 3.1session for the municipality's engineer for each pilot project, in which issues unique to 3.2design-build must be discussed, including, but not limited to, writing an RFP, project 3.3oversight requirements, assessing risk, and communication with the design-build firm. 3.4After participation in the information session, the municipality's engineer may solicit 3.5proposals under subdivision 6 for the pilot project.3.6    Subd. 5.Technical Review Committee.During the phase one RFQ and before 3.7solicitation, the municipality shall appoint a Technical Review Committee of at least 3.8five individuals. The Technical Review Committee must include an individual whose 3.9name and qualifications are submitted to the municipality by the Minnesota chapter of 3.10the Associated General Contractors, after consultation with other commercial contractor 3.11associations in the state. Members of the Technical Review Committee who are not state 3.12employees are subject to the Minnesota Government Data Practices Act and Minnesota 3.13Statutes, section 16C.06, to the same extent that state agencies are subject to those 3.14provisions. A Technical Review Committee member may not participate in the review or 3.15discussion of responses to the RFQ or RFP when a design-build firm in which the member 3.16has a financial interest has responded to the RFQ or RFP. "Financial interest" includes, 3.17but is not limited to, being or serving as an owner, employee, partner, limited liability 3.18partner, shareholder, joint venturer, family member, officer, or director of a design-build 3.19firm responding to an RFQ or RFP for a specific project, or having any other economic 3.20interest in that design-build firm. The members of the Technical Review Committee must 3.21be treated as municipal employees in the event of litigation resulting from any action 3.22arising out of their service on the committee.3.23    Subd. 6.Phase one; design-build RFQ.The municipality shall prepare an RFQ, 3.24which must include the following:3.25(1) the minimum qualifications of design-builders necessary to meet the requirements 3.26for acceptance;3.27(2) a scope of work statement and schedule;3.28(3) documents defining the project requirements;3.29(4) the form of contract to be awarded;3.30(5) the weighted selection criteria for compiling a short list and the number of firms 3.31to be included in the short list, which must be at least two but not more than five;3.32(6) a description of the request for proposals (RFP) requirements;3.33(7) the maximum time allowed for design and construction;3.34(8) the municipality's estimated cost of design and construction;3.35(9) requirements for construction experience, design experience, financial, personnel, 3.36and equipment resources available from potential design-builders for the project and 4.1experience in other design-build transportation projects or similar projects, provided that 4.2these requirements may not unduly restrict competition; and4.3(10) a statement that "past performance" or "experience" or other criteria used in the 4.4RFQ evaluation process does not include the exercise or assertion of a person's legal rights.4.5    Subd. 7.Information session for prospective design-build firms.After an RFQ 4.6solicitation for a pilot project is made, any prospective design-build firm shall attend a 4.7design-build information session conducted by the commissioner or the commissioner's 4.8designee with design-build experience. The information must include information about 4.9design-build contracts, including, but not limited to, communication with partner firms, 4.10project oversight requirements, assessing risk, and communication with the municipality's 4.11engineer. After participation in the information session, the design-build firm is eligible 4.12to bid on the pilot project and any future design-build pilot program projects under this 4.13section.4.14    Subd. 8.Evaluation; short list.The selection team shall evaluate the design-build 4.15qualifications of responding firms and shall compile a short list of no more than five 4.16most highly qualified firms in accordance with qualifications criteria described in the 4.17RFQ. If only one design-build firm responds to the RFQ or remains on the short list, the 4.18municipality may readvertise or cancel the project as the municipality deems necessary.4.19    Subd. 9.Phase two; design-build RFP.The municipality shall prepare an RFP, 4.20which must include:4.21(1) the scope of work, including (i) performance and technical requirements, (ii) 4.22conceptual design, (iii) specifications, and (iv) functional and operational elements for 4.23the delivery of the completed project, all of which must be prepared by a registered or 4.24licensed professional engineer;4.25(2) copies of the contract documents that the successful proposer will be expected to 4.26sign;4.27(3) the maximum time allowable for design and construction;4.28(4) the road authority's estimated cost of design and construction;4.29(5) the requirement that a submitted proposal be segmented into two parts, a 4.30technical proposal and a price proposal;4.31(6) the requirement that each proposal be in a separately sealed, clearly identified 4.32package and include the date and time of the submittal deadline;4.33(7) the requirement that the technical proposal include a critical path method, 4.34bar schedule of the work to be performed, or similar schematic; preliminary design 4.35plans and specifications; technical reports; calculations; permit requirements; applicable 4.36development fees; and other data requested in the RFP;5.1(8) the requirement that the price proposal contain all design, construction, 5.2engineering, inspection, and construction costs of the proposed project;5.3(9) the date, time, and location of the public opening of the sealed price proposals; 5.4(10) the amount of, and eligibility for, a stipulated fee;5.5(11) other information relevant to the project; and5.6(12) a statement that "past performance," "experience," or other criteria used in the 5.7RFP evaluation process does not include the exercise or assertion of a person's legal rights.5.8    Subd. 10.Design-build award; computation; announcement.(a) A design-build 5.9contract must be awarded as follows.5.10(b) The Technical Review Committee shall score the technical proposals of the 5.11proposers selected under subdivision 8 using the selection criteria in the RFP. The 5.12Technical Review Committee shall then submit a technical proposal score for each 5.13design-builder to the municipality. The Technical Review Committee shall reject any 5.14nonresponsive proposal. The municipality shall review the technical proposal scores.5.15(c) The commissioner or the commissioner's designee shall review the technical 5.16proposal scores. The commissioner shall submit the final technical proposal scores to the 5.17municipality.5.18(d) The municipality shall announce the technical proposal score for each 5.19design-builder and shall publicly open the sealed price proposals and shall divide each 5.20design-builder's price by the technical score that the commissioner has given to it to obtain 5.21an adjusted score. The design-builder selected must be that responsive and responsible 5.22design-builder whose adjusted score is the lowest.5.23(e) If a time factor is included with the selection criteria in the RFP package, the 5.24municipality may use a value of the time factor established by the municipality as a 5.25criterion in the RFP.5.26(f) Unless all proposals are rejected, the municipality shall award the contract 5.27to the responsive and responsible design-builder with the lowest adjusted score. The 5.28municipality shall reserve the right to reject all proposals.5.29(g) The municipality shall award a stipulated fee not less than two-tenths of 5.30one percent of the municipality's estimated cost of design and construction to each 5.31short-listed, responsible proposer who provides a responsive but unsuccessful proposal. 5.32If the municipality does not award a contract, all short-listed proposers must receive the 5.33stipulated fee. If the municipality cancels the contract before reviewing the technical 5.34proposals, the municipality shall award each design-builder on the short list a stipulated 5.35fee of not less than two-tenths of one percent of the municipality's estimated cost of 5.36design and construction. The municipality shall pay the stipulated fee to each proposer 6.1within 90 days after the award of the contract or the decision not to award a contract. 6.2In consideration for paying the stipulated fee, the municipality may use any ideas or 6.3information contained in the proposals in connection with any contract awarded for the 6.4project or in connection with a subsequent procurement, without any obligation to pay 6.5any additional compensation to the unsuccessful proposers. Notwithstanding the other 6.6provisions of this subdivision, an unsuccessful short-list proposer may elect to waive 6.7the stipulated fee. If an unsuccessful short-list proposer elects to waive the stipulated 6.8fee, the municipality may not use ideas and information contained in that proposer's 6.9proposal. Upon the request of the municipality, a proposer who waived a stipulated fee 6.10may withdraw the waiver, in which case the municipality shall pay the stipulated fee to the 6.11proposer and thereafter may use ideas and information in the proposer's proposal.6.12    Subd. 11.Low-bid design-build process.(a) The municipality may also use 6.13low-bid, design-build procedures to award a design-build contract where the scope of 6.14the work can be clearly defined.6.15(b) Low-bid design-build projects may require an RFQ and short-listing, and must 6.16require an RFP.6.17(c) Submitted proposals under this subdivision must include separately a technical 6.18proposal and a price proposal. The low-bid, design-build procedures must follow a 6.19two-step process for review of the responses to the RFP as follows:6.20(1) the first step is the review of the technical proposal by the Technical Review 6.21Committee as provided in subdivision 5. The Technical Review Committee must open 6.22the technical proposal first and must determine if it complies with the requirements of the 6.23RFP and is responsive. The Technical Review Committee may not perform any ranking 6.24or scoring of the technical proposals; and6.25(2) the second step is the determination of the low bidder based on the price 6.26proposal. The municipality may not open the price proposal until the review of the 6.27technical proposal is complete.6.28(d) The contract award under low-bid, design-build procedures must be made to the 6.29proposer whose sealed bid is responsive to the technical requirements as determined by 6.30the Technical Review Committee and that is also the lowest bid.6.31(e) A stipulated fee may be paid for unsuccessful bids on low-bid, design-build 6.32projects only when the municipality has required an RFQ and short-listed the most highly 6.33qualified responsive bidders.6.34    Subd. 12.Legislative report.By December 15, 2011, the commissioner shall 6.35submit a report on the pilot program to the chairs and ranking minority members of the 7.1house of representatives and senate committees with jurisdiction over transportation 7.2policy and finance. The report must, at a minimum:7.3(1) summarize each pilot project, including the contracting process and project costs;7.4(2) evaluate the process and results applying the performance-based measures with 7.5which the commissioner evaluates trunk highway design-build projects; and7.6(3) identify any recommendations for future legislation.7.7EFFECTIVE DATE.This section is effective the day following final enactment.