HF 1355

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to education finance; authorizing a school
district to build a school building using design-build
construction techniques; amending Minnesota Statutes
2004, sections 123B.52, subdivision 1; 471.345, by
adding a subdivision; proposing coding for new law in
Minnesota Statutes, chapter 123B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 123B.52,
subdivision 1, is amended to read:

Subdivision 1.

Contracts.

A contract for work or labor,
or for the purchase of furniture, fixtures, or other property,
except books registered under the copyright laws, or for the
construction or repair of school houses new text begin not covered under
sections 123B.525 to 123B.5258 new text end , the estimated cost or value of
which shall exceed that specified in section 471.345,
subdivision 3, must not be made by the school board without
first advertising for bids or proposals by two weeks' published
notice in the official newspaper. This notice must state the
time and place of receiving bids and contain a brief description
of the subject matter.

Additional publication in the official newspaper or
elsewhere may be made as the board shall deem necessary.

After taking into consideration conformity with the
specifications, terms of delivery, and other conditions imposed
in the call for bids, every such contract must be awarded to the
lowest responsible bidder, be duly executed in writing, and be
otherwise conditioned as required by law. The person to whom
the contract is awarded shall give a sufficient bond to the
board for its faithful performance. Notwithstanding section
574.26 or any other law to the contrary, on a contract limited
to the purchase of a finished tangible product, a board may
require, at its discretion, a performance bond of a contractor
in the amount the board considers necessary. A record must be
kept of all bids, with names of bidders and amount of bids, and
with the successful bid indicated thereon. A bid containing an
alteration or erasure of any price contained in the bid which is
used in determining the lowest responsible bid must be rejected
unless the alteration or erasure is corrected as provided in
this section. An alteration or erasure may be crossed out and
the correction thereof printed in ink or typewritten adjacent
thereto and initialed in ink by the person signing the bid. In
the case of identical low bids from two or more bidders, the
board may, at its discretion, utilize negotiated procurement
methods with the tied low bidders for that particular
transaction, so long as the price paid does not exceed the low
tied bid price. In the case where only a single bid is
received, the board may, at its discretion, negotiate a mutually
agreeable contract with the bidder so long as the price paid
does not exceed the original bid. If no satisfactory bid is
received, the board may readvertise. Standard requirement price
contracts established for supplies or services to be purchased
by the district must be established by competitive bids. Such
standard requirement price contracts may contain escalation
clauses and may provide for a negotiated price increase or
decrease based upon a demonstrable industrywide or regional
increase or decrease in the vendor's costs. Either party to the
contract may request that the other party demonstrate such
increase or decrease. The term of such contracts must not
exceed two years with an option on the part of the district to
renew for an additional two years. Contracts for the purchase
of perishable food items, except milk for school lunches and
vocational training programs, in any amount may be made by
direct negotiation by obtaining two or more written quotations
for the purchase or sale, when possible, without advertising for
bids or otherwise complying with the requirements of this
section or section 471.345, subdivision 3. All quotations
obtained shall be kept on file for a period of at least one year
after receipt.

Every contract made without compliance with the provisions
of this section shall be void. Except in the case of the
destruction of buildings or injury thereto, where the public
interest would suffer by delay, contracts for repairs may be
made without advertising for bids.

Sec. 2.

new text begin [123B.525] TITLE.
new text end

new text begin Sections 123B.5251 to 123B.5259 may be referred to as the
Minnesota school facility design-build program.
new text end

Sec. 3.

new text begin [123B.5251] DESIGN-BUILD CONSTRUCTION CONTRACTS;
DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Terms defined. new text end

new text begin The terms used in sections
123B.5251 to 123B.5259 have the meanings given in this section.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the
commissioner of education.
new text end

new text begin Subd. 3. new text end

new text begin Criteria developer. new text end

new text begin "Criteria developer" means
an architect or engineer who holds a license under chapter 326.
new text end

new text begin Subd. 4. new text end

new text begin Design-build contract. new text end

new text begin "Design-build contract"
means a single contract between a school board and a
design-build company or firm to furnish the architectural or
engineering and related design services as well as the labor,
material, supplies, equipment, and construction services for a
school construction project.
new text end

new text begin Subd. 5. new text end

new text begin Design-build firm. new text end

new text begin "Design-build firm" means a
proprietorship, partnership, limited liability partnership,
joint venture, corporation, any type of limited liability
company, professional corporation, or any legal entity.
new text end

new text begin Subd. 6. new text end

new text begin Design professional. new text end

new text begin "Design professional"
means a person who holds a license under chapter 326 that is
required to be registered under Minnesota law.
new text end

new text begin Subd. 7. new text end

new text begin Design-build school construction
project. new text end

new text begin "Design-build school construction project" means the
procurement of both the design and construction of a school
facility project in a single contract with a company or
companies capable of providing the necessary engineering
services and construction.
new text end

new text begin Subd. 8. new text end

new text begin Design-builder. new text end

new text begin "Design-builder" means the
design-build firm that proposes to design and build a school
project governed by the procedures of this section.
new text end

new text begin Subd. 9. new text end

new text begin Request for proposals or rfp. new text end

new text begin "Request for
proposals" or "RFP" means the document by which the school board
solicits proposals from prequalified design-build firms to
design and construct the school project.
new text end

new text begin Subd. 10. new text end

new text begin Request for qualifications or rfq. new text end

new text begin "Request
for qualifications" or "RFQ" means a document to prequalify and
short-list potential design-build firms.
new text end

new text begin Subd. 11. new text end

new text begin School board. new text end

new text begin "School board" means the board
of directors of an independent, common, or special school
district.
new text end

Sec. 4.

new text begin [123B.5252] DESIGN-BUILD AUTHORITY; BEST VALUE
SELECTION.
new text end

new text begin Notwithstanding section 123B.52 or 471.345, or any other
law to the contrary, a school board may solicit and award a
design-build contract for a project on the basis of a best value
selection process according to the provisions of sections
123B.5251 to 123B.5259. To proceed under sections 123B.5251 to
123B.5259, the school must notify the commissioner of the
board's intent to use design-build authority on the school
facility, the project must have received a positive review and
comment under section 123B.70, and the project must be
authorized in accordance with chapter 475.
new text end

Sec. 5.

new text begin [123B.5253] DETERMINATION TO USE DESIGN-BUILD
SELECTION METHOD.
new text end

new text begin Subdivision 1. new text end

new text begin General criteria. new text end

new text begin A design-build
contracting procedure authorized under sections 123B.5251 to
123B.5259 may be used for a specific project only after a school
board determines that awarding a design-build contract will
serve the public interest.
new text end

new text begin Subd. 2. new text end

new text begin Specific criteria. new text end

new text begin A school board shall use the
following criteria as the minimum basis for determining when to
use the design-build method of project delivery:
new text end

new text begin (1) the extent to which it can adequately define the
project requirements in a proposed scope of the design and
construction desired;
new text end

new text begin (2) the time constraints for delivery of the project;
new text end

new text begin (3) the capability and experience of potential contractors
with the design-build method of project delivery or similar
experience;
new text end

new text begin (4) the suitability of the project for use of the
design-build method of project delivery with respect to time,
schedule, costs, and quality factors;
new text end

new text begin (5) the capability of the school board to manage the
project, including the employment of experienced personnel or
outside consultants;
new text end

new text begin (6) the capability of the school board to oversee the
project with individuals or design-build firms who are familiar
and experienced with the design-build method of project delivery
or similar experience;
new text end

new text begin (7) the original character of the product or the services;
and
new text end

new text begin (8) the project may be for no more than $5,000,000.
new text end

Sec. 6.

new text begin [123B.5254] DESIGN-BUILD NOTICE AND REPORT.
new text end

new text begin A school board shall summarize in a written statement its
reasons for proposing to use the design-build construction
contracting procedure. This statement, along with other
relevant information describing the project, must be made
available upon request to interested parties.
new text end

Sec. 7.

new text begin [123B.5255] LICENSING REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Licensed professional required. new text end

new text begin Each
design-builder shall employ, or have as a partner, member,
officer, coventurer, or subcontractor, a person duly licensed
and registered to provide the design services required to
complete the project and do business in the state.
new text end

new text begin Subd. 2. new text end

new text begin Contracting for licensed professional. new text end

new text begin A
design-builder may enter into a contract to provide professional
or construction services for a project that the design-builder
is not licensed, registered, or qualified to perform, so long as
the design-builder provides those services through
subcontractors with duly licensed, registered, or otherwise
qualified individuals in accordance with sections 123B.5251 to
123B.5259.
new text end

new text begin Subd. 3. new text end

new text begin Liability. new text end

new text begin (a) Nothing in this section
authorizing design-build contracts is intended to limit or
eliminate the responsibility or liability owed by a professional
on a design-build project to the state, county, or city, or
other third parties under existing law.
new text end

new text begin (b) The design service portion of a design-build contract
must be considered a service and not a product.
new text end

Sec. 8.

new text begin [123B.5256] DESIGN-BUILD RFQ; CRITERIA DEVELOPER;
EVALUATION.
new text end

new text begin Subdivision 1. new text end

new text begin Two-phase procedure. new text end

new text begin If the school board
determines that the design-build best value method of project
delivery is appropriate for a project, the school board shall
establish a two-phase procedure for awarding the design-build
contract as described in this section and section 123B.5257.
new text end

new text begin Subd. 2. new text end

new text begin Criteria developer. new text end

new text begin During the phase one RFQ
and before solicitation, the school board may hire a criteria
developer to help the school board develop the contents of the
RFQ. A criteria developer may not participate in the review or
discussion of responses to an RFQ or RFP when the member has a
financial interest in any of the design-build firms that respond
to the RFP. "Financial interest" includes, but is not limited
to, being or serving as an owner, employee, partner, limited
liability partner, shareholder, joint venturer, family member,
officer, or director of a design-build firm responding to an RFP
for a specific project, or having any other economic interest in
the design-build firm. The criteria developer must be treated
as a school district employee in the event of litigation
resulting from any action arising out of the criteria
developer's service to the school board.
new text end

new text begin Subd. 3. new text end

new text begin Contents. new text end

new text begin The school board shall prepare an RFQ.
The RFQ must include the following:
new text end

new text begin (1) the minimum qualifications of design-builders necessary
to meet the requirements for acceptance;
new text end

new text begin (2) a scope of work statement and schedule;
new text end

new text begin (3) documents defining the project requirements;
new text end

new text begin (4) the form of contract to be awarded;
new text end

new text begin (5) the weighted selection criteria for compiling a short
list and the number of firms to be included in the short list,
which must be at least one but not more than three;
new text end

new text begin (6) a description of the RFP requirements;
new text end

new text begin (7) the maximum time allowed for design and construction;
new text end

new text begin (8) the school board's estimated cost of design and
construction; and
new text end

new text begin (9) requirements for construction experience, design
experience, financial, personnel, and equipment resources
available from potential design-builders for the project and
experience in other education design-build projects or similar
projects, provided that these requirements may not unduly
restrict competition.
new text end

new text begin Subd. 4. new text end

new text begin Evaluation. new text end

new text begin The school board and criteria
developer, if a criteria developer was hired by the school
board, shall evaluate the design-build qualifications of
responding firms and shall compile a short list of no more than
three most highly qualified firms in accordance with
qualifications criteria described in the RFQ. If only one
design-build firm responds to the RFQ or remains on the short
list, the school board may readvertise or cancel the project as
the school board deems necessary.
new text end

Sec. 9.

new text begin [123B.5257] RFP FOR DESIGN-BUILD.
new text end

new text begin During phase two, the school board shall issue an RFP to
the design-builders on the short list. The request must include:
new text end

new text begin (1) the scope of work, which may include:
new text end

new text begin (i) performance and technical requirements;
new text end

new text begin (ii) conceptual design;
new text end

new text begin (iii) specifications; and
new text end

new text begin (iv) functional and operational elements for the delivery
of the completed project, which must be prepared by a registered
or licensed professional engineer;
new text end

new text begin (2) a description of the qualifications required of the
design-builder, including the weight or relative order, or both,
of each criterion;
new text end

new text begin (3) copies of the contract documents that the successful
proposer will be expected to sign;
new text end

new text begin (4) the maximum time allowable for design and construction;
new text end

new text begin (5) the project's estimated cost of design and
construction;
new text end

new text begin (6) the requirement that a submitted proposal be segmented
into two parts, a technical proposal and a price proposal;
new text end

new text begin (7) the requirement that each proposal be in a separately
sealed, clearly identified package and include the date and time
of the submittal deadline;
new text end

new text begin (8) the requirement that the price proposal contain all
design, construction, engineering, inspection, and construction
costs of the proposed project;
new text end

new text begin (9) the date, time, and location of the public opening of
the sealed price proposals; and
new text end

new text begin (10) other information relevant to the project.
new text end

Sec. 10.

new text begin [123B.5258] DESIGN-BUILD AWARD.
new text end

new text begin Subdivision 1. new text end

new text begin Award; computation; announcement. new text end

new text begin (a)
Except as provided in subdivision 2, a design-build contract
shall be awarded according to paragraphs (b) to (d).
new text end

new text begin (b) The school board and criteria developer shall score the
technical proposals using the selection criteria in the RFP.
The school board shall reject any proposal it deems
nonresponsive.
new text end

new text begin (c) The school board shall announce the technical proposal
score for each design-builder, publicly open the sealed price
proposals, and divide each design-builder's price by the
technical score that the school board has given to it to obtain
an adjusted score. The design-builder selected must be the
responsive and responsible design-builder whose adjusted score
is the lowest.
new text end

new text begin (d) Unless all proposals are rejected, the school board
shall award the contract to the responsive and responsible
design-builder with the lowest adjusted price. The school board
reserves the right to reject all proposals.
new text end

new text begin Subd. 2. new text end

new text begin Low-bid, design-build process. new text end

new text begin (a) The school
board may also use low-bid, design-build procedures to award a
design-build contract where the scope of the work can be clearly
defined.
new text end

new text begin (b) Low-bid, design-build projects must require an RFP.
new text end

new text begin (c) A proposal submitted under this subdivision must
include a technical proposal separate from a price proposal.
The low-bid, design-build procedures must follow a two-step
process for review of the responses to the RFP as follows:
new text end

new text begin (1) review of the technical proposal by the school board.
The school board must open the technical proposal first and must
determine if it complies with the requirements of the RFP and is
responsive. The school board may not perform any ranking or
scoring of the technical proposals; and
new text end

new text begin (2) determination of the low bidder based on the price
proposal. The school board may not open the price proposal
until the review of the technical proposal is complete.
new text end

new text begin (d) The contract award under low-bid, design-build
procedures must be made to the proposer whose sealed bid is
responsive to the technical requirements as determined by the
school board and is also the lowest bid.
new text end

new text begin Subd. 3. new text end

new text begin Rejection of bids. new text end

new text begin The school board may reject
all bids under this section.
new text end

Sec. 11.

new text begin [123B.5259] REPORT.
new text end

new text begin A school district that uses a design-build contract must
submit to the commissioner a yearly listing of all executed
design-build contracts. The report must identify the
contractor, contract amount, duration, and services provided.
The commissioner must summarize this information for the state's
school districts and post this information on the department's
Web site.
new text end

Sec. 12.

Minnesota Statutes 2002, section 471.345, is
amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Contract exceptions. new text end

new text begin A design-build contract
entered into under sections 123B.525 to 123B.5258 by a school
board is exempt from the provisions of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end