HF 1547

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:52am

A bill for an act
relating to transportation; creating pilot program to authorize and evaluate use of
design-build method of contracting by municipalities; requiring report.

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

Section 1. new text begin DESIGN-BUILD PROJECT SELECTION COUNCIL.
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new text begin Subdivision 1. new text end

new text begin Establishment of council. new text end

new text begin A Design-Build Project Selection Council
is established to select, evaluate, and support county and municipal transportation projects
on the state-aid system that are conducive to use of the design-build method of contracting
under the design-build contracting pilot program, and to report to the legislature.
new text end

new text begin Subd. 2. new text end

new text begin Duties of council. new text end

new text begin In order to accomplish these purposes, the council shall:
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new text begin (1) review applications for participation received by the commissioner of
transportation from counties and cities;
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new text begin (2) select for participation in the pilot program a maximum of 15 projects on the
state-aid system, no more than ten of which may be on the county state-aid highway
system, and no more than ten of which may be on the municipal state-aid street system;
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new text begin (3) determine that the use of design-build in the selected projects would serve the
public interest, after considering, at a minimum:
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new text begin (i) the extent to which the municipality can adequately define the project
requirements in a proposed scope of the design and construction desired;
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new text begin (ii) the time constraints for delivery of the project;
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new text begin (iii) the capability of potential contractors with the design-build method of project
delivery;
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new text begin (iv) the suitability of the project for use of the design-build method of project
delivery with respect to time, schedule, costs, and quality factors;
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new text begin (v) the capability of the municipality to manage the project, including the
employment of experienced personnel or outside consultants; and
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new text begin (vi) the original character of the product or the services;
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new text begin (4) periodically review and evaluate the use of design-build in the selected projects;
and
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new text begin (5) assist the commissioner in preparing a report to the legislature at the conclusion
of the pilot program.
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new text begin Subd. 3. new text end

new text begin Membership. new text end

new text begin (a) The council is composed of the following members:
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new text begin (1) two contractors, at least one of whom represents a small contracting firm,
selected by the Associated General Contractors, Minnesota chapter;
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new text begin (2) two project designers selected by the American Council of Engineering
Companies, Minnesota chapter;
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new text begin (3) one representative of a metropolitan area county selected by the Association
of Minnesota Counties;
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new text begin (4) one representative of a greater Minnesota county selected by the Association
of Minnesota Counties;
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new text begin (5) one representative of a metropolitan area city selected by the League of
Minnesota Cities;
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new text begin (6) one representative of a greater Minnesota city selected by the League of
Minnesota Cities; and
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new text begin (7) the commissioner of transportation or a designee from the Minnesota Department
of Transportation Division of State Aid for Local Transportation.
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new text begin (b) All appointments required by paragraph (a) must be completed by August
1, 2009.
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new text begin (c) The commissioner or the commissioner's designee shall convene the first meeting
of the council within two weeks after the members have been appointed to the council and
shall serve as chair of the council.
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new text begin Subd. 4. new text end

new text begin Report to legislature. new text end

new text begin Annually, by October 1, the council shall submit
a report to the chairs of the legislative committees with jurisdiction over transportation
budget and policy, and to the legislature as provided under Minnesota Statutes, section
15.059. The report must summarize the design-build pilot program selection process,
including the number of applications considered; the proposal process for each project
that was selected; the contracting process for each project that was completed; and project
costs. The report must evaluate the process and results applying the performance-based
measures with which the commissioner evaluates trunk highway design-build projects.
The report must include any recommendations for future legislation.
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Sec. 2. new text begin DESIGN-BUILD CONTRACTING PILOT PROGRAM.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin The following terms have the meanings given:
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new text begin (1) "commissioner" means the commissioner of transportation;
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new text begin (2) "municipality" means a county or statutory or home rule charter city;
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new text begin (3) "design-build contract" means a single contract between a municipality 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
the transportation project;
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new text begin (4) "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;
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new text begin (5) "design professional" means a person who holds a license under Minnesota
Statutes, chapter 326B, that is required to be registered under Minnesota law;
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new text begin (6) "design-build transportation project" means the procurement of both the design
and construction of a transportation project in a single contract with a company or
companies capable of providing the necessary engineering services and construction;
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new text begin (7) "design-builder" means the design-build firm that proposes to design and build a
transportation project governed by the procedures of this section;
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new text begin (8) "request for proposals" or "RFP" means the document by which the municipality
solicits proposals from qualified design-build firms to design and construct the
transportation project;
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new text begin (9) "request for qualifications" or "RFQ" means a document to qualify potential
design-build firms; and
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new text begin (10) "responsive proposal" means a technical proposal of which no major component
contradicts the goals of the project, significantly violates an RFP requirement, or places
conditions on a proposal.
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new text begin Subd. 2. new text end

new text begin Establishment of pilot program. new text end

new text begin (a) The commissioner of transportation
shall conduct a design-build contracting pilot program to select local transportation
projects for participation in the program, to conduct information sessions for engineers
and contractors, to support and evaluate the use of the design-build method of contracting
by counties and statutory and home rule charter cities in constructing, improving, and
maintaining streets and highways on the state-aid system, and to report to the legislature.
new text end

new text begin (b) The selection of design-build projects under the pilot program must be as made
by the Design-Build Project Selection Council established in section 1.
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new text begin Subd. 3. new text end

new text begin Licensing requirements. new text end

new text begin (a) 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.
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new text begin (b) 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 Minnesota
Statutes, sections 161.3410 to 161.3428.
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new text begin (c) 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, municipality, or other third party under existing law.
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new text begin (d) The design service portion of a design-build contract must be considered a
service and not a product.
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new text begin Subd. 4. new text end

new text begin Information session for municipal engineer. new text end

new text begin After a project is selected
for participation in the design-build contracting pilot program, the commissioner or the
commissioner's designee with design-build experience shall conduct an information
session for the municipality's engineer for each selected project, in which issues unique
to design-build must be discussed including, but not limited to, writing an RFP, project
oversight requirements, assessing risk, and communication with the design-build firm.
After participation in the information session, the municipality's engineer is qualified to
post the selected project, along with any future design-build project RFP in the pilot
program.
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new text begin Subd. 5. new text end

new text begin Technical Review Committee. new text end

new text begin During the phase one RFQ and before
solicitation, the municipality shall appoint a Technical Review Committee of at least
five individuals. The Technical Review Committee must include an individual whose
name and qualifications are submitted to the municipality by the Minnesota chapter of
the Associated General Contractors, after consultation with other commercial contractor
associations in the state. Members of the Technical Review Committee who are not state
employees are subject to the Minnesota Government Data Practices Act and Minnesota
Statutes, section 16C.06, to the same extent that state agencies are subject to those
provisions. A Technical Review Committee member may not participate in the review or
discussion of responses to the RFQ or RFP when a design-build firm in which the member
has a financial interest has responded to the RFQ or 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 RFQ or RFP for a specific project, or having any other economic
interest in that design-build firm. The members of the Technical Review Committee must
be treated as municipal employees in the event of litigation resulting from any action
arising out of their service on the committee.
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new text begin Subd. 6. new text end

new text begin Phase one; design-build RFQ. new text end

new text begin The municipality shall prepare an RFQ,
which must include the following:
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new text begin (1) the minimum qualifications of design-builders necessary to meet the requirements
for acceptance;
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new text begin (2) a scope of work statement and schedule;
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new text begin (3) documents defining the project requirements;
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new text begin (4) the form of contract to be awarded;
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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 two but not more than five;
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new text begin (6) a description of the RFP requirements;
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new text begin (7) the maximum time allowed for design and construction;
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new text begin (8) the municipality's estimated cost of design and construction;
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new text begin (9) requirements for construction experience, design experience, and financial,
personnel, and equipment resources available from potential design-builders for the
project and experience in other design-build transportation projects or similar projects,
provided that these requirements may not unduly restrict competition; and
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new text begin (10) a statement that "past performance," "experience," or other criteria used in the
RFQ evaluation process does not include the exercise or assertion of a person's legal rights.
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new text begin Subd. 7. new text end

new text begin Information session for prospective design-build firms. new text end

new text begin After an
RFQ solicitation for a design-build project is made, any prospective design-build firm
shall attend a design-build information session conducted by the commissioner or the
commissioner's designee with design-build experience. The information must include
information about design-build contracts, including, but not limited to, communication
with partner firms, project oversight requirements, assessing risk, and communication
with the municipality's engineer. After participation in the information session, the
design-build firm is eligible to bid on the design-build project and any future design-build
pilot program projects.
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new text begin Subd. 8. new text end

new text begin Evaluation; short list. new text end

new text begin The selection team shall evaluate the design-build
qualifications of responding firms and shall compile a short list of no more than five
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
municipality may readvertise or cancel the project as the municipality deems necessary.
new text end

new text begin Subd. 9. new text end

new text begin Phase two; design-build RFP. new text end

new text begin The municipality shall prepare an RFP,
which must include:
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new text begin (1) the scope of work, including (i) performance and technical requirements, (ii)
conceptual design, (iii) specifications, and (iv) functional and operational elements for
the delivery of the completed project, all of which must be prepared by a registered or
licensed professional engineer;
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new text begin (2) copies of the contract documents that the successful proposer will be expected to
sign;
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new text begin (3) the maximum time allowable for design and construction;
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new text begin (4) the road authority's estimated cost of design and construction;
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new text begin (5) the requirement that a submitted proposal be segmented into two parts, a
technical proposal and a price proposal;
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new text begin (6) the requirement that each proposal be in a separately sealed, clearly identified
package and include the date and time of the submittal deadline;
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new text begin (7) the requirement that the technical proposal include a critical path method,
bar schedule of the work to be performed, or similar schematic; preliminary design
plans and specifications; technical reports; calculations; permit requirements; applicable
development fees; and other data requested in the RFP;
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new text begin (8) the requirement that the price proposal contain all design, construction,
engineering, inspection, and construction costs of the proposed project;
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new text begin (9) the date, time, and location of the public opening of the sealed price proposals;
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new text begin (10) the amount of, and eligibility for, a stipulated fee;
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new text begin (11) other information relevant to the project; and
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new text begin (12) a statement that "past performance," "experience," or other criteria used in the
RFP evaluation process does not include the exercise or assertion of a person's legal rights.
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new text begin Subd. 10. new text end

new text begin Design-build award; computation; announcement. new text end

new text begin A design-build
contract must be awarded as follows:
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new text begin (a) The Technical Review Committee shall score the technical proposals of the
proposers selected under subdivision 8 using the selection criteria in the RFP. The
Technical Review Committee shall then submit a technical proposal score for each
design-builder to the municipality. The Technical Review Committee shall reject any
nonresponsive proposal. The municipality shall review the technical proposal scores.
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new text begin (b) The commissioner or the commissioner's designee shall review the technical
proposal scores. The commissioner shall submit the final technical proposal scores to the
municipality.
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new text begin (c) The municipality shall announce the technical proposal score for each
design-builder and shall publicly open the sealed price proposals and shall divide each
design-builder's price by the technical score that the commissioner has given to it to obtain
an adjusted score. The design-builder selected must be that responsive and responsible
design-builder whose adjusted score is the lowest.
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new text begin (d) If a time factor is included with the selection criteria in the RFP package, the
municipality may use a value of the time factor established by the municipality as a
criterion in the RFP.
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new text begin (e) Unless all proposals are rejected, the municipality shall award the contract
to the responsive and responsible design-builder with the lowest adjusted score. The
municipality shall reserve the right to reject all proposals.
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new text begin (f) The municipality shall award a stipulated fee not less than two-tenths of one
percent of the municipality's estimated cost of design and construction to each short-listed,
responsible proposer who provides a responsive but unsuccessful proposal. If the
municipality does not award a contract, all short-listed proposers must receive the
stipulated fee. If the municipality cancels the contract before reviewing the technical
proposals, the municipality shall award each design-builder on the short list a stipulated
fee of not less than two-tenths of one percent of the municipality's estimated cost of
design and construction. The municipality shall pay the stipulated fee to each proposer
within 90 days after the award of the contract or the decision not to award a contract.
In consideration for paying the stipulated fee, the municipality may use any ideas or
information contained in the proposals in connection with any contract awarded for the
project or in connection with a subsequent procurement, without any obligation to pay
any additional compensation to the unsuccessful proposers. Notwithstanding the other
provisions of this subdivision, an unsuccessful short-list proposer may elect to waive
the stipulated fee. If an unsuccessful short-list proposer elects to waive the stipulated
fee, the municipality may not use ideas and information contained in that proposer's
proposal. Upon the request of the municipality, a proposer who waived a stipulated fee
may withdraw the waiver, in which case the municipality shall pay the stipulated fee to the
proposer and thereafter may use ideas and information in the proposer's proposal.
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new text begin Subd. 11. new text end

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

new text begin (a) The municipality may also use
low-bid, design-build procedures to award a design-build contract where the scope of
the work can be clearly defined.
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new text begin (b) Low-bid design-build projects may require an RFQ and short-listing, and must
require an RFP.
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new text begin (c) Submitted proposals under this subdivision must include separately a technical
proposal and 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:
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new text begin (1) The first step is the review of the technical proposal by the Technical Review
Committee as provided in subdivision 5. The Technical Review Committee shall open
the technical proposal first and shall determine if it complies with the requirements of the
RFP and is responsive. The Technical Review Committee may not perform any ranking or
scoring of the technical proposals.
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new text begin (2) The second step is the determination of the low bidder based on the price
proposal. The municipality may not open the price proposal until the review of the
technical proposal is complete.
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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 Technical Review Committee and that is also the lowest bid.
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new text begin (e) A stipulated fee may be paid for unsuccessful bids on low-bid, design-build
projects only when the municipality has required an RFQ and short-listed the most highly
qualified responsive bidders.
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Sec. 3. new text begin EXPIRATION.
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new text begin The Design-Build Project Selection Council under section 1 and the pilot program
under section 2 expire October 1, 2012, or upon completion of nine design-build projects
under this pilot program, whichever occurs first.
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Sec. 4. new text begin EFFECTIVE DATE.
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new text begin This act is effective the day following final enactment.
new text end