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S.F. No. 2131, 1st Engrossment - 87th Legislative Session (2011-2012)   Posted on Mar 08, 2012

1.1A bill for an act
1.2relating to transportation; contracts; authorizing completion of design-build
1.3projects approved by commissioner of transportation;amending Laws 2009,
1.4chapter 36, article 3, sections 28; 29.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6    Section 1. Laws 2009, chapter 36, article 3, section 28, is amended to read:
1.7    Sec. 28. DESIGN-BUILD PROJECT SELECTION COUNCIL LOCAL
1.8PROJECTS.
1.9    Subdivision 1. Establishment of council. A Design-Build Project Selection
1.10Council is established to select, evaluate, and support county and municipal transportation
1.11projects on the state-aid system that are conducive to use of the design-build method of
1.12contracting and to report to the legislature.
1.13    Subd. 1a. Selection authority. The commissioner of transportation or the
1.14commissioner's designee from the Department of Transportation State Aid for Local
1.15Transportation Division shall select, evaluate, and support county and municipal
1.16transportation projects on the state-aid system that are conducive to use of the design-build
1.17method of contracting.
1.18    Subd. 2. Duties of council commissioner. In order to accomplish these purposes,
1.19the council commissioner shall:
1.20(1) review applications for participation received by the commissioner from counties
1.21and cities;
1.22(2) select projects for participation in the pilot program a maximum of 15 projects
1.23on the state-aid system, no more than ten of which may be on the county state-aid highway
2.1system, and no more than ten of which may be on the municipal state-aid street system
2.2each calendar year;
2.3(3) determine that the use of design-build in the selected projects would serve the
2.4public interest, after considering, at a minimum:
2.5(i) the extent to which the municipality can adequately define the project
2.6requirements in a proposed scope of the design and construction desired;
2.7(ii) the time constraints for delivery of the project;
2.8(iii) the capability of potential contractors with the design-build method of project
2.9delivery;
2.10(iv) the suitability of the project for use of the design-build method of project
2.11delivery with respect to time, schedule, costs, and quality factors;
2.12(v) the capability of the municipality to manage the project, including the
2.13employment of experienced personnel or outside consultants; and
2.14(vi) the original character of the product or the services; and
2.15(4) periodically review and evaluate the use of design-build in the selected projects;
2.16and
2.17(5) assist the commissioner in preparing a report to the legislature at the conclusion
2.18of the pilot program.
2.19    Subd. 3. Membership. (a) The council is composed of the following members:
2.20(1) two contractors, at least one of whom represents a small contracting firm,
2.21selected by the Associated General Contractors, Minnesota chapter;
2.22(2) two project designers selected by the American Council of Engineering
2.23Companies, Minnesota chapter;
2.24(3) one representative of a metropolitan area county selected by the Association
2.25of Minnesota Counties;
2.26(4) one representative of a greater Minnesota county selected by the Association
2.27of Minnesota Counties;
2.28(5) one representative of a metropolitan area city selected by the League of
2.29Minnesota Cities;
2.30(6) one representative of a greater Minnesota city selected by the League of
2.31Minnesota Cities; and
2.32(7) the commissioner of transportation or a designee from the Minnesota Department
2.33of Transportation Division of State Aid for Local Transportation.
2.34(b) All appointments required by paragraph (a) must be completed by August
2.351, 2009.
3.1(c) The commissioner or the commissioner's designee shall convene the first meeting
3.2of the council within two weeks after the members have been appointed to the council and
3.3shall serve as chair of the council.
3.4    Subd. 4. Report to legislature. Annually, by January 15, the council shall submit
3.5a report to the chairs and ranking minority members of the legislative committees with
3.6jurisdiction over transportation budget and policy, and to the legislature as provided under
3.7Minnesota Statutes, section 15.059. The report must summarize the design-build pilot
3.8program selection process, including the number of applications considered; the proposal
3.9process for each project that was selected; the contracting process for each project that was
3.10completed; and project costs. The report must evaluate the process and results applying
3.11the performance-based measures with which the commissioner evaluates trunk highway
3.12design-build projects. The report must include any recommendations for future legislation.
3.13EFFECTIVE DATE.This section is effective the day following final enactment
3.14and expires upon completion of nine design-build projects.

3.15    Sec. 2. Laws 2009, chapter 36, article 3, section 28, the effective date, is amended to
3.16read:
3.17EFFECTIVE DATE.This section is effective the day following final enactment
3.18and expires on October 1, 2012, or upon completion of nine design-build projects under
3.19this pilot program, whichever occurs first.

3.20    Sec. 3. Laws 2009, chapter 36, article 3, section 29, is amended to read:
3.21    Sec. 29. DESIGN-BUILD CONTRACTING PILOT PROGRAM.
3.22    Subdivision 1. Definitions. The following terms have the meanings given:
3.23(1) "commissioner" means the commissioner of transportation;
3.24(2) "municipality" means a county or statutory or home rule charter city;
3.25(3) "design-build contract" means a single contract between a municipality and a
3.26design-build company or firm to furnish the architectural or engineering and related design
3.27services as well as the labor, material, supplies, equipment, and construction services for
3.28the transportation project;
3.29(4) "design-build firm" means a proprietorship, partnership, limited liability
3.30partnership, joint venture, corporation, any type of limited liability company, professional
3.31corporation, or any legal entity;
3.32(5) "design professional" means a person who holds a license under Minnesota
3.33Statutes, chapter 326B, that is required to be registered under Minnesota law;
4.1(6) "design-build transportation project" means the procurement of both the design
4.2and construction of a transportation project in a single contract with a company or
4.3companies capable of providing the necessary engineering services and construction;
4.4(7) "design-builder" means the design-build firm that proposes to design and build a
4.5transportation project governed by the procedures of this section;
4.6(8) "request for proposals" or "RFP" means the document by which the municipality
4.7solicits proposals from qualified design-build firms to design and construct the
4.8transportation project;
4.9(9) "request for qualifications" or "RFQ" means a document to qualify potential
4.10design-build firms; and
4.11(10) "responsive proposal" means a technical proposal of which no major component
4.12(i) contradicts the goals of the project, (ii) materially violates an RFP requirement so as
4.13to give the proposer a competitive advantage, or (iii) places conditions on a proposal
4.14inconsistent with the requirements of the RFP.
4.15    Subd. 2. Establishment of pilot the program. (a) The commissioner of
4.16transportation shall conduct a design-build contracting pilot program to select local
4.17transportation projects for participation in the program, to conduct information sessions
4.18for engineers and contractors, to support and evaluate the use of the design-build method
4.19of contracting by counties and statutory and home rule charter cities in constructing,
4.20improving, and maintaining streets and highways on the state-aid system, and to report to
4.21the legislature.
4.22(b) The commissioner must concur in the RFQ and RFP prior to solicitation.
4.23(c) The selection of design-build projects under the pilot program must be as made
4.24by the Design-Build Project Selection Council established commissioner as provided in
4.25section 28.
4.26    Subd. 3. Licensing requirements. (a) Each design-builder shall employ, or have
4.27as a partner, member, officer, coventurer, or subcontractor, a person duly licensed and
4.28registered to provide the design services required to complete the project and do business
4.29in the state, including the provision of sureties of sufficient amount to protect the interests
4.30of the awarding municipality.
4.31(b) A design-builder may enter into a contract to provide professional or construction
4.32services for a project that the design-builder is not licensed, registered, or qualified to
4.33perform, so long as the design-builder provides those services through subcontractors with
4.34duly licensed, registered, or otherwise qualified individuals in accordance with Minnesota
4.35Statutes, sections 161.3410 to 161.3428.
5.1(c) Nothing in this section authorizing design-build contracts is intended to limit or
5.2eliminate the responsibility or liability owed by a professional on a design-build project to
5.3the state, municipality, or other third party under existing law.
5.4(d) The design service portion of a design-build contract must be considered a
5.5service and not a product.
5.6    Subd. 4. Information session for municipal engineer. After a project is selected
5.7for participation in the design-build contracting pilot program, the commissioner or the
5.8commissioner's designee with design-build experience shall conduct an information
5.9session for the municipality's engineer for each selected project, in which issues unique
5.10to design-build must be discussed, including, but not limited to, writing an RFP, project
5.11oversight requirements, assessing risk, and communication with the design-build firm.
5.12After participation in the information session, the municipality's engineer is qualified to
5.13post the selected project, along with any future design-build project RFP in the pilot
5.14program.
5.15    Subd. 5. Technical Review Committee. During the phase one RFQ and before
5.16solicitation, the municipality shall appoint a Technical Review Committee of at least
5.17five individuals. The Technical Review Committee must include an individual whose
5.18name and qualifications are submitted to the municipality by the Minnesota chapter of
5.19the Associated General Contractors, after consultation with other commercial contractor
5.20associations in the state. Members of the Technical Review Committee who are not state
5.21employees are subject to the Minnesota Government Data Practices Act and Minnesota
5.22Statutes, section 16C.06, to the same extent that state agencies are subject to those
5.23provisions. A Technical Review Committee member may not participate in the review or
5.24discussion of responses to the RFQ or RFP when a design-build firm in which the member
5.25has a financial interest has responded to the RFQ or RFP. "Financial interest" includes,
5.26but is not limited to, being or serving as an owner, employee, partner, limited liability
5.27partner, shareholder, joint venturer, family member, officer, or director of a design-build
5.28firm responding to an RFQ or RFP for a specific project, or having any other economic
5.29interest in that design-build firm. The members of the Technical Review Committee must
5.30be treated as municipal employees in the event of litigation resulting from any action
5.31arising out of their service on the committee.
5.32    Subd. 6. Phase one; design-build RFQ. The municipality shall prepare an RFQ,
5.33which must include the following:
5.34(1) the minimum qualifications of design-builders necessary to meet the requirements
5.35for acceptance;
5.36(2) a scope of work statement and schedule;
6.1(3) documents defining the project requirements;
6.2(4) the form of contract to be awarded;
6.3(5) the weighted selection criteria for compiling a short list and the number of firms
6.4to be included in the short list, which must be at least two but not more than five;
6.5(6) a description of the request for proposals (RFP) requirements;
6.6(7) the maximum time allowed for design and construction;
6.7(8) the municipality's estimated cost of design and construction;
6.8(9) requirements for construction experience, design experience, financial,
6.9personnel, and equipment resources available from potential design-builders for the
6.10project and experience in other design-build transportation projects or similar projects,
6.11provided that these requirements may not unduly restrict competition; and
6.12(10) a statement that "past performance" or "experience" or other criteria used in the
6.13RFQ evaluation process does not include the exercise or assertion of a person's legal rights.
6.14    Subd. 7. Information session for prospective design-build firms. After a
6.15design-build project is advertised, any prospective design-build firm shall attend a
6.16design-build information session conducted by the commissioner or the commissioner's
6.17designee with design-build experience. The information must include information about
6.18design-build contracts, including, but not limited to, communication with partner firms,
6.19project oversight requirements, assessing risk, and communication with the municipality's
6.20engineer. After participation in the information session, the design-build firm is eligible to
6.21bid on the design-build project and any future design-build pilot program projects.
6.22    Subd. 8. Evaluation. The selection team shall evaluate the design-build
6.23qualifications of responding firms and shall compile a short list of no more than five
6.24most highly qualified firms in accordance with qualifications criteria described in the
6.25RFQ. If only one design-build firm responds to the RFQ or remains on the short list, the
6.26municipality may readvertise or cancel the project as the municipality deems necessary.
6.27    Subd. 9. Phase two; design-build RFP. The municipality shall prepare an RFP,
6.28which must include:
6.29(1) the scope of work, including (i) performance and technical requirements, (ii)
6.30conceptual design, (iii) specifications consistent with state standards and specifications,
6.31and (iv) functional and operational elements for the delivery of the completed project, all
6.32of which must be prepared by a registered or licensed professional engineer;
6.33(2) copies of the contract documents that the successful proposer will be expected to
6.34sign;
6.35(3) the maximum time allowable for design and construction;
6.36(4) the road authority's estimated cost of design and construction;
7.1(5) the requirement that a submitted proposal be segmented into two parts, a
7.2technical proposal and a price proposal;
7.3(6) the requirement that each proposal be in a separately sealed, clearly identified
7.4package and include the date and time of the submittal deadline;
7.5(7) the requirement that the technical proposal include a critical path method,
7.6bar schedule of the work to be performed, or similar schematic; preliminary design
7.7plans and specifications; technical reports; calculations; permit requirements; applicable
7.8development fees; and other data requested in the RFP;
7.9(8) the requirement that the price proposal contain all design, construction,
7.10engineering, inspection, and construction costs of the proposed project;
7.11(9) the requirement that surety be submitted equal to the total amount of the proposal;
7.12(10) a description of the qualifications required of the design-builder and the
7.13selection criteria, including the weight of each criterion and subcriterion;
7.14(11) the date, time, and location of the public opening of the sealed price proposals;
7.15(12) the amount of, and eligibility for, a stipulated fee;
7.16(13) other information relevant to the project; and
7.17(14) a statement that "past performance," "experience," or other criteria used in the
7.18RFP evaluation process does not include the exercise or assertion of a person's legal rights.
7.19    Subd. 10. Design-build award; computation; announcement. A design-build
7.20contract shall be awarded as follows:
7.21(a) The Technical Review Committee shall score the technical proposals of the
7.22proposers selected under subdivision 8 using the selection criteria in the RFP. The
7.23Technical Review Committee shall then submit a technical proposal score for each
7.24design-builder to the municipality. The Technical Review Committee shall reject any
7.25nonresponsive proposal, including those unable to provide sufficient surety to guarantee
7.26project completion. The municipality shall review the technical proposal scores.
7.27(b) The commissioner or the commissioner's designee shall review the technical
7.28proposal scores. The commissioner shall submit the final technical proposal scores to the
7.29municipality.
7.30(c) The municipality shall announce the technical proposal score for each
7.31design-builder and shall publicly open the sealed price proposals and shall divide each
7.32design-builder's price by the technical score that the commissioner has given to it to obtain
7.33an adjusted score. The design-builder selected must be that responsive and responsible
7.34design-builder whose adjusted score is the lowest.
8.1(d) If a time factor is included with the selection criteria in the RFP package, the
8.2municipality may use a value of the time factor established by the municipality as a
8.3criterion in the RFP.
8.4(e) Unless all proposals are rejected, the municipality shall award the contract
8.5to the responsive and responsible design-builder with the lowest adjusted score. The
8.6municipality shall reserve the right to reject all proposals.
8.7(f) The municipality shall award a stipulated fee not less than two-tenths of one
8.8percent of the municipality's estimated cost of design and construction to each short-listed,
8.9responsible proposer who provides a responsive but unsuccessful proposal. If the
8.10municipality does not award a contract, all short-listed proposers must receive the
8.11stipulated fee. If the municipality cancels the contract before reviewing the technical
8.12proposals, the municipality shall award each design-builder on the short list a stipulated
8.13fee of not less than two-tenths of one percent of the municipality's estimated cost of
8.14design and construction. The municipality shall pay the stipulated fee to each proposer
8.15within 90 days after the award of the contract or the decision not to award a contract.
8.16In consideration for paying the stipulated fee, the municipality may use any ideas or
8.17information contained in the proposals in connection with any contract awarded for the
8.18project or in connection with a subsequent procurement, without any obligation to pay
8.19any additional compensation to the unsuccessful proposers. Notwithstanding the other
8.20provisions of this subdivision, an unsuccessful short-list proposer may elect to waive
8.21the stipulated fee. If an unsuccessful short-list proposer elects to waive the stipulated
8.22fee, the municipality may not use ideas and information contained in that proposer's
8.23proposal. Upon the request of the municipality, a proposer who waived a stipulated fee
8.24may withdraw the waiver, in which case the municipality shall pay the stipulated fee to the
8.25proposer and thereafter may use ideas and information in the proposer's proposal.
8.26    (g) The municipality shall not limit the ability of design-builders that have submitted
8.27proposals to protest a contemplated or actual award by the commissioner by, among
8.28other things, unreasonably restricting the time to protest; restricting the right to seek
8.29judicial review of the commissioner's actions; attempting to change the judicial standard
8.30of review; or requiring the protestor to pay attorney fees for an unsuccessful, nonfrivolous
8.31protest. Unless all design-builders that have submitted proposals agree to execution of
8.32a contract for the project without a waiting period beforehand, the municipality shall
8.33wait at least seven days after both the award of the project and public disclosure of the
8.34Technical Review Committee's scoring data and the successful proposal before executing
8.35a contract for the project.
9.1    Subd. 11. Low-bid design-build process. (a) The municipality may also use
9.2low-bid, design-build procedures to award a design-build contract where the scope of
9.3the work can be clearly defined.
9.4(b) Low-bid design-build projects may require an RFQ and short-listing, and must
9.5require an RFP.
9.6(c) Submitted proposals under this subdivision must include separately a technical
9.7proposal and a price proposal. The low-bid, design-build procedures must follow a
9.8two-step process for review of the responses to the RFP as follows:
9.9(1) the first step is the review of the technical proposal by the Technical Review
9.10Committee as provided in subdivision 5. The Technical Review Committee must open
9.11the technical proposal first and must determine if it complies with the requirements of the
9.12RFP and is responsive. The Technical Review Committee may not perform any ranking
9.13or scoring of the technical proposals; and
9.14(2) the second step is the determination of the low bidder based on the price
9.15proposal. The municipality may not open the price proposal until the review of the
9.16technical proposal is complete.
9.17(d) The contract award under low-bid, design-build procedures must be made to the
9.18proposer whose sealed bid is responsive to the technical requirements as determined by
9.19the Technical Review Committee and that is also the lowest bid.
9.20(e) A stipulated fee may be paid for unsuccessful bids on low-bid, design-build
9.21projects only when the municipality has required an RFQ and short-listed the most highly
9.22qualified responsive bidders.
9.23EFFECTIVE DATE.This section is effective the day following final enactment
9.24and expires upon completion of nine design-build projects.

9.25    Sec. 4. Laws 2009, chapter 36, article 3, section 29, the effective date, is amended to
9.26read:
9.27EFFECTIVE DATE.This section is effective the day following final enactment
9.28and expires on October 1, 2012, or upon completion of nine design-build projects under
9.29this pilot program, whichever occurs first.