Minnesota Session Laws - 2005, Regular Session

                            CHAPTER 78-S.F.No. 1335 
                  An act relating to state government; regulating state 
                  construction contracts; amending Minnesota Statutes 
                  2004, sections 16B.31, subdivision 1; 16B.33, 
                  subdivision 1; 16C.26, subdivisions 3, 4; 16C.28, 
                  subdivision 2; proposing coding for new law in 
                  Minnesota Statutes, chapter 16C. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2004, section 16B.31, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CONSTRUCTION PLANS AND SPECIFICATIONS; 
        DESIGN-BUILD, CONSTRUCTION MANAGER AT RISK, OR JOB ORDER 
        CONTRACTING.] (a) The commissioner shall (1) have plans and 
        specifications prepared for the construction, alteration, or 
        enlargement of all state buildings, structures, and other 
        improvements except highways and bridges, and except for 
        buildings and structures under the control of the Board of 
        Regents of the University of Minnesota or of the Board of 
        Trustees of the Minnesota State Colleges and Universities; (2) 
        approve those plans and specifications; (3) advertise for bids 
        and award all contracts in connection with the improvements; (4) 
        supervise and inspect all work relating to the improvements; (5) 
        approve all lawful changes in plans and specifications after the 
        contract for an improvement is let; and (6) approve estimates 
        for payment.  This subdivision does not apply to the 
        construction of the Zoological Gardens.  
           (b) MS 2002 (Expired) 
           (c) MS 2002 (Expired) 
           (b) Notwithstanding any other law to the contrary, the 
        commissioner may: 
           (1) use a design-build method of project delivery and award 
        a design-build contract as provided in sections 16C.32 and 
        16C.33; 
           (2) use a construction manager at risk method of project 
        delivery and award a construction manager at risk contract on 
        the basis of the selection criteria described in section 16C.34; 
        or 
           (3) use a job order contracting contractor selection as 
        described in section 16C.35. 
           (c) The commissioner may require a primary designer and a 
        construction manager at risk, by contract, to cooperate in the 
        design, planning and scheduling, and construction process.  The 
        contract must not make the primary designer or construction 
        manager at risk a subcontractor or joint venture partner to the 
        other or limit the primary designer's or construction manager at 
        risk's independent obligations to the commissioner. 
           (d) For projects undertaken by the Minnesota State Colleges 
        and Universities system, the powers and duties granted in 
        paragraphs (b) and (c) may be exercised by its board of trustees.
           (e) The commissioner, the board, the Board of Regents of 
        the University of Minnesota, and the Board of Trustees of the 
        Minnesota State Colleges and Universities shall create a panel 
        of representatives, including representatives of the 
        construction industry and the architecture and engineering 
        professions, to evaluate the use of design-build and the 
        procedures for design-builder selection under section 16C.31, 
        and shall report to the legislature on or before January 1, 
        2004, as to the success of design-build as a method of 
        construction and the need and desirability for any changes in 
        the selection procedure. 
           Sec. 2.  Minnesota Statutes 2004, section 16B.33, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] As used in this section, the 
        following terms have the meanings given them:  
           (a) "Agency" has the meaning given in section 16B.01.  
           (b) "Architect" means an architect or landscape architect 
        registered to practice under sections 326.02 to 326.15.  
           (c) "Board" means the state Designer Selection Board.  
           (d) "Design-build" means the process of entering into and 
        managing a single contract between the commissioner and the 
        design-builder in which the design-builder agrees to both design 
        and construct a project as specified in the contract at a 
        guaranteed maximum or a fixed price. 
           (e) "Design-builder" means a person who proposes to design 
        and construct a project in accordance with the requirements of 
        section 16C.33. 
           (f) "Designer" means an architect or engineer, or a 
        partnership, association, or corporation comprised primarily of 
        architects or engineers or of both architects and engineers.  
           (e) (g) "Engineer" means an engineer registered to practice 
        under sections 326.02 to 326.15.  
           (f) (h) "Person" includes an individual, corporation, 
        partnership, association, or any other legal entity.  
           (g) (i) "Primary designer" means the designer who is to 
        have primary design responsibility for a project, and does not 
        include designers who are merely consulted by the user agency 
        and do not have substantial design responsibility, or designers 
        who will or may be employed or consulted by the primary designer.
           (h) (j) "Project" means an undertaking to construct, erect, 
        or remodel a building by or for the state or an agency.  
           (i) (k) "User agency" means the agency undertaking a 
        specific project.  For projects undertaken by the state of 
        Minnesota, "user agency" means the Department of Administration 
        or a state agency with an appropriate delegation to act on 
        behalf of the Department of Administration. 
           Sec. 3.  Minnesota Statutes 2004, section 16C.26, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PUBLICATION OF NOTICE; EXPENDITURES OVER 
        $15,000 $25,000.] If the amount of an expenditure is estimated 
        to exceed $15,000 $25,000, sealed bids must be solicited by 
        public notice inserted at least once in a newspaper or trade 
        journal not less than seven days before the final date of 
        submitting bids in a manner designated by the commissioner.  The 
        commissioner shall designate the newspaper or trade journal for 
        that publication and may designate different newspapers or 
        journals according to the nature of the purchase or 
        contract.  To the extent practical, this must include posting on 
        a state Web site.  For expenditures over $50,000, the 
        commissioner shall also solicit sealed bids by sending providing 
        notices by mail to all prospective bidders known to the 
        commissioner and by posting notice on a public bulletin board in 
        the commissioner's office a state Web site at least five seven 
        days before the final date of submitting bids.  All bids over 
        $50,000 must be sealed when they are received and must be opened 
        in public at the hour stated in the notice.  All original bids 
        and all documents pertaining to the award of a contract must be 
        retained and made a part of a permanent file or record and 
        remain open to public inspection. 
           Sec. 4.  Minnesota Statutes 2004, section 16C.26, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BUILDING AND CONSTRUCTION CONTRACTS; 
        $15,000 $50,000 OR LESS.] All contracts, the amount of which is 
        estimated to be $15,000 or less, may be made either upon 
        competitive bids or in the open market, in the discretion of the 
        commissioner.  So far as practicable, however, they must be 
        based on at least three competitive bids which must be 
        permanently recorded.  An informal bid may be used for building, 
        construction, and repair contracts that are estimated at less 
        than $50,000.  Informal bids must be authenticated by the bidder 
        in a manner specified by the commissioner. 
           Sec. 5.  Minnesota Statutes 2004, section 16C.28, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ALTERATIONS AND ERASURES.] 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 under this 
        subdivision in a manner that is clear and authenticated by an 
        authorized representative of the responder.  An alteration or 
        erasure may be crossed out and the correction printed in ink or 
        typewritten adjacent to it and initialed in ink by the person 
        signing the bid by an authorized representative of the responder.
           Sec. 6.  [16C.32] [DESIGN-BUILD, CONSTRUCTION MANAGER AT 
        RISK, AND JOB ORDER CONTRACTING CONTRACTS.] 
           Subdivision 1.  [DEFINITIONS.] As used in sections 16C.32 
        to 16C.35, the following terms have the meanings given them, 
        unless the context clearly indicates otherwise: 
           (1) "acceptance" means a formal resolution of the 
        commissioner authorizing the execution of a design-build, 
        construction manager at risk, or job order contracting contract; 
           (2) "agency" means any state officer, employee, board, 
        commission, authority, department, or other agency of the 
        executive branch of state government.  Unless specifically 
        indicated otherwise, as used in sections 16C.32 to 16C.35, 
        agency also includes the Minnesota State Colleges and 
        Universities; 
           (3) "architect" means an architect or landscape architect 
        registered to practice under sections 326.02 to 326.15; 
           (4) "board" means the state Designer Selection Board, 
        unless the estimated cost of the project is less than 
        $2,000,000, in which case the commissioner may act as the board; 
           (5) "Capitol Area Architectural and Planning Board" means 
        the board established to govern the capitol area under chapter 
        15B; 
           (6) "commissioner" means the commissioner of administration 
        or the Board of Trustees of the Minnesota State Colleges and 
        Universities, whichever controls a project; 
           (7) "construction manager at risk" means a person who is 
        selected by the commissioner to act as a construction manager to 
        manage the construction process, which includes, but is not 
        limited to, responsibility for the price, schedule, and 
        workmanship of the construction performed in accordance with the 
        procedures of section 16C.34; 
           (8) "construction manager at risk contract" means a 
        contract for construction of a project between a construction 
        manager at risk and the commissioner, which contract shall 
        include a guaranteed maximum price, construction schedule, and 
        workmanship of the construction performed; 
           (9) "design-build contract" means a contract between the 
        commissioner and a design-builder to furnish the architectural, 
        engineering, and related design services as well as the labor, 
        materials, supplies, equipment, and construction services for a 
        project; 
           (10) "design and price-based proposal" means the proposal 
        to be submitted by a design-builder in the design and 
        price-based selection process, as described in section 16C.33, 
        which proposal meets the requirements of section 16C.33, 
        subdivision 7, paragraph (c), in such detail as required in the 
        request for proposals; 
           (11) "design and price-based selection" means the selection 
        of a design-builder as described in section 16C.33, subdivision 
        8; 
           (12) "design criteria package" means performance criteria 
        prepared by a design criteria professional who shall be either 
        an employee of the commissioner or shall be selected in 
        compliance with section 16B.33, 16C.08, or 16C.095; 
           (13) "design criteria professional" means a person licensed 
        under chapter 326, or a person who employs an individual or 
        individuals licensed under chapter 326, required to design a 
        project, and who is employed by or under contract to the 
        commissioner to provide professional, architectural, or 
        engineering services in connection with the preparation of the 
        design criteria package; 
           (14) "guaranteed maximum price" means the maximum amount 
        that a design-builder, construction manager at risk, or 
        subcontractor will be paid pursuant to a contract to perform a 
        defined scope of work; 
           (15) "guaranteed maximum price contract" means a contract 
        under which a design-builder, construction manager, or 
        subcontractor is paid on the basis of their actual cost to 
        perform the work specified in the contract plus an amount for 
        overhead and profit, the sum of which must not exceed the 
        guaranteed maximum price set forth in the contract; 
           (16) "job order contracting" means a project delivery 
        method that requests a limited number of bids from a list of 
        qualified contractors, selected from a registry of qualified 
        contractors who have been prescreened and who have entered into 
        master contracts with the commissioner, as provided in section 
        16C.35; 
           (17) "past performance" or "experience" does not include 
        the exercise or assertion of a person's legal rights; 
           (18) "person" includes an individual, corporation, 
        partnership, association, or any other legal entity; 
           (19) "project" means an undertaking to construct, alter, or 
        enlarge a building, structure, or other improvements, except 
        highways and bridges, by or for the state or an agency; 
           (20) "qualifications-based selection" means the selection 
        of a design-builder as provided in section 16C.33; 
           (21) "request for qualifications" means the document or 
        publication soliciting qualifications for a design-build, 
        construction manager at risk, or job order contracting contract 
        as provided in sections 16C.33 to 16C.35; 
           (22) "request for proposals" means the document or 
        publication soliciting proposals for a design-build or 
        construction manager at risk contract as provided in sections 
        16C.33 and 16C.34; and 
           (23) "trade contract work" means the furnishing of labor, 
        materials, or equipment by contractors or vendors that are 
        incorporated into the completed project or are major components 
        of the means of construction.  Work performed by trade 
        contractors involves specific portions of the project, but not 
        the entire project. 
           Subd. 2.  [AUTHORITY.] (a) Subject to limitations in 
        sections 16B.31, subdivision 1; 16B.33, subdivision 1; 16C.16; 
        and 16C.32 to 16C.34, and notwithstanding any other law to the 
        contrary, the commissioner may: 
           (1) solicit and award a design-build contract on the basis 
        of either a qualifications based or a design and price-based 
        selection process provided in section 16C.33 if the conditions 
        in clause (4) are met; 
           (2) select a construction manager at risk as provided in 
        section 16C.34, and award a guaranteed maximum price contract 
        for a construction manager at risk if the conditions of clause 
        (5) are met; 
           (3) select a contractor by a job order contracting delivery 
        method as provided in section 16C.35; 
           (4) the commissioner may not utilize design-build contracts 
        for more than five percent of its total projects let, by number, 
        in each of the fiscal years 2006 and 2007, and ten percent of 
        its total projects let, by number, in each fiscal year 
        thereafter, that are funded in whole or in part with proceeds 
        from the sale of state general obligation bonds; and 
           (5) the commissioner may not utilize construction manager 
        at risk contracts for more than five percent of its total 
        projects let, by number, in each of the fiscal years 2006 and 
        2007, and ten percent of its total projects let, by number, in 
        each fiscal year thereafter, that are funded in whole or in part 
        with proceeds from the sale of state general obligation bonds. 
           (b) Pursuant to section 16B.31, subdivision 4, if the 
        project is within the Capitol area, the project shall comply 
        with sections 15B.03, subdivision 3; 15B.08, subdivision 2; 
        15B.10; and 15B.15, subdivision 4. 
           (c) The commissioner shall, for each design-build or 
        construction manager at risk contract, make a written 
        determination, including specific findings, indicating whether 
        use of the design-build or construction manager at risk 
        procurement serves the public interest. 
           (d) The solicitation of requests for qualifications or 
        proposals does not obligate the commissioner to enter into a 
        design-build or construction manager at risk contract.  In 
        accordance with the stated criteria and subcriteria for 
        evaluating qualifications or proposals, the commissioner may 
        accept or reject any or all responses received as a result of 
        the request.  The solicitation for qualifications or proposals 
        may be canceled at any time in the commissioner's sole 
        discretion if it is considered to be in the public's best 
        interest.  If the commissioner rejects all responses or cancels 
        the solicitation for proposals, the commissioner may resolicit a 
        request for qualifications or proposals using the same or 
        different requirements or request selection of a primary 
        designer pursuant to section 16B.33, 16C.08, or 16C.095 and 
        proceed with competitive bidding pursuant to sections 16C.25 to 
        16C.29. 
           Subd. 3.  [REPORT TO THE LEGISLATURE.] The commissioner 
        shall report to the legislature by January 15, 2010, the number 
        of projects and the total cost of those projects that were 
        delivered under contracts authorized under subdivision 2 of this 
        section. 
           Sec. 7.  [16C.33] [DESIGN-BUILD.] 
           Subdivision 1.  [CONFLICT OF INTEREST.] A board member may 
        not participate in the review, discussion, or selection of a 
        primary designer, a design-builder, or a firm in which the 
        member has a financial interest. 
           Subd. 2.  [DESIGN BUILDER LICENSING REQUIREMENTS.] (a) Each 
        design-builder must be, employ, or have as a partner, member, 
        coventurer, or subcontractor, persons or a firm with persons who 
        are duly licensed and registered to provide the services 
        required to complete the project and do business in this state. 
           (b) A design-builder may contract with the commissioner to 
        provide professional or construction services for which the 
        design-builder is not itself licensed, registered, or qualified 
        to perform, so long as the design-builder provides such services 
        through subcontracts with duly licensed, registered, or 
        otherwise qualified persons in accordance with this section. 
           (c) Nothing in this section or section 16C.32 is intended 
        to limit or eliminate the responsibility or liability owed by an 
        architect or engineer on a design-build project to the 
        commissioner and third parties under existing law.  The design 
        service portion of a design-build contract is considered a 
        service and not a product. 
           Subd. 3.  [SOLICITATION OF QUALIFICATIONS OR PROPOSALS.] (a)
        Every user agency, except the Capitol Area Architectural and 
        Planning Board, shall submit a written request for a 
        design-builder for its project to the commissioner who shall 
        forward the request to the board, consistent with section 
        16B.33, subdivision 3a.  The University of Minnesota shall 
        follow the process in subdivision 4 to select design-builders 
        for projects that are subject to section 16B.33.  The written 
        request must include a description of the project, the total 
        project cost, a description of any special requirements or 
        unique features of the proposed project, and other information 
        requested by the board which will assist the board in carrying 
        out its duties and responsibilities set forth in this section. 
           (b) A request for qualifications or proposals soliciting 
        design-builders shall be prepared for each design-build contract 
        pursuant to subdivision 5 or 7.  The request for qualifications 
        or proposals shall contain, at a minimum, the following elements:
           (1) the identity of the agency for which the project will 
        be built and that will award the design-build contract; 
           (2) procedures for submitting qualifications or proposals, 
        the criteria for evaluation of qualifications or proposals and 
        the relative weight for each criterion and subcriterion, and the 
        procedures for making awards according to the stated criteria 
        and subcriteria, including a reference to the requirements of 
        this section; 
           (3) the proposed terms and conditions for the contract; 
           (4) the desired qualifications of the design-builder and 
        the desired or permitted areas of construction to be performed 
        by named members of the design-build team, if applicable.  The 
        primary designer shall be a named member of the design-build 
        team; 
           (5) the schedule for commencement and completion of the 
        project; 
           (6) any applicable budget limits for the project; 
           (7) the requirements for insurance and statutorily required 
        performance and payment bonds; 
           (8) the identification and location of any other 
        information in the possession or control of the agency that the 
        user agency determines is material, which may include surveys, 
        soils reports, drawings or models of existing structures, 
        environmental studies, photographs, or references to public 
        records; 
           (9) for a design-build design and price-based selection 
        process, the request shall also include the design criteria 
        package, including the performance and technical requirements 
        for the project, and the functional and operational elements for 
        the delivery of the completed project.  The request shall also 
        contain a description of the drawings, specifications, or other 
        submittals to be included with the proposal, with guidance as to 
        the form and level of completeness of the drawings, 
        specifications or submittals that will be acceptable, and the 
        stipend to be paid to the design-builders selected to submit the 
        above described information; and 
           (10) the criteria shall not impose unnecessary conditions 
        beyond reasonable requirements to ensure maximum participation 
        of qualified design-builders.  The criteria shall not consider 
        the collective bargaining status of the design-builder. 
           (c) Notice of requests for qualifications or proposals must 
        be advertised in the State Register.  
           Subd. 4.  [UNIVERSITY OF MINNESOTA PROJECTS.] (a) The 
        University of Minnesota may elect to use the design-build method 
        of project delivery for projects involving construction or major 
        remodeling, as defined in section 16B.335, subdivision 1, with 
        an estimated cost greater than $2,000,000, in which case the 
        University of Minnesota shall submit a written request for a 
        design-builder to the commissioner of administration, who shall 
        forward the request to the board, as provided in subdivision 3.  
        For design-build projects undertaken by the University of 
        Minnesota under this subdivision, the Board of Regents shall 
        exercise the powers and duties of the commissioner granted in 
        subdivisions 5, 6, 7, and 8. 
           (b) When the University of Minnesota undertakes any other 
        project involving construction, renovation, repair, replacement, 
        or rehabilitation, the Board of Regents may, in addition to any 
        other method of project delivery available to the University of 
        Minnesota, submit a written request for a design-builder to the 
        commissioner of administration, who shall forward the request to 
        the board, as provided in subdivision 3. 
           (c) For projects for which the University of Minnesota 
        requests a design-builder, the University of Minnesota may use 
        either the design-build qualification-based selection process 
        under subdivision 5 or the design-build design and price-based 
        selection process under subdivision 7.  The board shall score 
        proposals in accordance with subdivision 5 or 7, as applicable, 
        and narrow the selection to the two highest scoring proposers 
        for recommendation to the Board of Regents.  The Board of 
        Regents shall make the final selection and shall notify the 
        board of the selection.  Meeting records or written evaluations 
        that document the final selection are public records. 
           (d) The University of Minnesota may not utilize 
        design-build contracts for more than five percent of its total 
        projects let, by number, in each of the fiscal years 2006 and 
        2007, and ten percent of its total projects let, by number, in 
        each fiscal year thereafter, that are funded in whole or in part 
        with proceeds from the sale of state general obligation bonds. 
           Subd. 5.  [DESIGN-BUILD QUALIFICATION-BASED SELECTION 
        PROCESS.] In a design-build qualification-based selection 
        process, the following shall apply: 
           (a)(1) the commissioner shall establish procedures for 
        determining the appropriate content of each request for 
        qualifications, the weighted criteria and subcriteria to be used 
        to evaluate the design-builders, and the procedures for 
        evaluating qualifications in an open, competitive, and objective 
        manner; (2) the criteria and subcriteria shall include, but are 
        not limited to, the proposer's experience as a constructor or 
        primary designer, including capacity of key personnel, technical 
        competence and capability to perform, the past performance of 
        the proposer and its employees, its safety record and compliance 
        with state and federal law, and availability to and familiarity 
        with the project locale; (3) the commissioner may include in the 
        request for qualifications criteria a requirement that the 
        proposer include the overhead and fee that the design-builder 
        proposes to charge for its construction services; and (4) the 
        commissioner shall issue a request for qualifications that 
        includes the information as described in subdivision 3. 
           (b) After obtaining and evaluating qualifications from each 
        design-builder, in accordance with the weighted criteria and 
        subcriteria and procedures set forth in the request for 
        qualifications, the board shall select a short list of at least 
        three and no more than five proposals.  The board must receive 
        at least three proposals from design-builders or the 
        commissioner shall either: 
           (1) solicit new proposals; 
           (2) revise the request for qualifications and thereafter 
        solicit new proposals using the revised request for 
        qualifications; or 
           (3) request selection of a primary designer pursuant to 
        section 16B.33, 16C.08, or 16C.095 and proceed with competitive 
        bidding pursuant to sections 16C.25 to 16C.29. 
           (c) The board shall conduct formal interviews with the 
        short list of proposers, but shall not disclose any proprietary 
        or confidential information contained in one proposal to another 
        proposer. 
           (d) The board shall select the design-builder that scores 
        the highest on the evaluation criteria and subcriteria.  The 
        commissioner shall make the award to the design-builder who 
        scores the highest score pursuant to the weighted criteria and 
        subcriteria as determined by the board, unless the commissioner 
        rejects all proposals or proceeds pursuant to paragraphs (f) and 
        (g).  In the case of the Minnesota State Colleges and 
        Universities, the board shall narrow the selection to the two 
        design-builders that score the highest on the evaluation 
        criteria and subcriteria for recommendation to the respective 
        commissioner, and the commissioner shall make the final 
        selection and shall notify the board of the selection. 
           (e) The commissioner shall conduct fee and contract 
        negotiations with the selected design-builder and shall enter 
        into the contract consistent with subdivision 6. 
           (f) If the selected design-builder declines the appointment 
        or is unable to reach agreement with the commissioner on the 
        terms of the contract, the commissioner may, within 60 days 
        after the first selection, request the board to make another 
        selection. 
           (g) If the board fails to make a selection and forward its 
        recommendation to the commissioner within 60 days of the request 
        for a second selection, the commissioner may appoint a 
        design-builder without the recommendation of the board. 
           (h) If a project for which a design-builder has been 
        selected by the board becomes inactive, lapses, or changes as 
        the result of a project phasing, insufficient appropriations, or 
        other reasons, the commissioner may, if the project is 
        reactivated, retain the same design-builder to complete the 
        project. 
           Subd. 6.  [DESIGN-BUILD QUALIFICATIONS-BASED ACCEPTANCE BY 
        COMMISSIONER.] The contract between the commissioner and the 
        design-builder selected under subdivision 5 shall require the 
        following: 
           (a) The design-builder shall develop design documents of 
        the project for review and approval by the commissioner prior to 
        project bidding. 
           (b) The design-builder shall competitively bid all trade 
        contract work for the project from a list of qualified firms, 
        subject to availability of such qualified firms for the specific 
        work.  The list of qualified firms shall be based upon an open, 
        competitive, and objective prequalification process in which the 
        selection criteria includes, in addition to the proposed price, 
        the firm's experience as a constructor or primary designer, 
        including capacity of key personnel, technical competence, 
        capability to perform, the past performance of the firm and its 
        employees, including its safety record and compliance with state 
        and federal law, availability to and familiarity with the 
        project locale, and other considerations as defined by the 
        design-builder and the commissioner.  The design-builder and the 
        commissioner shall jointly determine the composition of the list 
        of qualified firms.  The criteria shall not impose unnecessary 
        conditions beyond reasonable requirements to ensure maximum 
        participation of qualified contractors. 
           (c) With the approval of the commissioner, the 
        design-builder may name either or both a mechanical and 
        electrical subcontractor or subcontractors as a named member of 
        the design-builder's team, and if either or both a mechanical 
        and electrical subcontractor or subcontractors is so named, the 
        design-builder is not required to competitively bid the 
        mechanical or electrical trade contract work.  A named 
        mechanical or electrical subcontractor member of a 
        design-builder's team shall competitively bid all subcontracted 
        portions of the mechanical or electrical subcontractor's work 
        from a list of qualified firms.  Such qualified firms shall be 
        determined as described in paragraph (b).  The commissioner and 
        the design-builder shall agree to a list of labor, materials, 
        and equipment that shall be competitively bid. 
           (d) With the commissioner's approval or request, team 
        members of the design-builder, including the design-builder, may 
        also submit bids for trade contract work. 
           (e) Either or both the mechanical or electrical 
        subcontractor or subcontractors who are named subcontractor 
        members of the design-builder's team shall enter into guaranteed 
        maximum price contracts with the design-builder. 
           (f) The design-builder and the commissioner shall enter 
        into a guaranteed maximum price contract. 
           Subd. 7.  [DESIGN-BUILD DESIGN AND PRICE-BASED 
        PROPOSALS.] (a) In a design and price-based selection process 
        the following shall apply: 
           (1) selection must be based on best value, which includes 
        an evaluation of price and design, and may include other 
        criteria including, but not limited to, the proposer's 
        experience as a constructor or primary designer; 
           (2) the commissioner shall establish procedures for 
        determining the appropriate content of each request for 
        qualifications, and the weighted criteria and subcriteria to be 
        used to evaluate the design-builders including, but not limited 
        to, the proposer's experience as a constructor or primary 
        designer, including capacity of key personnel, technical 
        competence, capability to perform and the past performance of 
        the proposer and its employees, its safety record and compliance 
        with state and federal law, quality and past performance, and 
        the procedures for evaluating qualifications in an open, 
        competitive, and objective manner; and 
           (3) the commissioner shall issue a request for 
        qualifications that includes the information as described in 
        subdivision 3. 
           (b) After obtaining and evaluating qualifications from each 
        design-builder, in accordance with the weighted criteria and 
        subcriteria and procedures set forth in the request for 
        qualifications, the board shall select a short list of three 
        proposers.  The board must receive at least three proposals from 
        design-builders or the commissioner shall either: 
           (1) solicit new proposals; 
           (2) revise the request for qualifications and thereafter 
        solicit new proposals using the revised request for 
        qualifications; or 
           (3) request selection of a primary designer pursuant to 
        section 16B.33, 16C.08, or 16C.095 and proceed with competitive 
        bidding pursuant to sections 16C.25 to 16C.29. 
           (c) The commissioner shall issue a request for proposals to 
        the selected design-builders.  The submitted proposals shall 
        consist of, at a minimum, the following elements: 
           (1) preliminary plans and specifications and other 
        information in sufficient detail to describe the character, 
        quality, and scope of the project; 
           (2) a design and construction critical path schedule; 
           (3) the price at which the design-builder will complete all 
        design and construction requested in the proposal for the 
        project if selected; and 
           (4) other materials the board determines are necessary to 
        fix the design, schedule, and cost of the project. 
           (d) Proposals must be sealed and may not be opened until 
        the expiration of the time established for making proposals as 
        set forth in the request for proposals. 
           (e) Proposals must identify the primary designer and the 
        primary construction contracting entity that are members of the 
        design-builders team. 
           (f) The amount and type of design services requested by the 
        board shall not be exceeded by those submitting proposals.  
        Proposals exceeding the amount and type of design services 
        requested by the board may be rejected by the board.  Unless 
        compensated in excess of the minimum stipend for their effort, 
        design-builders must not be required to submit detailed 
        architectural or engineering design or construction documents as 
        part of the proposal. 
           (g) Except as described in paragraph (h), the commissioner 
        shall award to each design-builder that submits a responsive 
        design-build proposal under this subdivision, a stipend in an 
        amount of not less than 0.3 percent of the commissioner's 
        estimated cost of design and construction.  If the request for 
        proposals requires extensive design services beyond preliminary 
        plans and specifications as requested as part of the proposal, 
        the stipend shall be adjusted to an amount commensurate with the 
        amount of design services requested for each proposal. 
           (h) No stipend shall be awarded to the design-builder 
        selected to complete the project. 
           (i) For projects where the design-builder accepts the 
        stipend offered by the board, the commissioner shall be deemed 
        the owner of the design, subject to the rights of the proposer 
        to such design for publication and use in other projects.  
        However, the use of the design in its totality, or near 
        totality, by the commissioner is prohibited. 
           (j) The commissioner may require each design-builder to 
        submit with its proposal a cash deposit, letter of credit in a 
        form acceptable to the commissioner, or bid bond not to exceed 
        five percent of the maximum cost of the design-builder's 
        proposal.  If the proposal is accepted but the design-builder 
        fails, without good cause to execute the design-build contract, 
        the deposit or bond is forfeited in an amount not to exceed the 
        difference between the proposal in question and the next highest 
        proposal. 
           Subd. 8.  [DESIGN-BUILD DESIGN AND PRICE-BASED SELECTION 
        PROCESS.] (a) The board shall review submissions as described in 
        subdivision 7; conduct formal interviews with all three 
        proposers but not allow the disclosure of any price, 
        proprietary, or confidential information contained in one 
        proposal to another proposer; and select the proposal that 
        scores the highest based on the weighted evaluation criteria and 
        subcriteria, except for projects under the control of Minnesota 
        State Colleges and Universities.  The commissioner shall make 
        the award to the design-builder who scores the highest score 
        pursuant to the weighted criteria and subcriteria as determined 
        by the board, unless the commissioner rejects all proposals or 
        proceeds pursuant to paragraph (c) or (d).  For Minnesota State 
        Colleges and Universities projects, the board shall narrow the 
        selection to the two highest scoring proposers for 
        recommendation to the commissioner, and the commissioner shall 
        review the submissions as described in subdivision 7; conduct 
        formal interviews with both proposers recommended by the board, 
        but not allow the disclosure of any price, proprietary, or 
        confidential information contained in one proposal to another 
        proposer; and select the proposal that scores the highest based 
        on the commissioner's application of the weighted evaluation 
        criteria and subcriteria; and shall notify the board of the 
        selection. 
           (b) After a proposal is accepted, the commissioner is 
        deemed the owner of the design, subject to the rights of the 
        proposer to such design for publication and use in other 
        projects. 
           (c) After a proposal is accepted, the commissioner and the 
        design-builder shall enter into a fixed-price contract. 
           (d) If the design-builder selected for a project declines 
        the appointment or is unable to reach agreement with the 
        commissioner concerning the terms of the contract, the 
        commissioner may, within 60 days after the first selection, 
        request the board to make another selection. 
           (e) If the design-builder selected for a project, prior to 
        executing a design-build contract, replaces either the primary 
        designer or the primary construction contracting entity, the 
        commissioner shall notify the board of the replacement and 
        request the board to either approve the new design-builder or to 
        select another design-builder. 
           (f) If the board fails to make a second selection as 
        described in paragraph (d) or (e) and forward its recommendation 
        to the commissioner within 60 days of the commissioner's request 
        for a second selection, the commissioner may appoint a 
        design-builder to the project without the recommendation of the 
        board. 
           Sec. 8.  [16C.34] [CONSTRUCTION MANAGER AT RISK.] 
           Subdivision 1.  [SOLICITATION OF QUALIFICATIONS.] (a) Every 
        user agency, except the Capitol Area Architectural and Planning 
        Board, shall submit a written request for proposals for a 
        construction manager at risk for its project to the 
        commissioner.  The written request for proposals must include a 
        description of the project, the estimated cost of completing the 
        project, a description of any special requirements or unique 
        features of the proposed project, and other information which 
        will assist the commissioner in carrying out its duties and 
        responsibilities set forth in this section. 
           (b) The commissioner may include in the request for 
        qualifications criteria a requirement that the proposer include 
        the overhead and fee that the construction manager at risk 
        proposes to charge for its services. 
           (c) A request for qualifications shall be prepared for each 
        construction manager at risk contract as provided in this 
        section.  The request for qualifications shall contain, at a 
        minimum, the following elements: 
           (1) the identity of the agency for which the project will 
        be built and that will award the construction manager at risk 
        contract; 
           (2) procedures for submitting qualifications, the criteria 
        and subcriteria for evaluation of qualifications and the 
        relative weight for each criteria and subcriteria, and the 
        procedures for making awards in an open, competitive, and 
        objective manner, and according to the stated criteria and 
        subcriteria, including a reference to the requirements of this 
        section; 
           (3) the terms and conditions for the contract; 
           (4) the qualifications that the construction manager at 
        risk shall be desired to have; 
           (5) a schedule for commencement and completion of the 
        project; 
           (6) any applicable budget limits for the project; 
           (7) requirements for insurance, statutorily required 
        performance and payment bonds; 
           (8) identification and location of any other information in 
        the possession or control of the agency that the user agency 
        determines is material, which may include surveys, soils 
        reports, drawings or models of existing structures, 
        environmental studies, photographs, or references to public 
        records; and 
           (9) criteria shall not impose unnecessary conditions beyond 
        reasonable requirements to ensure maximum participation of 
        construction managers at risk.  The criteria shall not consider 
        the collective bargaining status of the construction manager at 
        risk. 
           (d) Notice of requests for qualifications must be 
        advertised in the State Register.  
           Subd. 2.  [CONSTRUCTION MANAGER AT RISK SELECTION PROCESS.] 
        In a construction manager at risk selection process, the 
        following shall apply: 
           (a)(i) Upon receipt of a written request from a user agency 
        for a construction manager at risk for its project, the 
        commissioner shall create a selection committee composed of a 
        minimum of three persons, at least one of whom has construction 
        industry expertise; (ii) the selection committee shall establish 
        procedures for determining the appropriate content of each 
        request for qualifications, the weighted criteria and 
        subcriteria to be used to score the proposals of the 
        construction managers at risk, and shall establish procedures 
        for evaluating qualifications in an open, competitive, and 
        objective manner; and (iii) the commissioner shall issue a 
        request for qualifications that includes the information as 
        described in subdivision 1. 
           (b) In accordance with the criteria and procedures set 
        forth in the request for qualifications, the selection committee 
        shall evaluate the construction manager at risk's experience as 
        a constructor, including, but not limited to, capacity of key 
        personnel, technical competence, capability to perform, the past 
        performance of the construction manager at risk and its 
        employees, its safety record and compliance with state and 
        federal law, availability to and familiarity with the project 
        locale, and other appropriate facts submitted by the 
        construction manager at risk in response to the request for 
        qualifications.  The commissioner must receive at least three 
        proposals from construction managers or the commissioner may 
        either (i) solicit new proposals; (ii) request the selection 
        committee to revise the request for qualifications and 
        thereafter solicit new proposals using the revised request for 
        qualifications; (iii) select another allowed procurement method; 
        or (iv) reject all proposals. 
           (c)(i) The selection committee shall review the proposers' 
        qualifications and create a short list of three to five 
        proposals of construction managers at risk; (ii) the 
        commissioner shall issue a request for proposal requiring fee 
        and expense proposals and other information as desired from the 
        short-listed construction managers at risk; (iii) the selection 
        committee shall conduct formal interviews with the short-listed 
        construction managers at risk but shall not disclose any 
        proprietary or confidential information contained in one 
        proposal to another proposer; (iv) the selection committee shall 
        recommend the construction manager at risk achieving the highest 
        score on the evaluation criteria as described in subdivision 1, 
        paragraph (b). 
           (d) The board shall select the primary designer as 
        described in section 16B.33 or in the case of the commissioner, 
        section 16C.08 or 16C.095. 
           Subd. 3.  [CONSTRUCTION MANAGER AT RISK CONTRACT.] (a) The 
        commissioner shall conduct contract negotiations with the 
        recommended construction manager at risk. 
           (b) If the construction manager at risk selected for the 
        project declines the appointment or is unable to reach agreement 
        with the commissioner concerning the fee or terms of the 
        contract, the commissioner shall, within 60 days after the first 
        selection, request the selection committee to make another 
        recommendation. 
           (c) If the selection committee fails to make a second 
        recommendation and forward it to the commissioner within 60 days 
        of the commissioner's request for a second recommendation, the 
        commissioner may select a construction manager at risk without 
        the recommendation of the selection committee. 
           (d) The primary designer selected by the board shall 
        develop various design documents for review and approval by the 
        commissioner. 
           (e) The construction manager at risk shall competitively 
        bid all trade contract work for the project from a list of 
        qualified firms, subject to availability of such qualified firms 
        for the specific work.  The list of qualified firms shall be 
        based upon an open, competitive, and objective prequalification 
        process in which the selection criteria includes the firm's 
        experience as a constructor, including capacity of key 
        personnel, technical competence, capability to perform, the past 
        performance of the firm and its employees, including its safety 
        record and compliance with state and federal law, availability 
        to and familiarity with the project locale, and other 
        considerations as defined by the construction manager at risk 
        and the commissioner.  The construction manager at risk and the 
        commissioner shall jointly determine the composition of the list 
        of qualified firms.  The criteria shall not impose unnecessary 
        conditions beyond reasonable requirements to ensure maximum 
        participation of qualified contractors.  With the commissioner's 
        approval or request, the construction manager at risk may also 
        submit bids for trade contract work. 
           (f) The construction manager at risk and the commissioner 
        shall enter into a guaranteed maximum price contract for the 
        project. 
           Sec. 9.  [16C.35] [JOB ORDER CONTRACTING.] 
           Subdivision 1.  [AUTHORITY.] The commissioner may undertake 
        construction utilizing job order contracting for projects that 
        do not exceed a construction cost of $250,000. 
           Subd. 2.  [JOB ORDER CONTRACTING REQUEST FOR 
        QUALIFICATIONS.] (a) The commissioner is authorized to issue a 
        request for qualifications that includes the criteria that will 
        be used for the projects, provided that these criteria do not 
        unduly restrict competition, nor impose conditions beyond 
        reasonable requirements to ensure maximum participation of all 
        qualified contractors, and does not relate to the collective 
        bargaining status of the contractor. 
           (b) The request for qualifications must be publicized in a 
        manner designated by the commissioner that ensures open and 
        unrestricted access for any potential responder.  To the extent 
        practical, this must include posting on a state Web site.  To 
        the extent practical, the commissioner must give notice to 
        representatives of targeted group businesses designated under 
        section 16C.16.  
           Subd. 3.  [QUALIFIED CONTRACTORS.] (a) The commissioner 
        shall review the responses to the request for qualifications and 
        determine responder's ability to enter into the master contract 
        that will be utilized for the projects.  The commissioner shall 
        establish a list of qualified contractors based on the 
        proposers' ability to enter into a master contract as described 
        in the request for qualifications. 
           (b) The commissioner shall enter into master contracts with 
        all qualified contractors. 
           (c) The commissioner shall establish procedures to allow 
        firms to submit qualifications at least annually to allow 
        placement on the list of contractors qualified to enter into a 
        master contract. 
           Subd. 4.  [CONSTRUCTION SERVICES BIDDING.] The commissioner 
        shall request bids for construction services for any project 
        using job order contracting from qualified contractors as 
        follows: 
           (1) for construction projects up to a maximum cost of 
        $50,000, the commissioner shall request a minimum of two bids; 
           (2) for construction projects with a cost greater than 
        $50,000 but less than or equal to $100,000 the commissioner 
        shall request a minimum of three bids; 
           (3) for construction projects with a cost greater than 
        $100,000 but less than or equal to $250,000, the commissioner 
        shall request a minimum of four bids. 
           Subd. 5.  [QUALIFIED CONTRACTOR SELECTION.] The 
        commissioner shall select the contractor who submits the lowest 
        price bid for the construction services proposed. 
           Subd. 6.  [REASONABLE DISTRIBUTION OF BID REQUESTS AMONG 
        QUALIFIED CONTRACTORS.] The commissioner in requesting bidding 
        for projects using job order contracting as described in this 
        section shall develop a system to ensure a reasonable 
        opportunity for all qualified contractors to bid on construction 
        services on a periodic basis. 
           Sec. 10.  [EFFECTIVE DATE.] 
           Sections 1 to 9 are effective the day following final 
        enactment. 
           Presented to the governor May 20, 2005 
           Signed by the governor May 24, 2005, 1:17 p.m.