1.1 	A bill for an act
1.2 	relating to state government; regulating state
1.3 	construction contracts; amending Minnesota Statutes
1.4 	2004, sections 16B.31, subdivision 1; 16B.33,
1.5 	subdivision 1; 16C.26, subdivisions 3, 4; 16C.28,
1.6 	subdivision 2; proposing coding for new law in
1.7 	Minnesota Statutes, chapter 16C.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 16B.31,
1.10 	subdivision 1, is amended to read:
1.11 		Subdivision 1.Construction plans and specifications;
1.12 	design-build, construction manager at risk, or job order
1.13 	contracting.  (a) The commissioner shall (1) have plans and
1.14 	specifications prepared for the construction, alteration, or
1.15 	enlargement of all state buildings, structures, and other
1.16 	improvements except highways and bridges, and except for
1.17 	buildings and structures under the control of the Board of
1.18 	Regents of the University of Minnesota or of the Board of
1.19 	Trustees of the Minnesota State Colleges and Universities; (2)
1.20 	approve those plans and specifications; (3) advertise for bids
1.21 	and award all contracts in connection with the improvements; (4)
1.22 	supervise and inspect all work relating to the improvements; (5)
1.23 	approve all lawful changes in plans and specifications after the
1.24 	contract for an improvement is let; and (6) approve estimates
1.25 	for payment.  This subdivision does not apply to the
1.26 	construction of the Zoological Gardens.
2.1 	(b) MS 2002 (Expired)
2.2 	(c) MS 2002 (Expired)
2.3 	(b) Notwithstanding any other law to the contrary, the
2.4 	commissioner may:
2.5 	(1) use a design-build method of project delivery and award
2.6 	a design-build contract as provided in sections 16C.32 and
2.7 	16C.33;
2.8 	(2) use a construction manager at risk method of project
2.9 	delivery and award a construction manager at risk contract on
2.10 	the basis of the selection criteria described in section 16C.34;
2.11 	or 
2.12 	(3) use a job order contracting contractor selection as
2.13 	described in section 16C.35.
2.14 	(c) The commissioner may require a primary designer and a
2.15 	construction manager at risk, by contract, to cooperate in the
2.16 	design, planning and scheduling, and construction process.  The
2.17 	contract must not make the primary designer or construction
2.18 	manager at risk a subcontractor or joint venture partner to the
2.19 	other or limit the primary designer's or construction manager at
2.20 	risk's independent obligations to the commissioner.
2.21 	(d) For projects undertaken by the Minnesota State Colleges
2.22 	and Universities system, the powers and duties granted in
2.23 	paragraphs (b) and (c) may be exercised by its board of trustees.
2.24 	(e) The commissioner, the board, the Board of Regents of
2.25 	the University of Minnesota, and the Board of Trustees of the
2.26 	Minnesota State Colleges and Universities shall create a panel
2.27 	of representatives, including representatives of the
2.28 	construction industry and the architecture and engineering
2.29 	professions, to evaluate the use of design-build and the
2.30 	procedures for design-builder selection under section 16C.31,
2.31 	and shall report to the legislature on or before January 1,
2.32 	2004, as to the success of design-build as a method of
2.33 	construction and the need and desirability for any changes in
2.34 	the selection procedure.

2.35 	Sec. 2. Minnesota Statutes 2004, section 16B.33,
2.36 	subdivision 1, is amended to read:
3.1 		Subdivision 1.Definitions.  As used in this section, the
3.2 	following terms have the meanings given them:
3.3 	(a) "Agency" has the meaning given in section 16B.01.
3.4 	(b) "Architect" means an architect or landscape architect
3.5 	registered to practice under sections 326.02 to 326.15.
3.6 	(c) "Board" means the state Designer Selection Board.
3.7 	(d) "Design-build" means the process of entering into and
3.8 	managing a single contract between the commissioner and the
3.9 	design-builder in which the design-builder agrees to both design
3.10 	and construct a project as specified in the contract at a
3.11 	guaranteed maximum or a fixed price.
3.12 	(e) "Design-builder" means a person who proposes to design
3.13 	and construct a project in accordance with the requirements of
3.14 	section 16C.33.
3.15 	(f) "Designer" means an architect or engineer, or a
3.16 	partnership, association, or corporation comprised primarily of
3.17 	architects or engineers or of both architects and engineers.
3.18 	(e) (g) "Engineer" means an engineer registered to practice
3.19 	under sections 326.02 to 326.15.
3.20 	(f) (h) "Person" includes an individual, corporation,
3.21 	partnership, association, or any other legal entity.
3.22 	(g) (i) "Primary designer" means the designer who is to
3.23 	have primary design responsibility for a project, and does not
3.24 	include designers who are merely consulted by the user agency
3.25 	and do not have substantial design responsibility, or designers
3.26 	who will or may be employed or consulted by the primary designer.
3.27 	(h) (j) "Project" means an undertaking to construct, erect,
3.28 	or remodel a building by or for the state or an agency.
3.29 	(i) (k) "User agency" means the agency undertaking a
3.30 	specific project. For projects undertaken by the state of
3.31 	Minnesota, "user agency" means the Department of Administration
3.32 	or a state agency with an appropriate delegation to act on
3.33 	behalf of the Department of Administration.

3.34 	Sec. 3. Minnesota Statutes 2004, section 16C.26,
3.35 	subdivision 3, is amended to read:
3.36 		Subd. 3.Publication of notice; expenditures over
4.1 	$15,000 $25,000.  If the amount of an expenditure is estimated
4.2 	to exceed $15,000 $25,000, sealed bids must be solicited by
4.3 	public notice inserted at least once in a newspaper or trade
4.4 	journal not less than seven days before the final date of
4.5 	submitting bids in a manner designated by the commissioner. The
4.6 	commissioner shall designate the newspaper or trade journal for
4.7 	that publication and may designate different newspapers or
4.8 	journals according to the nature of the purchase or
4.9 	contract.To the extent practical, this must include posting on
4.10 	a state Web site.  For expenditures over $50,000,the
4.11 	commissioner shall also solicit sealed bids by sending providing 
4.12 	notices by mail to all prospective bidders known to the
4.13 	commissioner and by posting notice on a public bulletin board in
4.14 	the commissioner's office a state Web site at least five seven 
4.15 	days before the final date of submitting bids.  All bids over
4.16 	$50,000 must be sealed when they are received and must be opened
4.17 	in public at the hour stated in the notice.  All original bids
4.18 	and all documents pertaining to the award of a contract must be
4.19 	retained and made a part of a permanent file or record and
4.20 	remain open to public inspection.

4.21 	Sec. 4. Minnesota Statutes 2004, section 16C.26,
4.22 	subdivision 4, is amended to read:
4.23 		Subd. 4.Building and construction contracts;
4.24 	$15,000 $50,000 or less. All contracts, the amount of which is
4.25 	estimated to be $15,000 or less, may be made either upon
4.26 	competitive bids or in the open market, in the discretion of the
4.27 	commissioner.  So far as practicable, however, they must be
4.28 	based on at least three competitive bids which must be
4.29 	permanently recorded.An informal bid may be used for building,
4.30 	construction, and repair contracts that are estimated at less
4.31 	than $50,000.  Informal bids must be authenticated by the bidder
4.32 	in a manner specified by the commissioner.

4.33 	Sec. 5. Minnesota Statutes 2004, section 16C.28,
4.34 	subdivision 2, is amended to read:
4.35 		Subd. 2.Alterations and erasures.  A bid containing an
4.36 	alteration or erasure of any price contained in the bid which is
5.1 	used in determining the lowest responsible bid must be rejected
5.2 	unless the alteration or erasure is corrected under this
5.3 	subdivision in a manner that is clear and authenticated by an
5.4 	authorized representative of the responder.  An alteration or
5.5 	erasure may be crossed out and the correction printed in ink or
5.6 	typewritten adjacent to it and initialed in ink by the person
5.7 	signing the bid by an authorized representative of the responder.

5.8 	Sec. 6. [16C.32] DESIGN-BUILD, CONSTRUCTION MANAGER AT
5.9 	RISK, AND JOB ORDER CONTRACTING CONTRACTS.
5.10 		Subdivision 1.Definitions. As used in sections 16C.32
5.11 	to 16C.35, the following terms have the meanings given them,
5.12 	unless the context clearly indicates otherwise:
5.13 	(1) "acceptance" means a formal resolution of the
5.14 	commissioner authorizing the execution of a design-build,
5.15 	construction manager at risk, or job order contracting contract;
5.16 	(2) "agency" means any state officer, employee, board,
5.17 	commission, authority, department, or other agency of the
5.18 	executive branch of state government.  Unless specifically
5.19 	indicated otherwise, as used in sections 16C.32 to 16C.35,
5.20 	agency also includes the Minnesota State Colleges and
5.21 	Universities;
5.22 	(3) "architect" means an architect or landscape architect
5.23 	registered to practice under sections 326.02 to 326.15;
5.24 	(4) "board" means the state Designer Selection Board,
5.25 	unless the estimated cost of the project is less than
5.26 	$2,000,000, in which case the commissioner may act as the board;
5.27 	(5) "Capitol Area Architectural and Planning Board" means
5.28 	the board established to govern the capitol area under chapter
5.29 	15B;
5.30 	(6) "commissioner" means the commissioner of administration
5.31 	or the Board of Trustees of the Minnesota State Colleges and
5.32 	Universities, whichever controls a project;
5.33 	(7) "construction manager at risk" means a person who is
5.34 	selected by the commissioner to act as a construction manager to
5.35 	manage the construction process, which includes, but is not
5.36 	limited to, responsibility for the price, schedule, and
6.1 	workmanship of the construction performed in accordance with the
6.2 	procedures of section 16C.34;
6.3 	(8) "construction manager at risk contract" means a
6.4 	contract for construction of a project between a construction
6.5 	manager at risk and the commissioner, which contract shall
6.6 	include a guaranteed maximum price, construction schedule, and
6.7 	workmanship of the construction performed;
6.8 	(9) "design-build contract" means a contract between the
6.9 	commissioner and a design-builder to furnish the architectural,
6.10 	engineering, and related design services as well as the labor,
6.11 	materials, supplies, equipment, and construction services for a
6.12 	project;
6.13 	(10) "design and price-based proposal" means the proposal
6.14 	to be submitted by a design-builder in the design and
6.15 	price-based selection process, as described in section 16C.33,
6.16 	which proposal meets the requirements of section 16C.33,
6.17 	subdivision 7, paragraph (c), in such detail as required in the
6.18 	request for proposals;
6.19 	(11) "design and price-based selection" means the selection
6.20 	of a design-builder as described in section 16C.33, subdivision
6.21 	8;
6.22 	(12) "design criteria package" means performance criteria
6.23 	prepared by a design criteria professional who shall be either
6.24 	an employee of the commissioner or shall be selected in
6.25 	compliance with section 16B.33, 16C.08, or 16C.095;
6.26 	(13) "design criteria professional" means a person licensed
6.27 	under chapter 326, or a person who employs an individual or
6.28 	individuals licensed under chapter 326, required to design a
6.29 	project, and who is employed by or under contract to the
6.30 	commissioner to provide professional, architectural, or
6.31 	engineering services in connection with the preparation of the
6.32 	design criteria package;
6.33 	(14) "guaranteed maximum price" means the maximum amount
6.34 	that a design-builder, construction manager at risk, or
6.35 	subcontractor will be paid pursuant to a contract to perform a
6.36 	defined scope of work;
7.1 	(15) "guaranteed maximum price contract" means a contract
7.2 	under which a design-builder, construction manager, or
7.3 	subcontractor is paid on the basis of their actual cost to
7.4 	perform the work specified in the contract plus an amount for
7.5 	overhead and profit, the sum of which must not exceed the
7.6 	guaranteed maximum price set forth in the contract;
7.7 	(16) "job order contracting" means a project delivery
7.8 	method that requests a limited number of bids from a list of
7.9 	qualified contractors, selected from a registry of qualified
7.10 	contractors who have been prescreened and who have entered into
7.11 	master contracts with the commissioner, as provided in section
7.12 	16C.35;
7.13 	(17) "past performance" or "experience" does not include
7.14 	the exercise or assertion of a person's legal rights;
7.15 	(18) "person" includes an individual, corporation,
7.16 	partnership, association, or any other legal entity;
7.17 	(19) "project" means an undertaking to construct, alter, or
7.18 	enlarge a building, structure, or other improvements, except
7.19 	highways and bridges, by or for the state or an agency;
7.20 	(20) "qualifications-based selection" means the selection
7.21 	of a design-builder as provided in section 16C.33;
7.22 	(21) "request for qualifications" means the document or
7.23 	publication soliciting qualifications for a design-build,
7.24 	construction manager at risk, or job order contracting contract
7.25 	as provided in sections 16C.33 to 16C.35;
7.26 	(22) "request for proposals" means the document or
7.27 	publication soliciting proposals for a design-build or
7.28 	construction manager at risk contract as provided in sections
7.29 	16C.33 and 16C.34; and 
7.30 	(23) "trade contract work" means the furnishing of labor,
7.31 	materials, or equipment by contractors or vendors that are
7.32 	incorporated into the completed project or are major components
7.33 	of the means of construction.  Work performed by trade
7.34 	contractors involves specific portions of the project, but not
7.35 	the entire project.
7.36 		Subd. 2.Authority. (a) Subject to limitations in
8.1 	sections 16B.31, subdivision 1; 16B.33, subdivision 1; 16C.16;
8.2 	and 16C.32 to 16C.34, and notwithstanding any other law to the
8.3 	contrary, the commissioner may:
8.4 	(1) solicit and award a design-build contract on the basis
8.5 	of either a qualifications based or a design and price-based
8.6 	selection process provided in section 16C.33 if the conditions
8.7 	in clause (4) are met;
8.8 	(2) select a construction manager at risk as provided in
8.9 	section 16C.34, and award a guaranteed maximum price contract
8.10 	for a construction manager at risk if the conditions of clause
8.11 	(5) are met;
8.12 	(3) select a contractor by a job order contracting delivery
8.13 	method as provided in section 16C.35;
8.14 	(4) the commissioner may not utilize design-build contracts
8.15 	for more than five percent of its total projects let, by number,
8.16 	in each of the fiscal years 2006 and 2007, and ten percent of
8.17 	its total projects let, by number, in each fiscal year
8.18 	thereafter, that are funded in whole or in part with proceeds
8.19 	from the sale of state general obligation bonds; and 
8.20 	(5) the commissioner may not utilize construction manager
8.21 	at risk contracts for more than five percent of its total
8.22 	projects let, by number, in each of the fiscal years 2006 and
8.23 	2007, and ten percent of its total projects let, by number, in
8.24 	each fiscal year thereafter, that are funded in whole or in part
8.25 	with proceeds from the sale of state general obligation bonds.
8.26 	(b) Pursuant to section 16B.31, subdivision 4, if the
8.27 	project is within the Capitol area, the project shall comply
8.28 	with sections 15B.03, subdivision 3; 15B.08, subdivision 2;
8.29 	15B.10; and 15B.15, subdivision 4.
8.30 	(c) The commissioner shall, for each design-build or
8.31 	construction manager at risk contract, make a written
8.32 	determination, including specific findings, indicating whether
8.33 	use of the design-build or construction manager at risk
8.34 	procurement serves the public interest.
8.35 	(d) The solicitation of requests for qualifications or
8.36 	proposals does not obligate the commissioner to enter into a
9.1 	design-build or construction manager at risk contract.  In
9.2 	accordance with the stated criteria and subcriteria for
9.3 	evaluating qualifications or proposals, the commissioner may
9.4 	accept or reject any or all responses received as a result of
9.5 	the request.  The solicitation for qualifications or proposals
9.6 	may be canceled at any time in the commissioner's sole
9.7 	discretion if it is considered to be in the public's best
9.8 	interest.  If the commissioner rejects all responses or cancels
9.9 	the solicitation for proposals, the commissioner may resolicit a
9.10 	request for qualifications or proposals using the same or
9.11 	different requirements or request selection of a primary
9.12 	designer pursuant to section 16B.33, 16C.08, or 16C.095 and
9.13 	proceed with competitive bidding pursuant to sections 16C.25 to
9.14 	16C.29.
9.15 		Subd. 3.Report to the legislature. The commissioner
9.16 	shall report to the legislature by January 15, 2010, the number
9.17 	of projects and the total cost of those projects that were
9.18 	delivered under contracts authorized under subdivision 2 of this
9.19 	section.

9.20 	Sec. 7. [16C.33] DESIGN-BUILD.
9.21 		Subdivision 1.Conflict of interest. A board member may
9.22 	not participate in the review, discussion, or selection of a
9.23 	primary designer, a design-builder, or a firm in which the
9.24 	member has a financial interest.
9.25 		Subd. 2.Design builder licensing requirements. (a) Each
9.26 	design-builder must be, employ, or have as a partner, member,
9.27 	coventurer, or subcontractor, persons or a firm with persons who
9.28 	are duly licensed and registered to provide the services
9.29 	required to complete the project and do business in this state.
9.30 	(b) A design-builder may contract with the commissioner to
9.31 	provide professional or construction services for which the
9.32 	design-builder is not itself licensed, registered, or qualified
9.33 	to perform, so long as the design-builder provides such services
9.34 	through subcontracts with duly licensed, registered, or
9.35 	otherwise qualified persons in accordance with this section.
9.36 	(c) Nothing in this section or section 16C.32 is intended
10.1 	to limit or eliminate the responsibility or liability owed by an
10.2 	architect or engineer on a design-build project to the
10.3 	commissioner and third parties under existing law.  The design
10.4 	service portion of a design-build contract is considered a
10.5 	service and not a product.
10.6 		Subd. 3.Solicitation of qualifications or proposals. (a)
10.7 	Every user agency, except the Capitol Area Architectural and
10.8 	Planning Board, shall submit a written request for a
10.9 	design-builder for its project to the commissioner who shall
10.10 	forward the request to the board, consistent with section
10.11 	16B.33, subdivision 3a.  The University of Minnesota shall
10.12 	follow the process in subdivision 4 to select design-builders
10.13 	for projects that are subject to section 16B.33.  The written
10.14 	request must include a description of the project, the total
10.15 	project cost, a description of any special requirements or
10.16 	unique features of the proposed project, and other information
10.17 	requested by the board which will assist the board in carrying
10.18 	out its duties and responsibilities set forth in this section.
10.19 	(b) A request for qualifications or proposals soliciting
10.20 	design-builders shall be prepared for each design-build contract
10.21 	pursuant to subdivision 5 or 7.  The request for qualifications
10.22 	or proposals shall contain, at a minimum, the following elements:
10.23 	(1) the identity of the agency for which the project will
10.24 	be built and that will award the design-build contract;
10.25 	(2) procedures for submitting qualifications or proposals,
10.26 	the criteria for evaluation of qualifications or proposals and
10.27 	the relative weight for each criterion and subcriterion, and the
10.28 	procedures for making awards according to the stated criteria
10.29 	and subcriteria, including a reference to the requirements of
10.30 	this section;
10.31 	(3) the proposed terms and conditions for the contract;
10.32 	(4) the desired qualifications of the design-builder and
10.33 	the desired or permitted areas of construction to be performed
10.34 	by named members of the design-build team, if applicable.  The
10.35 	primary designer shall be a named member of the design-build
10.36 	team;
11.1 	(5) the schedule for commencement and completion of the
11.2 	project;
11.3 	(6) any applicable budget limits for the project;
11.4 	(7) the requirements for insurance and statutorily required
11.5 	performance and payment bonds;
11.6 	(8) the identification and location of any other
11.7 	information in the possession or control of the agency that the
11.8 	user agency determines is material, which may include surveys,
11.9 	soils reports, drawings or models of existing structures,
11.10 	environmental studies, photographs, or references to public
11.11 	records;
11.12 	(9) for a design-build design and price-based selection
11.13 	process, the request shall also include the design criteria
11.14 	package, including the performance and technical requirements
11.15 	for the project, and the functional and operational elements for
11.16 	the delivery of the completed project.  The request shall also
11.17 	contain a description of the drawings, specifications, or other
11.18 	submittals to be included with the proposal, with guidance as to
11.19 	the form and level of completeness of the drawings,
11.20 	specifications or submittals that will be acceptable, and the
11.21 	stipend to be paid to the design-builders selected to submit the
11.22 	above described information; and 
11.23 	(10) the criteria shall not impose unnecessary conditions
11.24 	beyond reasonable requirements to ensure maximum participation
11.25 	of qualified design-builders.  The criteria shall not consider
11.26 	the collective bargaining status of the design-builder.
11.27 	(c) Notice of requests for qualifications or proposals must
11.28 	be advertised in the State Register.
11.29 		Subd. 4.University of minnesota projects. (a) The
11.30 	University of Minnesota may elect to use the design-build method
11.31 	of project delivery for projects involving construction or major
11.32 	remodeling, as defined in section 16B.335, subdivision 1, with
11.33 	an estimated cost greater than $2,000,000, in which case the
11.34 	University of Minnesota shall submit a written request for a
11.35 	design-builder to the commissioner of administration, who shall
11.36 	forward the request to the board, as provided in subdivision 3.
12.1 	For design-build projects undertaken by the University of
12.2 	Minnesota under this subdivision, the Board of Regents shall
12.3 	exercise the powers and duties of the commissioner granted in
12.4 	subdivisions 5, 6, 7, and 8.
12.5 	(b) When the University of Minnesota undertakes any other
12.6 	project involving construction, renovation, repair, replacement,
12.7 	or rehabilitation, the Board of Regents may, in addition to any
12.8 	other method of project delivery available to the University of
12.9 	Minnesota, submit a written request for a design-builder to the
12.10 	commissioner of administration, who shall forward the request to
12.11 	the board, as provided in subdivision 3.
12.12 	(c) For projects for which the University of Minnesota
12.13 	requests a design-builder, the University of Minnesota may use
12.14 	either the design-build qualification-based selection process
12.15 	under subdivision 5 or the design-build design and price-based
12.16 	selection process under subdivision 7.  The board shall score
12.17 	proposals in accordance with subdivision 5 or 7, as applicable,
12.18 	and narrow the selection to the two highest scoring proposers
12.19 	for recommendation to the Board of Regents.  The Board of
12.20 	Regents shall make the final selection and shall notify the
12.21 	board of the selection.  Meeting records or written evaluations
12.22 	that document the final selection are public records.
12.23 	(d) The University of Minnesota may not utilize
12.24 	design-build contracts for more than five percent of its total
12.25 	projects let, by number, in each of the fiscal years 2006 and
12.26 	2007, and ten percent of its total projects let, by number, in
12.27 	each fiscal year thereafter, that are funded in whole or in part
12.28 	with proceeds from the sale of state general obligation bonds.
12.29 		Subd. 5.Design-build qualification-based selection
12.30 	process. In a design-build qualification-based selection
12.31 	process, the following shall apply:
12.32 	(a)(1) the commissioner shall establish procedures for
12.33 	determining the appropriate content of each request for
12.34 	qualifications, the weighted criteria and subcriteria to be used
12.35 	to evaluate the design-builders, and the procedures for
12.36 	evaluating qualifications in an open, competitive, and objective
13.1 	manner; (2) the criteria and subcriteria shall include, but are
13.2 	not limited to, the proposer's experience as a constructor or
13.3 	primary designer, including capacity of key personnel, technical
13.4 	competence and capability to perform, the past performance of
13.5 	the proposer and its employees, its safety record and compliance
13.6 	with state and federal law, and availability to and familiarity
13.7 	with the project locale; (3) the commissioner may include in the
13.8 	request for qualifications criteria a requirement that the
13.9 	proposer include the overhead and fee that the design-builder
13.10 	proposes to charge for its construction services; and (4) the
13.11 	commissioner shall issue a request for qualifications that
13.12 	includes the information as described in subdivision 3.
13.13 	(b) After obtaining and evaluating qualifications from each
13.14 	design-builder, in accordance with the weighted criteria and
13.15 	subcriteria and procedures set forth in the request for
13.16 	qualifications, the board shall select a short list of at least
13.17 	three and no more than five proposals.  The board must receive
13.18 	at least three proposals from design-builders or the
13.19 	commissioner shall either:
13.20 	(1) solicit new proposals;
13.21 	(2) revise the request for qualifications and thereafter
13.22 	solicit new proposals using the revised request for
13.23 	qualifications; or 
13.24 	(3) request selection of a primary designer pursuant to
13.25 	section 16B.33, 16C.08, or 16C.095 and proceed with competitive
13.26 	bidding pursuant to sections 16C.25 to 16C.29.
13.27 	(c) The board shall conduct formal interviews with the
13.28 	short list of proposers, but shall not disclose any proprietary
13.29 	or confidential information contained in one proposal to another
13.30 	proposer.
13.31 	(d) The board shall select the design-builder that scores
13.32 	the highest on the evaluation criteria and subcriteria.  The
13.33 	commissioner shall make the award to the design-builder who
13.34 	scores the highest score pursuant to the weighted criteria and
13.35 	subcriteria as determined by the board, unless the commissioner
13.36 	rejects all proposals or proceeds pursuant to paragraphs (f) and
14.1 	(g).  In the case of the Minnesota State Colleges and
14.2 	Universities, the board shall narrow the selection to the two
14.3 	design-builders that score the highest on the evaluation
14.4 	criteria and subcriteria for recommendation to the respective
14.5 	commissioner, and the commissioner shall make the final
14.6 	selection and shall notify the board of the selection.
14.7 	(e) The commissioner shall conduct fee and contract
14.8 	negotiations with the selected design-builder and shall enter
14.9 	into the contract consistent with subdivision 6.
14.10 	(f) If the selected design-builder declines the appointment
14.11 	or is unable to reach agreement with the commissioner on the
14.12 	terms of the contract, the commissioner may, within 60 days
14.13 	after the first selection, request the board to make another
14.14 	selection.
14.15 	(g) If the board fails to make a selection and forward its
14.16 	recommendation to the commissioner within 60 days of the request
14.17 	for a second selection, the commissioner may appoint a
14.18 	design-builder without the recommendation of the board.
14.19 	(h) If a project for which a design-builder has been
14.20 	selected by the board becomes inactive, lapses, or changes as
14.21 	the result of a project phasing, insufficient appropriations, or
14.22 	other reasons, the commissioner may, if the project is
14.23 	reactivated, retain the same design-builder to complete the
14.24 	project.
14.25 		Subd. 6.Design-build qualifications-based acceptance by
14.26 	commissioner. The contract between the commissioner and the
14.27 	design-builder selected under subdivision 5 shall require the
14.28 	following:
14.29 	(a) The design-builder shall develop design documents of
14.30 	the project for review and approval by the commissioner prior to
14.31 	project bidding.
14.32 	(b) The design-builder shall competitively bid all trade
14.33 	contract work for the project from a list of qualified firms,
14.34 	subject to availability of such qualified firms for the specific
14.35 	work.  The list of qualified firms shall be based upon an open,
14.36 	competitive, and objective prequalification process in which the
15.1 	selection criteria includes, in addition to the proposed price,
15.2 	the firm's experience as a constructor or primary designer,
15.3 	including capacity of key personnel, technical competence,
15.4 	capability to perform, the past performance of the firm and its
15.5 	employees, including its safety record and compliance with state
15.6 	and federal law, availability to and familiarity with the
15.7 	project locale, and other considerations as defined by the
15.8 	design-builder and the commissioner.  The design-builder and the
15.9 	commissioner shall jointly determine the composition of the list
15.10 	of qualified firms.  The criteria shall not impose unnecessary
15.11 	conditions beyond reasonable requirements to ensure maximum
15.12 	participation of qualified contractors.
15.13 	(c) With the approval of the commissioner, the
15.14 	design-builder may name either or both a mechanical and
15.15 	electrical subcontractor or subcontractors as a named member of
15.16 	the design-builder's team, and if either or both a mechanical
15.17 	and electrical subcontractor or subcontractors is so named, the
15.18 	design-builder is not required to competitively bid the
15.19 	mechanical or electrical trade contract work.  A named
15.20 	mechanical or electrical subcontractor member of a
15.21 	design-builder's team shall competitively bid all subcontracted
15.22 	portions of the mechanical or electrical subcontractor's work
15.23 	from a list of qualified firms.  Such qualified firms shall be
15.24 	determined as described in paragraph (b).  The commissioner and
15.25 	the design-builder shall agree to a list of labor, materials,
15.26 	and equipment that shall be competitively bid.
15.27 	(d) With the commissioner's approval or request, team
15.28 	members of the design-builder, including the design-builder, may
15.29 	also submit bids for trade contract work.
15.30 	(e) Either or both the mechanical or electrical
15.31 	subcontractor or subcontractors who are named subcontractor
15.32 	members of the design-builder's team shall enter into guaranteed
15.33 	maximum price contracts with the design-builder.
15.34 	(f) The design-builder and the commissioner shall enter
15.35 	into a guaranteed maximum price contract.
15.36 		Subd. 7.Design-build design and price-based
16.1 	proposals. (a) In a design and price-based selection process
16.2 	the following shall apply:
16.3 	(1) selection must be based on best value, which includes
16.4 	an evaluation of price and design, and may include other
16.5 	criteria including, but not limited to, the proposer's
16.6 	experience as a constructor or primary designer;
16.7 	(2) the commissioner shall establish procedures for
16.8 	determining the appropriate content of each request for
16.9 	qualifications, and the weighted criteria and subcriteria to be
16.10 	used to evaluate the design-builders including, but not limited
16.11 	to, the proposer's experience as a constructor or primary
16.12 	designer, including capacity of key personnel, technical
16.13 	competence, capability to perform and the past performance of
16.14 	the proposer and its employees, its safety record and compliance
16.15 	with state and federal law, quality and past performance, and
16.16 	the procedures for evaluating qualifications in an open,
16.17 	competitive, and objective manner; and 
16.18 	(3) the commissioner shall issue a request for
16.19 	qualifications that includes the information as described in
16.20 	subdivision 3.
16.21 	(b) After obtaining and evaluating qualifications from each
16.22 	design-builder, in accordance with the weighted criteria and
16.23 	subcriteria and procedures set forth in the request for
16.24 	qualifications, the board shall select a short list of three
16.25 	proposers.  The board must receive at least three proposals from
16.26 	design-builders or the commissioner shall either:
16.27 	(1) solicit new proposals;
16.28 	(2) revise the request for qualifications and thereafter
16.29 	solicit new proposals using the revised request for
16.30 	qualifications; or 
16.31 	(3) request selection of a primary designer pursuant to
16.32 	section 16B.33, 16C.08, or 16C.095 and proceed with competitive
16.33 	bidding pursuant to sections 16C.25 to 16C.29.
16.34 	(c) The commissioner shall issue a request for proposals to
16.35 	the selected design-builders.  The submitted proposals shall
16.36 	consist of, at a minimum, the following elements:
17.1 	(1) preliminary plans and specifications and other
17.2 	information in sufficient detail to describe the character,
17.3 	quality, and scope of the project;
17.4 	(2) a design and construction critical path schedule;
17.5 	(3) the price at which the design-builder will complete all
17.6 	design and construction requested in the proposal for the
17.7 	project if selected; and 
17.8 	(4) other materials the board determines are necessary to
17.9 	fix the design, schedule, and cost of the project.
17.10 	(d) Proposals must be sealed and may not be opened until
17.11 	the expiration of the time established for making proposals as
17.12 	set forth in the request for proposals.
17.13 	(e) Proposals must identify the primary designer and the
17.14 	primary construction contracting entity that are members of the
17.15 	design-builders team.
17.16 	(f) The amount and type of design services requested by the
17.17 	board shall not be exceeded by those submitting proposals.
17.18 	Proposals exceeding the amount and type of design services
17.19 	requested by the board may be rejected by the board.  Unless
17.20 	compensated in excess of the minimum stipend for their effort,
17.21 	design-builders must not be required to submit detailed
17.22 	architectural or engineering design or construction documents as
17.23 	part of the proposal.
17.24 	(g) Except as described in paragraph (h), the commissioner
17.25 	shall award to each design-builder that submits a responsive
17.26 	design-build proposal under this subdivision, a stipend in an
17.27 	amount of not less than 0.3 percent of the commissioner's
17.28 	estimated cost of design and construction.  If the request for
17.29 	proposals requires extensive design services beyond preliminary
17.30 	plans and specifications as requested as part of the proposal,
17.31 	the stipend shall be adjusted to an amount commensurate with the
17.32 	amount of design services requested for each proposal.
17.33 	(h) No stipend shall be awarded to the design-builder
17.34 	selected to complete the project.
17.35 	(i) For projects where the design-builder accepts the
17.36 	stipend offered by the board, the commissioner shall be deemed
18.1 	the owner of the design, subject to the rights of the proposer
18.2 	to such design for publication and use in other projects.
18.3 	However, the use of the design in its totality, or near
18.4 	totality, by the commissioner is prohibited.
18.5 	(j) The commissioner may require each design-builder to
18.6 	submit with its proposal a cash deposit, letter of credit in a
18.7 	form acceptable to the commissioner, or bid bond not to exceed
18.8 	five percent of the maximum cost of the design-builder's
18.9 	proposal.  If the proposal is accepted but the design-builder
18.10 	fails, without good cause to execute the design-build contract,
18.11 	the deposit or bond is forfeited in an amount not to exceed the
18.12 	difference between the proposal in question and the next highest
18.13 	proposal.
18.14 		Subd. 8.Design-build design and price-based selection
18.15 	process. (a) The board shall review submissions as described in
18.16 	subdivision 7; conduct formal interviews with all three
18.17 	proposers but not allow the disclosure of any price,
18.18 	proprietary, or confidential information contained in one
18.19 	proposal to another proposer; and select the proposal that
18.20 	scores the highest based on the weighted evaluation criteria and
18.21 	subcriteria, except for projects under the control of Minnesota
18.22 	State Colleges and Universities.  The commissioner shall make
18.23 	the award to the design-builder who scores the highest score
18.24 	pursuant to the weighted criteria and subcriteria as determined
18.25 	by the board, unless the commissioner rejects all proposals or
18.26 	proceeds pursuant to paragraph (c) or (d).  For Minnesota State
18.27 	Colleges and Universities projects, the board shall narrow the
18.28 	selection to the two highest scoring proposers for
18.29 	recommendation to the commissioner, and the commissioner shall
18.30 	review the submissions as described in subdivision 7; conduct
18.31 	formal interviews with both proposers recommended by the board,
18.32 	but not allow the disclosure of any price, proprietary, or
18.33 	confidential information contained in one proposal to another
18.34 	proposer; and select the proposal that scores the highest based
18.35 	on the commissioner's application of the weighted evaluation
18.36 	criteria and subcriteria; and shall notify the board of the
19.1 	selection.
19.2 	(b) After a proposal is accepted, the commissioner is
19.3 	deemed the owner of the design, subject to the rights of the
19.4 	proposer to such design for publication and use in other
19.5 	projects.
19.6 	(c) After a proposal is accepted, the commissioner and the
19.7 	design-builder shall enter into a fixed-price contract.
19.8 	(d) If the design-builder selected for a project declines
19.9 	the appointment or is unable to reach agreement with the
19.10 	commissioner concerning the terms of the contract, the
19.11 	commissioner may, within 60 days after the first selection,
19.12 	request the board to make another selection.
19.13 	(e) If the design-builder selected for a project, prior to
19.14 	executing a design-build contract, replaces either the primary
19.15 	designer or the primary construction contracting entity, the
19.16 	commissioner shall notify the board of the replacement and
19.17 	request the board to either approve the new design-builder or to
19.18 	select another design-builder.
19.19 	(f) If the board fails to make a second selection as
19.20 	described in paragraph (d) or (e) and forward its recommendation
19.21 	to the commissioner within 60 days of the commissioner's request
19.22 	for a second selection, the commissioner may appoint a
19.23 	design-builder to the project without the recommendation of the
19.24 	board.

19.25 	Sec. 8. [16C.34] CONSTRUCTION MANAGER AT RISK.
19.26 		Subdivision 1.Solicitation of qualifications. (a) Every
19.27 	user agency, except the Capitol Area Architectural and Planning
19.28 	Board, shall submit a written request for proposals for a
19.29 	construction manager at risk for its project to the
19.30 	commissioner.  The written request for proposals must include a
19.31 	description of the project, the estimated cost of completing the
19.32 	project, a description of any special requirements or unique
19.33 	features of the proposed project, and other information which
19.34 	will assist the commissioner in carrying out its duties and
19.35 	responsibilities set forth in this section.
19.36 	(b) The commissioner may include in the request for
20.1 	qualifications criteria a requirement that the proposer include
20.2 	the overhead and fee that the construction manager at risk
20.3 	proposes to charge for its services.
20.4 	(c) A request for qualifications shall be prepared for each
20.5 	construction manager at risk contract as provided in this
20.6 	section.  The request for qualifications shall contain, at a
20.7 	minimum, the following elements:
20.8 	(1) the identity of the agency for which the project will
20.9 	be built and that will award the construction manager at risk
20.10 	contract;
20.11 	(2) procedures for submitting qualifications, the criteria
20.12 	and subcriteria for evaluation of qualifications and the
20.13 	relative weight for each criteria and subcriteria, and the
20.14 	procedures for making awards in an open, competitive, and
20.15 	objective manner, and according to the stated criteria and
20.16 	subcriteria, including a reference to the requirements of this
20.17 	section;
20.18 	(3) the terms and conditions for the contract;
20.19 	(4) the qualifications that the construction manager at
20.20 	risk shall be desired to have;
20.21 	(5) a schedule for commencement and completion of the
20.22 	project;
20.23 	(6) any applicable budget limits for the project;
20.24 	(7) requirements for insurance, statutorily required
20.25 	performance and payment bonds;
20.26 	(8) identification and location of any other information in
20.27 	the possession or control of the agency that the user agency
20.28 	determines is material, which may include surveys, soils
20.29 	reports, drawings or models of existing structures,
20.30 	environmental studies, photographs, or references to public
20.31 	records; and 
20.32 	(9) criteria shall not impose unnecessary conditions beyond
20.33 	reasonable requirements to ensure maximum participation of
20.34 	construction managers at risk.  The criteria shall not consider
20.35 	the collective bargaining status of the construction manager at
20.36 	risk.
21.1 	(d) Notice of requests for qualifications must be
21.2 	advertised in the State Register.
21.3 		Subd. 2.Construction manager at risk selection process.
 21.4 	In a construction manager at risk selection process, the
21.5 	following shall apply:
21.6 	(a)(i) Upon receipt of a written request from a user agency
21.7 	for a construction manager at risk for its project, the
21.8 	commissioner shall create a selection committee composed of a
21.9 	minimum of three persons, at least one of whom has construction
21.10 	industry expertise; (ii) the selection committee shall establish
21.11 	procedures for determining the appropriate content of each
21.12 	request for qualifications, the weighted criteria and
21.13 	subcriteria to be used to score the proposals of the
21.14 	construction managers at risk, and shall establish procedures
21.15 	for evaluating qualifications in an open, competitive, and
21.16 	objective manner; and (iii) the commissioner shall issue a
21.17 	request for qualifications that includes the information as
21.18 	described in subdivision 1.
21.19 	(b) In accordance with the criteria and procedures set
21.20 	forth in the request for qualifications, the selection committee
21.21 	shall evaluate the construction manager at risk's experience as
21.22 	a constructor, including, but not limited to, capacity of key
21.23 	personnel, technical competence, capability to perform, the past
21.24 	performance of the construction manager at risk and its
21.25 	employees, its safety record and compliance with state and
21.26 	federal law, availability to and familiarity with the project
21.27 	locale, and other appropriate facts submitted by the
21.28 	construction manager at risk in response to the request for
21.29 	qualifications.  The commissioner must receive at least three
21.30 	proposals from construction managers or the commissioner may
21.31 	either (i) solicit new proposals; (ii) request the selection
21.32 	committee to revise the request for qualifications and
21.33 	thereafter solicit new proposals using the revised request for
21.34 	qualifications; (iii) select another allowed procurement method;
21.35 	or (iv) reject all proposals.
21.36 	(c)(i) The selection committee shall review the proposers'
22.1 	qualifications and create a short list of three to five
22.2 	proposals of construction managers at risk; (ii) the
22.3 	commissioner shall issue a request for proposal requiring fee
22.4 	and expense proposals and other information as desired from the
22.5 	short-listed construction managers at risk; (iii) the selection
22.6 	committee shall conduct formal interviews with the short-listed
22.7 	construction managers at risk but shall not disclose any
22.8 	proprietary or confidential information contained in one
22.9 	proposal to another proposer; (iv) the selection committee shall
22.10 	recommend the construction manager at risk achieving the highest
22.11 	score on the evaluation criteria as described in subdivision 1,
22.12 	paragraph (b).
22.13 	(d) The board shall select the primary designer as
22.14 	described in section 16B.33 or in the case of the commissioner,
22.15 	section 16C.08 or 16C.095.
22.16 		Subd. 3.Construction manager at risk contract. (a) The
22.17 	commissioner shall conduct contract negotiations with the
22.18 	recommended construction manager at risk.
22.19 	(b) If the construction manager at risk selected for the
22.20 	project declines the appointment or is unable to reach agreement
22.21 	with the commissioner concerning the fee or terms of the
22.22 	contract, the commissioner shall, within 60 days after the first
22.23 	selection, request the selection committee to make another
22.24 	recommendation.
22.25 	(c) If the selection committee fails to make a second
22.26 	recommendation and forward it to the commissioner within 60 days
22.27 	of the commissioner's request for a second recommendation, the
22.28 	commissioner may select a construction manager at risk without
22.29 	the recommendation of the selection committee.
22.30 	(d) The primary designer selected by the board shall
22.31 	develop various design documents for review and approval by the
22.32 	commissioner.
22.33 	(e) The construction manager at risk shall competitively
22.34 	bid all trade contract work for the project from a list of
22.35 	qualified firms, subject to availability of such qualified firms
22.36 	for the specific work.  The list of qualified firms shall be
23.1 	based upon an open, competitive, and objective prequalification
23.2 	process in which the selection criteria includes the firm's
23.3 	experience as a constructor, including capacity of key
23.4 	personnel, technical competence, capability to perform, the past
23.5 	performance of the firm and its employees, including its safety
23.6 	record and compliance with state and federal law, availability
23.7 	to and familiarity with the project locale, and other
23.8 	considerations as defined by the construction manager at risk
23.9 	and the commissioner.  The construction manager at risk and the
23.10 	commissioner shall jointly determine the composition of the list
23.11 	of qualified firms.  The criteria shall not impose unnecessary
23.12 	conditions beyond reasonable requirements to ensure maximum
23.13 	participation of qualified contractors.  With the commissioner's
23.14 	approval or request, the construction manager at risk may also
23.15 	submit bids for trade contract work.
23.16 	(f) The construction manager at risk and the commissioner
23.17 	shall enter into a guaranteed maximum price contract for the
23.18 	project.

23.19 	Sec. 9. [16C.35] JOB ORDER CONTRACTING.
23.20 		Subdivision 1.Authority. The commissioner may undertake
23.21 	construction utilizing job order contracting for projects that
23.22 	do not exceed a construction cost of $250,000.
23.23 		Subd. 2.Job order contracting request for
23.24 	qualifications. (a) The commissioner is authorized to issue a
23.25 	request for qualifications that includes the criteria that will
23.26 	be used for the projects, provided that these criteria do not
23.27 	unduly restrict competition, nor impose conditions beyond
23.28 	reasonable requirements to ensure maximum participation of all
23.29 	qualified contractors, and does not relate to the collective
23.30 	bargaining status of the contractor.
23.31 	(b) The request for qualifications must be publicized in a
23.32 	manner designated by the commissioner that ensures open and
23.33 	unrestricted access for any potential responder.  To the extent
23.34 	practical, this must include posting on a state Web site.  To
23.35 	the extent practical, the commissioner must give notice to
23.36 	representatives of targeted group businesses designated under
24.1 	section 16C.16.
24.2 		Subd. 3.Qualified contractors. (a) The commissioner
24.3 	shall review the responses to the request for qualifications and
24.4 	determine responder's ability to enter into the master contract
24.5 	that will be utilized for the projects.  The commissioner shall
24.6 	establish a list of qualified contractors based on the
24.7 	proposers' ability to enter into a master contract as described
24.8 	in the request for qualifications.
24.9 	(b) The commissioner shall enter into master contracts with
24.10 	all qualified contractors.
24.11 	(c) The commissioner shall establish procedures to allow
24.12 	firms to submit qualifications at least annually to allow
24.13 	placement on the list of contractors qualified to enter into a
24.14 	master contract.
24.15 		Subd. 4.Construction services bidding. The commissioner
24.16 	shall request bids for construction services for any project
24.17 	using job order contracting from qualified contractors as
24.18 	follows:
24.19 	(1) for construction projects up to a maximum cost of
24.20 	$50,000, the commissioner shall request a minimum of two bids;
24.21 	(2) for construction projects with a cost greater than
24.22 	$50,000 but less than or equal to $100,000 the commissioner
24.23 	shall request a minimum of three bids;
24.24 	(3) for construction projects with a cost greater than
24.25 	$100,000 but less than or equal to $250,000, the commissioner
24.26 	shall request a minimum of four bids.
24.27 		Subd. 5.Qualified contractor selection. The
24.28 	commissioner shall select the contractor who submits the lowest
24.29 	price bid for the construction services proposed.
24.30 		Subd. 6.Reasonable distribution of bid requests among
24.31 	qualified contractors. The commissioner in requesting bidding
24.32 	for projects using job order contracting as described in this
24.33 	section shall develop a system to ensure a reasonable
24.34 	opportunity for all qualified contractors to bid on construction
24.35 	services on a periodic basis.

24.36 	Sec. 10. EFFECTIVE DATE.
 25.1 	Sections 1 to 9 are effective the day following final
25.2 	enactment.