Bill Text: IA HSB2 | 2019-2020 | 88th General Assembly | Introduced

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Bill Title: A bill for an act relating to alternative project delivery contract methods for government entities.

Spectrum: Committee Bill

Status: (N/A - Dead) 2019-02-06 - Subcommittee Meeting: 02/11/2019 1:00PM House Lounge. [HSB2 Detail]

Download: Iowa-2019-HSB2-Introduced.html

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House Study Bill 2 - Introduced
HOUSE FILE _____
BY (PROPOSED COMMITTEE ON
STATE GOVERNMENT BILL BY
CHAIRPERSON KAUFMANN)
A BILL FOR
An Act relating to alternative project delivery contract
methods for government entities.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. NEW SECTION . 26.17 Alternative project delivery
contracts.
1. As used in this section, unless the context otherwise
requires:
a. “Alternative project delivery contract” means either a
design-build or construction manager-at-risk contract.
b. “Construction manager-at-risk” means a sole
proprietorship, partnership, corporation, or other legal entity
that acts as a consultant to the government entity in the
development and design phases and then assumes the risk for
the construction, rehabilitation, alteration, or repair of a
project at the contracted fixed or guaranteed maximum price,
similar to a general contractor during the construction phase.
c. “Design-build” means a project delivery method subject to
a two or three-phase selection process for which the design and
construction services are furnished under one contract.
d. “Design-build contract” means a contract between
a government entity and a design-builder to furnish the
architecture, engineering, and related services as required for
a given public project, and to furnish the labor, materials,
and other construction services for the same public project.
A design-build contract may be conditioned upon subsequent
refinements in scope and price, and may permit the government
entity to make changes in the scope of the project without
invalidating the design-build contract.
e. “Design-build project” means the design, construction,
alteration, addition, remodeling, or improvement of any
buildings, infrastructure, or facilities under contract with a
government entity.
f. “Design-builder” means any individual, partnership,
joint venture, or corporation subject to a best-value or
qualification-based selection that offers to provide or
provides design services and general contracting services
through a design-build contract in which services within
the scope of the practice of professional architecture or
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engineering are performed respectively by a licensed architect
or licensed engineer and in which services within the scope of
general contracting are performed by a general contractor or
other legal entity that furnishes architecture or engineering
services and construction services either directly or through
subcontracts or joint ventures.
g. “Design criteria consultant” means a person, corporation,
partnership, or other legal entity that meets any of the
following requirements:
(1) Is duly licensed and authorized to practice
architecture within the state of Iowa.
(2) Has a design-build professional certification or equal
training to be a design criteria consultant.
(3) In the case of an engineered project, is duly licensed
as a professional engineer within the state of Iowa within
the discipline of the specific design-build project, and is
employed by or contracted by the government entity to assist
the government entity in the development of project design
criteria, requests for proposals, and any additional services
requested by the government entity to represent its interests
in relation to a project.
h. “Design criteria package” means the performance-oriented
program, scope, and specifications for the design-build project
sufficient to permit a design-builder to prepare a response to
a government entity’s request for proposals for a design-build
project, which may include capacity, durability, standards,
ingress and egress requirements, performance requirements,
description of the site, surveys, soil and environmental
information concerning the site, interior space requirements,
material quality standards, design and construction schedules,
site development requirements, provisions for utilities,
storm water retention and disposal, parking requirements,
applicable governmental code requirements, preliminary designs
for the project or portions thereof, and other criteria for the
intended use of the project.
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i. “Government entity” means the same as “governmental
entity” defined in section 26.2 including, for the purpose of
this section, the state board of regents.
j. “Proposal” means an offer by a design-builder in response
to a request for proposals to enter into a design-build
contract.
k. “Request for proposals” means the document by which
a government entity solicits proposals for a design-build
contract.
l. “Stipend” means a payment to a design-builder who did not
score the highest number of points at the conclusion of phase
three of the best-value selection process to defray the cost of
participating in phase two of the selection process, and for
the use of any intellectual properties obtained.
2. Notwithstanding any other law to the contrary, a
government entity shall be authorized to enter into an
alternative project delivery contract.
3. Construction manager-at-risk contracts.
a. A government entity shall publicly disclose its intent to
use the construction manager-at-risk method and its selection
criteria at least one week prior to publishing the request
for proposals and request for statements of qualifications.
The government entity shall publish its request for proposals
and statements of qualifications. Before or concurrently
with selecting a construction manager-at-risk, the government
entity shall select or designate an engineer or architect
who shall prepare the construction documents for the project
and who shall comply with all state laws, as applicable. If
the engineer or architect is not a full-time employee of the
government entity, the government entity shall select the
engineer or architect on a basis of demonstrated competence and
qualifications. The government entity’s engineer or architect
for a project may not serve, alone or in combination with
another, as the construction manager-at-risk. This paragraph
does not prohibit a government entity’s engineer or architect
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from providing customary construction-phase services under
the engineer’s or architect’s original professional service
agreement in accordance with applicable licensing laws.
b. The government entity may provide or contract for,
independently of the construction manager-at-risk, inspection
services, testing of construction materials, engineering, and
verification of testing services necessary for acceptance of
the project by the government entity.
c. The government entity shall select the construction
manager-at-risk in a two-phase process.
(1) Phase one. The government entity shall prepare a
request for statements of qualifications for the first phase.
The request shall include general information on the project
site, project scope, schedule, selection criteria, the time
and place for receipt of statements of qualifications, and
other information that may assist the government entity in its
selection of a construction manager-at-risk. The selection
criteria may include the construction manager-at-risk’s
experience, past performance, safety record, proposed personnel
and methodology, and other appropriate factors that demonstrate
the capability of the construction manager-at-risk. The
government entity shall not request fees or prices in phase
one.
(2) Phase two. In phase two, the government entity
shall issue a request for proposals. The government entity
may request that no more than five nor fewer than two
construction managers-at-risk, selected solely on the basis
of qualifications, provide additional information, including
the construction manager-at-risk’s project proposal, proposed
fee, and its price for fulfilling the general conditions.
Qualifications shall account for a minimum of forty percent
of the evaluation. Cost shall account for a maximum of sixty
percent of the evaluation.
d. For each phase, the government entity shall receive,
publicly open, and read aloud the names of the construction
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managers submitting proposals or statements of qualifications,
respectively. Within forty-five days after the date of opening
the proposals or statements of qualification submissions, the
government entity or its representative shall evaluate and rank
each proposal or statement of qualifications submission in
relation to the criteria set forth in the applicable request.
e. The government entity or its representative shall
select the construction manager-at-risk that submits the
proposal that offers the best value for the government entity
based on the published selection criteria and on its ranking
evaluation. The government entity or its representative
shall first attempt to negotiate a contract with the selected
construction manager-at-risk. If the government entity or its
representative is unable to negotiate a satisfactory contract
with the selected construction manager-at-risk, the government
entity or its representative shall, formally and in writing,
end negotiations with that construction manager-at-risk and
proceed to negotiate with the next construction manager-at-risk
in the order of the selection ranking until a contract
is reached or negotiations with all ranked construction
managers-at-risk end.
f. The selected construction manager-at-risk shall publicly
advertise and receive bids or proposals from trade contractors
or subcontractors for the performance of all major elements of
the work other than the minor work that may be included in the
general conditions. A construction manager-at-risk submits
its sealed bid or sealed proposal in the same manner as all
other trade contractors or subcontractors. All sealed bids
or proposals shall be submitted at the time and location as
specified in the advertisement for bids or proposals and shall
be publicly opened and the identity of each bidder and their
bid amount shall be read aloud.
g. The construction manager-at-risk and the government
entity or its representative shall review all trade contractor,
subcontractor, or construction manager-at-risk bids or
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proposals in a manner that does not disclose the contents of
the bid or proposal during the selection process to a person
not employed by the construction manager-at-risk, engineer,
architect, or government entity involved with the project. If
the construction manager-at-risk submitted bids or proposals,
the government entity shall determine if the construction
manager-at-risk’s bid or proposal offers the best value for the
government entity. After all proposals have been evaluated and
clarified, the award of all contracts shall be made public.
h. If the construction manager-at-risk reviews, evaluates,
and recommends to the government entity a bid or proposal from
a trade contractor or subcontractor but the government entity
requires another bid or proposal to be accepted, the government
entity shall compensate the construction manager-at-risk by
a change in price, time, or guaranteed maximum cost for any
additional cost and risk that the construction manager-at-risk
may incur because of the government entity’s requirement that
another bid or proposal be accepted.
i. If a selected trade contractor materially defaults in the
performance of its work or fails to execute a contract with a
construction manager-at-risk after being selected in accordance
with this subsection, the construction manager-at-risk may
itself, without advertising, fulfill the contract requirements
or select a replacement trade contractor to fulfill the
contract requirements.
4. In soliciting proposals for a design-build contract,
a government entity shall determine the scope and level of
detail required to permit design-builders to submit proposals
in accordance with the request for proposals given the nature
of the project.
5. In soliciting proposals for a design-build contract, a
design criteria consultant shall be employed or retained by
the government entity to assist in preparation of the design
criteria package and request for proposals and perform any
other additional service necessary to the project. The design
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criteria consultant may also evaluate construction regarding
adherence of the design criteria. The design criteria
consultant may not submit a proposal or furnish design or
construction services for the design-build contract for which
its services were sought.
6. A government entity shall publicly disclose its intent to
solicit proposals for a design-build contract and its project
design criteria package in the same manner that it would post
notice for the competitive bidding process in section 26.3.
7. In soliciting proposals for a design-build contract, a
government entity shall establish in the request for proposals
a time, place, and other specific instructions for the receipt
of proposals. Proposals not submitted in strict accordance
with the instructions may be subject to rejection. Minor
irregularities may be waived by the government entity.
8. A request for proposals shall be prepared for each
design-build contract and shall contain, at minimum, the
following elements:
a. The procedures to be followed for submitting proposals,
the criteria for evaluating proposals and their relative
weight, and the procedure for making awards.
b. The proposed terms and conditions for the design-build
contract, if available.
c. The design criteria package.
d. A description of the drawings, specifications, or other
information to be submitted with the proposal, with guidance
as to the form and level of completeness of the drawings,
specifications, or other information that will be acceptable.
e. A schedule for planned commencement and completion of the
design-build contract, if available.
f. Budget limits for the design-build contract, if any.
g. Requirements including any available ratings for
performance bonds, payment bonds, and insurance, if any.
h. The amount of the stipend, if any, that will be
available.
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i. Any other information that the government entity in
its discretion chooses to request including but not limited
to surveys, soil reports, drawings of existing structures,
environmental studies, photographs, references to public
records, or affirmative action and minority business enterprise
requirements consistent with state and federal law.
9. A government entity seeking to enter a design-build
contract shall solicit design-build proposals either by
using a three-phase, best-value process or a two-phase,
qualifications-based process.
a. A three-phase, best-value selection process shall be
conducted as follows:
(1) Phase one. Request for statements of qualifications of
design-builders.
(a) The government entity shall review submitted statements
of the qualifications and assign points to each in accordance
with this section and as set out in the instructions of the
request for qualifications.
(b) All design-builders shall submit a statement of
qualifications that shall include but not be limited to:
(i) Demonstrated ability to perform projects comparable in
design, scope, and complexity.
(ii) References of owners for whom design-build projects,
construction projects, or design projects have been performed.
(iii) Qualifications of personnel who will manage the
design and construction aspects of the project.
(iv) The names and qualifications of the primary design
consultants and the primary trade contractors with whom the
design-builder proposes to subcontract or joint venture. The
design-builder may not replace an identified contractor,
subcontractor, design consultant, or subconsultant without the
written approval of the government entity.
(c) The government entity shall evaluate the qualifications
of all the design-builders who submitted statements of
qualifications in accordance with the instructions of the
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request for qualifications. Qualified design-builders
selected by the government entity may proceed to phase two
of the selection process. The evaluation shall narrow the
number of qualified design-builders submitting statements of
qualifications to not fewer than two nor more than five. Under
no circumstances shall price or fees be a part of the request
for statements of qualifications criteria. Design-builders may
be interviewed in either phase one or phase two of the process.
Points assigned in phase one of the evaluation process shall
not carry forward to phase two or phase three of the process.
All qualified design-builders shall be ranked on points given
in phases two and three only.
(d) Once no fewer than two and no more than five qualified
design-builders have been selected, the government entity shall
issue its request for proposals and provide the design-builders
a specified amount of time in which to concurrently assemble
phase two and phase three proposals.
(2) Phase two. Solicitation of technical proposals,
including conceptual design for the project.
(a) A design-builder shall submit its design for the project
to the level of detail required for the proposal along with
such other information the government entity requests, which
may include a schedule, qualifications, and experience.
(b) The ability of the design-builder to meet the schedule
for completing a project as specified by the government entity
may be considered as an element of evaluation in phase two.
(c) Under no circumstances shall the design proposal
contain any reference to the cost of the proposal.
(d) The submitted designs shall be evaluated and assigned
points in accordance with the requirements of the request for
proposals. Phase two shall account for not less than forty
percent and no more than sixty percent of the total point score
as specified in the request for proposals.
(3) Phase three. Proposal of construction costs.
(a) The government entity shall invite the selected
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design-builders to participate in phase three. The
design-builders shall provide a fixed cost of design and
construction. The proposal shall be accompanied by bid
security and any other items, such as statements of minority
participation, as required by the request for proposals.
(b) Cost proposals shall be submitted in accordance with
the instructions in the request for proposals. The government
entity shall reject any proposal that is not submitted within
the required time frame. Phase three shall account for not
less than forty percent and no more than sixty percent of the
total point score as specified in the request for proposals.
(c) Proposals for phase two and phase three shall be
submitted concurrently at the time and place specified in the
request for proposals, but in separate envelopes or other means
of submission. The phase three cost proposals shall be opened
and read aloud only after phase two design proposals have been
evaluated and assigned points, ranked in order, and posted.
Cost proposals shall be opened and read aloud at the time and
place specified in the request for proposals. At the same time
and place, the evaluation team shall make public its scoring
of phase two. Cost proposals shall be evaluated in accordance
with the requirements of the request for proposals.
(d) If the government entity determines that it is not in
the best interest of the government entity to proceed with the
project pursuant to the proposal offered by the design-builder
with the highest total number of points, the government entity
shall reject all proposals. In this event, all design-builders
with lower point totals in phases two and three shall receive
a stipend and the responsive design-builder with the highest
point total shall receive an amount equal to two times the
stipend. If the government entity decides to award the
project, the responsive design-builder with the highest point
total shall be awarded the contract.
(e) As an inducement to qualified design-builders, the
government entity shall pay a stipend, the amount of which
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shall be established in the request for proposals, to each
design-builder who submitted a proposal but was not accepted.
Such stipend shall be no less than one-half of one percent
of the total project budget. Upon payment of the stipend to
such a design-builder, the government entity shall acquire
a nonexclusive right to use the design submitted by the
design-builder, and the design-builder shall have no further
liability for the use of the design by the government entity in
any manner. If the design-builder desires to retain all rights
and interests in the design proposed, the design-builder shall
forfeit the stipend.
b. A two-phase, qualifications-based selection process shall
be conducted as follows:
(1) Phase one. Request for statements of qualifications of
design-builders.
(a) The government entity must prepare a request for
statements of qualifications. The request shall include
general information on the project site, project scope,
schedule, selection criteria, the time and place for receipt
of statements of qualifications, and other information
that may assist the government entity in its selection of a
design-builder.
(b) The government entity shall state the selection
criteria in the request for statements of qualifications. The
selection criteria may include the design-builder’s experience,
past performance, safety record, proposed personnel and
methodology, and other appropriate factors that demonstrate the
capability of the design-builder.
(c) Selection criteria will be ranked and assigned points
for each category. Point assignments shall be included as a
part of the request for statements of qualifications.
(d) The government entity shall not request fees or prices
in phase one. Any submissions with disclosed fees or prices
will be disqualified and removed from consideration.
(2) Phase two. Negotiations.
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(a) Negotiations shall be conducted, beginning with the
design-builder ranked first. If a contract satisfactory
and advantageous to the government entity can be negotiated
at a price considered fair and reasonable and pursuant to
contractual terms and conditions acceptable to the government
entity, the award shall be made to that design-builder.
(b) In the event that a contract cannot be negotiated
with the design-builder ranked first, negotiations with that
design-builder shall be formally terminated. The government
entity shall conduct negotiations with the next-highest-ranked
design-builder and continue this process until a contract can
be negotiated that meets the terms of subparagraph division (a)
of this subparagraph.
Sec. 2. Section 262.34, subsection 1, Code 2019, is amended
to read as follows:
1. a. When the estimated cost of construction, repairs,
or improvement of buildings or grounds under charge of the
state board of regents, including construction, renovation, or
repairs by a private party of a property to be lease-purchased
by the board , exceeds one hundred thousand dollars, the board
shall advertise for bids for the contemplated improvement or
construction and shall let the work to the lowest responsible
bidder. However, if in the judgment of the board bids received
are not acceptable, the board may reject all bids and proceed
with the construction, repair, or improvement by a method as
the board may determine. All plans and specifications for
repairs or construction, together with bids on the plans or
specifications, shall be filed by the board and be open for
public inspection. All bids submitted under this section shall
be accompanied by a deposit of money, a certified check, or a
credit union certified share draft in an amount as the board
may prescribe.
b. The state board of regents may proceed with a
construction, repair, or improvement by using an alternative
project delivery contract in accordance with the provisions of
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section 26.17.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
Currently, most government entities must use a competitive
bidding process for a construction project when that project
is estimated to cost at least as much as a threshold defined
in Code section 26.3. This bill allows a government entity to
use an alternative project delivery contract in circumstances
that normally require the government entity to use competitive
bidding procedures. The bill defines a government entity to
include the state board of regents.
The bill creates two types of alternative project delivery
contracts, each with specified requirements. The first
alternative is the construction manager-at-risk contract. If a
government entity opts to use a construction manager-at-risk
contract, the government entity shall select an engineer
or architect to prepare the construction documents for
the project. That engineer or architect cannot serve as
the construction manager-at-risk. The government entity
shall use a two-phase process in selecting the construction
manager-at-risk. The first phase shall include a request for
qualifications and the government entity’s selection criteria.
The government entity may select at least two but no more
than five of the construction managers-at-risk who submitted
qualifications to participate in the second phase, based solely
on the qualifications of those construction managers-at-risk.
In phase two, the construction managers-at-risk that the
government entity selects will provide additional information,
including the project proposal, costs, and fees. The
government entity shall rank the construction managers-at-risk
in a manner in which qualifications account for at least 40
percent of the evaluation and cost accounts for no more than 60
percent of the evaluation. The government entity shall select
the construction manager-at-risk that offers the best value
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based on the evaluation criteria. If the two parties do not
reach an agreement, the government entity shall proceed with
the next highest-ranked construction manager-at-risk and follow
this process until the government entity reaches a contract
with a construction manager-at-risk. The selected construction
manager-at-risk shall advertise for and receive sealed bids
for proposals from trade contractors or subcontractors and
publicly review those bids with the government entity in a
manner that does not disclose the contents of the bid or
proposal during the selection process to a person not employed
by the construction manager-at-risk, engineer, architect, or
government entity involved with the project. The construction
manager-at-risk will select a bid in consultation with the
government entity.
The second type of alternative project delivery method is
the design-build contract, which can select design-builders in
either a three-phase or two-phase process. In the three-phase
process, the government entity shall first request statements
of qualifications from design-builders. The government
entity shall select at least two but no more than five
qualified design-builders to move on to phases two and three.
In the second phase, the government entity shall solicit
technical proposals and conceptual designs from the remaining
design-builders. The government entity shall pay a stipend
to any design-builder that participates in phase two but
whose contract the entity does not select. The third phase
involves the design-builders submitting construction costs.
The government entity shall award points for each proposal. If
the government entity chooses to award a contract, it shall
award the contract to the design-builder with the highest point
total.
If the government entity uses the two-phase process, the
government entity will request qualifications and include
its selection criteria. The government entity will rank the
qualifications of a design-builder. In the second phase, the
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government entity shall negotiate with the highest-ranked
design-builder. If the two parties cannot agree to a contract
with terms and conditions acceptable to the government
entity, those negotiations shall be formally terminated
and the government entity shall negotiate with the next
highest-ranked design-builder. That process shall continue
until the government entity can negotiate a contract with a
design-builder with terms and conditions acceptable to the
government entity.
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