Bill Text: OR SB254 | 2013 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to requirements for alternative contracting methods; and declaring an emergency.

Spectrum: Committee Bill

Status: (Passed) 2013-07-03 - Effective date, June 26, 2013. [SB254 Detail]

Download: Oregon-2013-SB254-Introduced.html


     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 2270

                         Senate Bill 254

Printed pursuant to Senate Interim Rule 213.28 by order of the
  President of the Senate in conformance with presession filing
  rules, indicating neither advocacy nor opposition on the part
  of the President (at the request of Senate Interim Committee on
  Business, Transportation and Economic Development)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Specifies conditions under which contracting agency may use
alternative contracting method to award public improvement
contract for construction manager/general contractor services.
Requires Attorney General to adopt model rules to specify
procedures for procuring construction manager/general contractor
services.
  Provides that contracting agency must procure construction
manager/general contractor services in accordance with model
rules.
  Becomes operative July 1, 2014.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to requirements for alternative contracting methods;
  creating new provisions; amending ORS 279A.065, 279A.070,
  279C.307, 279C.330, 279C.335 and 279C.380; and declaring an
  emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2013 Act is added to and made
a part of ORS chapter 279C. + }
  SECTION 2.  { + (1) As used in this section:
  (a) 'Construction manager/general contractor' means a person
that provides construction manager/general contractor services to
a contracting agency under a public improvement contract and for
a guaranteed maximum price.
  (b) 'Construction manager/general contractor services ' means a
project management process for a public improvement that,
depending on the specific terms of the public improvement
contract, may include:
  (A) Assisting with a contracting agency's design for a public
improvement;
  (B) Reviewing and analyzing a design for a public improvement
in order to:
  (i) Suggest changes in the design that minimize potential
errors, delays, unexpected costs and other problems during
construction;

  (ii) Recommend means by which the contracting agency may
achieve the functions of the public improvement or a component of
the public improvement safely, reliably, efficiently and at the
lowest overall cost;
  (iii) Improve the value and quality of the public improvement;
and
  (iv) Reduce the time necessary to complete the public
improvement;
  (C) Devising a schedule for constructing the public
improvement;
  (D) Estimating construction, materials, labor and other costs
for the public improvement;
  (E) Establishing a guaranteed maximum price;
  (F) Constructing portions of the public improvement and
subcontracting portions to other contractors;
  (G) Coordinating and overseeing the construction process;
  (H) Functioning as a member of a project team that includes the
contracting agency, the architect or engineer that designed the
public improvement under a separate public contract, and other
contractors and consultants; and
  (I) Performing other related services in accordance with the
terms of the public improvement contract.
  (c) 'Guaranteed maximum price' means the total price at which a
construction manager/general contractor agrees to provide
construction manager/general contractor services to a contracting
agency in accordance with the terms and conditions and scope of
work for a specific public improvement contract and within which
are:
  (A) All costs the contracting agency agrees to reimburse and
all fees the contracting agency agrees to pay for completing the
public improvement; and
  (B) Any contingent costs, fees or other charges specifically
identified in the public improvement contract.
  (2) A contracting agency that intends to procure construction
services that are substantially equivalent to construction
manager/general contractor services shall procure the
construction services in accordance with model rules the Attorney
General adopts under ORS 279A.065 (3). A procurement for
construction services is substantially equivalent to a
procurement for construction manager/general contractor services
if the specifications for the procurement include construction
services identified as construction manager/general contractor
services in subsection (1)(b) of this section, even if the
specifications also include construction services that a
contracting agency may procure using a different procurement
method.
  (3) A contracting agency shall, in documents the contracting
agency uses to procure construction manager/general contractor
services:
  (a) Describe the criteria the contracting agency will use to
evaluate proposals for the construction manager/general
contractor services the contracting agency seeks, how the
contracting agency will assess a proposal's compliance with the
criteria and what weight the contracting agency will give each
criterion in the evaluation;
  (b) Describe the criteria the contracting agency will use to
evaluate interviews, if the contracting agency uses interviews in
the procurement;
  (c) Describe any other criteria the contracting agency may
consider in selecting a construction manager/general contractor;
  (d) Describe how the contracting agency will combine scoring
from the interviews, from evaluating the proposals and from other
criteria specified in accordance with paragraph (c) of this
subsection to arrive at a proposer's final score and ranking;
  (e) State that any savings the construction manager/general
contractor realizes in performing the public improvement contract
will accrue to the contracting agency, unless the public
improvement contract provides otherwise;
  (f) Specify terms and conditions that govern how the guaranteed
maximum price will be determined and whether the guaranteed
maximum price includes or is based on unit pricing or allows for
work that is constructed in phases;
  (g) State that the contracting agency will not pay any amount
that exceeds the guaranteed maximum price, unless the amount
results from material changes to the scope of work set forth in
the public improvement contract;
  (h) State that the contracting agency will conduct the
procurement in accordance with model rules the Attorney General
adopts under ORS 279A.065 (3); and
  (i) Specify deadlines and time periods for the procurement that
allow prospective contractors a reasonable opportunity to submit
proposals, including but not limited to:
  (A) The date and time by which the contracting agency must
receive proposals;
  (B) The dates on which or the time periods during which the
contracting agency will conduct interviews, if the contracting
agency will conduct interviews for the procurement;
  (C) The date by which the contracting agency will indicate an
intent to award the public improvement contract; and
  (D) The time period during which the contracting agency will
meet with proposers that the contracting agency did not select
for the public improvement contract, if a proposer requests a
meeting to discuss the procurement.
  (4) By the earlier of the date on which a contracting agency
and a construction manager/general contractor agree on a
guaranteed maximum price or the date on which the construction
manager/general contractor begins to solicit offers for
construction services from subcontractors, the public improvement
contract that the contracting agency negotiates with the
construction manager/general contractor must:
  (a) Describe the methods the construction manager/general
contractor will use to qualify and, in a competitive process,
select subcontractors to perform construction services in
connection with the public improvement contract. The methods
should provide prospective subcontractors with a reasonable
opportunity to participate in the construction manager/general
contractor's selection process.
  (b) Identify the portions of the construction work under the
public improvement contract for which the construction
manager/general contractor may waive the competitive process
described in paragraph (a) of this subsection and describe:
  (A) How the construction manager/general contractor may
determine the portions of the construction work that will not be
subject to the process described in paragraph (a) of this
subsection; and
  (B) The process the construction manager/general contractor
will use to qualify and select prospective subcontractors for the
portions of the construction work that are not subject to the
process described in paragraph (a) of this subsection.
  (c) Identify the conditions under which the construction
manager/general contractor or an affiliate or subsidiary of the
construction manager/general contractor may perform or compete
with other prospective subcontractors to perform construction
work under the public improvement contract and describe the
methods the construction manager/general contractor will use to
qualify and select an affiliate or subsidiary to perform the
construction work.
  (d) Describe how the construction manager/general contractor
will announce which prospective subcontractors the construction
manager/general contractor has selected to perform construction
services in connection with the public improvement contract.

  (e) Describe the conditions under which the construction
manager/general contractor will discuss the selection process for
the subcontract with a prospective subcontractor that the
construction manager/general contractor did not select for a
subcontract. + }
  SECTION 3. ORS 279A.065 is amended to read:
  279A.065. (1) The Attorney General shall prepare and maintain
model rules   { - of procedure - }  { +  that specify procedures
for public contracting under the Public Contracting Code and that
are + } appropriate for   { - use by - }  all contracting
agencies   { - governing public contracting under the Public
Contracting Code and - }  { +  to use.  The Attorney General
 + }may devise and publish forms for use
  { - therewith - }  { +  with the model rules + }. The Attorney
General shall adopt the model rules in   { - the manner provided
by - }  { +  accordance with + } ORS chapter 183. Before adopting
or amending a model rule, the Attorney General shall consult with
the Director of the Oregon Department of Administrative Services,
the Director of Transportation, representatives of county
governments, representatives of city governments, representatives
of school boards and other knowledgeable persons.
  (2) The Attorney General shall adopt model rules
 { - appropriate for use by all contracting agencies to govern
the - }  { +  that specify + } procedures   { - for entering - }
 { +  for all contracting agencies to use to enter + } into
energy savings performance contracts. Before adopting or amending
a rule under this subsection, the Attorney General shall consult
with the Oregon Department of Administrative Services, the State
Department of Energy, the Oregon University System, local
contracting agencies and other knowledgeable persons. The
Attorney General may develop standard contract forms for use with
energy savings performance contracts.
   { +  (3)(a) The Attorney General shall adopt model rules that
specify procedures for all contracting agencies to use to procure
construction manager/general contractor services, as defined in
section 2 of this 2013 Act. Before adopting or amending a rule
under this subsection, the Attorney General shall consult with
representatives of contracting agencies that procure construction
manager/general contractor services, construction contractors and
subcontractors, architects, engineers and project managers that
participate in providing construction manager/general contractor
services and other knowledgeable persons.
  (b) Notwithstanding subsection (6) of this section, a
contracting agency may not adopt the contracting agency's own
rules for procuring construction manager/general contractor
services. + }
    { - (3) - }  { +  (4) + } After each legislative session, the
Attorney General shall review all laws   { - passed by - }  the
Legislative Assembly  { +  passed + } that affect public
contracting to determine if the { +  Attorney General should
amend or repeal a + } model   { - rules - }  { +  rule + }
prepared under this section   { - should be modified by the
adoption of - }  { +  or adopt + } a new rule   { - or by the
amendment or repeal of an existing rule - } . If the Attorney
General determines that a modification of the model rules is
necessary, the Attorney General shall prepare the modification
within such time as to allow the modification to take effect no
later than 120 days after the effective date of the legislation
that caused the { +  Attorney General to modify the + }
rule { + . + }
  { - to be modified. However, - }  The Attorney General may
prepare a modification to take effect 121 or more days after the
effective date of the legislation if the Attorney General
 { - provides notice designating the time period within which the
modification will take effect to - }  { + , in a notice to
 + }the state agencies and persons listed in subsection (1) of
this section { + , specifies when the modification will take
effect + }.
    { - (4) - }  { +  (5) + } A contracting agency that has not
adopted   { - its - }  { +  the contracting agency's + } own
rules of procedure in accordance with subsection   { - (5) - }
 { +  (6) + } of this section is subject to the model rules
  { - adopted by - }  the Attorney General { +  adopts + } under
this section, including all modifications to the model rules that
the Attorney General may adopt.
    { - (5)(a) - }  { +  (6)(a) + } A contracting agency may
adopt   { - its - }  { +  the contracting agency's + } own rules
of procedure for public contracts that:
  (A) Specifically state that the model rules   { - adopted
by - }  the Attorney General { +  adopts + } under this section
do not apply to the contracting agency; and
  (B) Prescribe the rules of procedure that the contracting
agency will use for public contracts, which may include portions
of the model rules   { - adopted by - }  the Attorney
General { +  adopts + }.
  (b) A contracting agency that adopts rules under this
  { - section - }  { +  subsection + } shall review the rules
each time the Attorney General modifies the model rules under
this section to determine whether the contracting agency should
modify   { - its - }  { +  the contracting agency's + } rules to
ensure compliance with statutory changes.
  SECTION 4. ORS 279A.070 is amended to read:
  279A.070. In addition to rules adopted under ORS 279A.065
  { - (5) - }  { +  (6) + }, a contracting agency may, in
 { - the exercise of - }  { +  exercising + } authority granted
under ORS 279A.050, adopt rules necessary to carry out the
provisions of the Public Contracting Code, including but not
limited to rules for   { - the procurement, management, disposal
and control of - }  { +  procuring, managing, disposing of and
controlling + } goods, services, personal services and public
improvements under the Public Contracting Code. Each contracting
agency authorized to enter into personal services contracts shall
create procedures   { - for the screening and selection of - }
 { +  to screen and select + } persons to perform personal
services.
  SECTION 5. ORS 279C.307 is amended to read:
  279C.307. (1) Except as provided in subsection (2) of this
section, a contracting agency that procures personal services for
the purpose of administering, managing, monitoring, inspecting,
evaluating compliance with or otherwise overseeing a public
contract that is subject to this chapter may not:
  (a) Procure the personal services from a contractor or an
affiliate of a contractor who is a party to the public contract
that is subject to administration, management, monitoring,
inspection, evaluation or oversight by means of the personal
services; or
  (b) Procure the personal services through the public contract
that is subject to administration, management, monitoring,
inspection, evaluation or oversight by means of the personal
services.
  (2) Subsection (1) of this section does not apply to a
procurement   { - that qualifies as a construction
manager/general contractor procurement or a design-build
procurement, both as defined in OAR 125-249-0610 or
137-049-0610 - }  { +  for construction manager/general
contractor services, as defined in section 2 of this 2013 Act, or
to a design-build procurement, as defined in rules the Attorney
General or a contracting agency adopts under ORS 279A.065 + }.
  (3) As used in this section, 'affiliate' means a person that,
directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the
contractor described in subsection (1)(a) of this section.
  SECTION 6. ORS 279C.330 is amended to read:
  279C.330.  { + (1) + } As used in ORS   { - 279C.335, - }
279C.345 and 279C.350, 'findings' means the justification for a
contracting agency conclusion that includes, but is not limited
to, information regarding:
    { - (1) - }  { +  (a) + } Operational, budget and financial
data;
    { - (2) - }  { +  (b) + } Public benefits;
    { - (3) - }  { +  (c) + } Value engineering;
    { - (4) - }  { +  (d) + } Specialized expertise required;
    { - (5) - }  { +  (e) + } Public safety;
    { - (6) - }  { +  (f) + } Market conditions;
    { - (7) - }  { +  (g) + } Technical complexity; and
    { - (8) - }  { +  (h) + } Funding sources.
   { +  (2) As used in ORS 279C.335, 'findings' means the
justification for a conclusion that a contracting agency or state
agency, in seeking an exemption from the competitive bidding
requirement of ORS 279C.335 (1), reaches based on the
considerations set forth in ORS 279C.335 (2). + }
  SECTION 7. ORS 279C.335 is amended to read:
  279C.335.   { - (1) All public improvement contracts shall be
based upon competitive bids except: - }
   { +  (1) A contracting agency shall use a competitive bidding
process as the basis for awarding a public improvement contract,
except for: + }
  (a)   { - Contracts made - }  { +  A contract + } with { +
a + } qualified nonprofit
  { - agencies providing - }  { +  agency that provides + }
employment opportunities for individuals with disabilities under
ORS 279.835 to 279.855.
  (b) A public improvement contract { +  that is + } exempt under
subsection (2) of this section.
  (c) A public improvement contract with a value of less than
$5,000.
  (d) A contract   { - not to - }  { +  with a contract price
that does not + } exceed $100,000 made under procedures for
competitive quotes in ORS 279C.412 and 279C.414.
  (e)   { - Contracts for - }  { +  A contract to + } repair,
 { - maintenance, improvement or protection of - }  { +
maintain, improve or protect + } property   { - obtained by - }
the Department of Veterans' Affairs { +  obtains + } under ORS
407.135 and 407.145 (1).
  (f)  { + An + } energy savings performance   { - contracts
entered - }  { +  contract that a contracting agency enters + }
into in accordance with rules of procedure adopted under ORS
279A.065.
  (2) Subject to subsection (4)(b) { +  and (c) + } of this
section, the Director of the Oregon Department of Administrative
Services, a local contract review board or, for contracts
described in ORS 279A.050 (3)(b), the Director of Transportation
may exempt a public improvement contract or a class of public
improvement contracts from the competitive bidding
 { - requirements - }  { +  requirement + } of subsection (1) of
this section   { - upon approval of - }  { +  after the director
or the local contract review board approves + } the following
findings   { - submitted by - }  { +  that + } the contracting
agency { +  submits + } or, if a state agency is not the
contracting agency, { +  that + } the state agency  { + that
is + } seeking the exemption { +  submits + }:
  (a)   { - It is unlikely that - }  The exemption   { - will - }
 { +  is unlikely to + } encourage favoritism in   { - the - }
awarding   { - of - }  public improvement contracts or
substantially diminish competition for public improvement
contracts.
  (b) { + (A) + }   { - The - }  Awarding { +  a + }   { - of - }
public improvement   { - contracts - }  { +  contract + } under
the exemption will likely result in substantial cost savings { +
and other substantial benefits + } to the contracting agency { +
or the state agency that seeks the exemption + }  { - , to the
state agency based upon the justification and information
described in ORS 279C.330 - }  or, if the   { - contracts are - }
 { +  contract is + } for { +  a + } public
  { - improvements - }  { +  improvement + } described in ORS
279A.050 (3)(b), to the contracting agency or the public. In
 { - making the - }  { +  approving a + } finding { +  under this
paragraph + }, the Director of the Oregon Department of
Administrative Services, the Director of Transportation or the
local contract review board   { - may - }  { +  shall + }
consider the type, cost and amount of the contract  { - , - }
 { + and, to the extent appropriate for the particular public
improvement contract, whether exempting the public improvement
contract or the class of public improvement contracts from the
competitive bidding requirement of subsection (1) of this section
will:
  (i) Change + } the number of persons available to bid { + ; + }
 { - and such other factors as may be deemed appropriate. - }
   { +  (ii) Affect the construction budget and the projected
operating costs for the completed public improvement;
  (iii) Provide public benefits;
  (iv) Enable or allow a contractor to use value engineering
techniques to decrease the cost of the public improvement;
  (v) Require specialized expertise for which the contracting
agency, the director or the local contract review board must
determine availability and cost;
  (vi) Increase public safety;
  (vii) Reduce risk to the contracting agency, the state agency
or the public;
  (viii) Aid in controlling the impact that market conditions may
have on the cost of and time necessary to complete the public
improvement; or
  (ix) Affect sources of funding for the public improvement.
  (B) In evaluating whether using an alternative contracting
method to award a public improvement contract will better enable
the contracting agency or state agency that seeks an exemption
from the competitive bidding requirement of subsection (1) of
this section to complete the public improvement in accordance
with the requirements of this subsection, the Director of the
Oregon Department of Administrative Services, the Director of
Transportation or the local contract review board shall consider
whether:
  (i) The size and technical complexity of the public improvement
merit using an alternative contracting method;
  (ii) The public improvement involves new construction or
renovates or remodels an existing structure;
  (iii) The public improvement will be occupied or unoccupied
during construction; and
  (iv) The public improvement will require a single phase of
construction work or multiple phases of construction work to
address specific project conditions.
  (C) In evaluating whether a contracting agency or a state
agency that seeks an exemption from the competitive bidding
requirement of subsection (1) of this section will adequately
implement applicable policies set forth in ORS 279A.015 by using
an alternative contracting method, the Director of the Oregon
Department of Administrative Services, the Director of
Transportation or the local contract review board shall consider
whether the contracting agency or state agency has, or has
retained under contract, and will use contracting agency or state
agency personnel, consultants and legal counsel that have
necessary expertise and substantial experience in alternative
contracting methods to:

  (i) Assist in developing the alternative contracting method
that the contracting agency or state agency will use to award the
public improvement contract; and
  (ii) Help negotiate, administer and enforce the terms of the
public improvement contract. + }
  (c) As an alternative to the finding described in paragraph (b)
of this subsection,   { - when - }  { +  if + } a contracting
agency or state agency seeks an exemption that would allow
the { +  contracting agency or state agency to + } use   { - of
an alternate - }  { +  an alternative + } contracting method that
the { +  contracting agency or state + } agency has not
previously used, the  { + contracting agency or state + } agency
may make a finding that identifies the project as a pilot project
for which the { +  contracting agency or state + } agency intends
to determine whether   { - the use of the alternate - }  { +
using the alternative + } contracting method actually results in
substantial cost savings to the contracting agency, to the state
agency or, if the contract is for a public improvement described
in ORS 279A.050 (3)(b), to the contracting agency or the public.
The { +  contracting agency or state + } agency shall include an
analysis and conclusion regarding actual cost savings, if any, in
the evaluation required under ORS 279C.355.
  (3) In making findings to support an exemption for a class of
public improvement contracts, the contracting agency or state
agency shall clearly identify the class using the class's
defining characteristics.   { - Those - }  { +  The + }
characteristics   { - shall - }  { +  must + } include
  { - some - }  { +  a + } combination of project descriptions or
locations, time periods, contract values, methods of procurement
or other factors that distinguish the limited and related class
of public improvement contracts from the agency's overall
construction program. The agency may not identify a class solely
by funding source, such as a particular bond fund, or by the
method of procurement, but shall identify the class using
characteristics that reasonably relate to the exemption criteria
set forth in subsection (2) of this section.
  (4) In granting exemptions under subsection (2) of this
section, the Director of the Oregon Department of Administrative
Services, the Director of Transportation or the local contract
review board shall:
  (a)   { - When - }  { +  If + } appropriate, direct the use of
 { - alternate - }  { +  alternative + } contracting methods that
take account of market realities and modern practices and are
consistent with the public policy of encouraging competition.
  (b) Require and approve or disapprove written findings by the
contracting agency or state agency that support   { - the - }
awarding
  { - of - }  a particular public improvement contract or a class
of public improvement contracts, without the competitive bidding
requirement of subsection (1) of this section. The findings must
show that the exemption of a contract or class of contracts
complies with the requirements of subsection (2) of this section.
   { +  (c) Require a contracting agency or state agency that
procures construction manager/general contractor services, as
defined in section 2 of this 2013 Act, to conduct the procurement
in accordance with model rules the Attorney General adopts under
ORS 279A.065 (3). + }
  (5)(a)  { + A contracting agency or state agency shall hold a
public hearing  + }before   { - final adoption of - }  { +
finally adopting  + }the findings required by subsection (2) of
this section   { - exempting - }  { +  and before the Director of
the Oregon Department of Administrative Services, the Director of
Transportation or the local contract review board grants an
exemption from the competitive bidding requirement for + } a
public improvement contract or a class of public improvement
contracts { + . + }   { - from the requirement of competitive
bidding, a contracting agency or state agency shall hold a public
hearing. - }
  (b) Notification of the public hearing   { - shall - }  { +
must + } be published in at least one trade newspaper of general
statewide circulation a minimum of 14 days before the hearing.
  (c) The notice   { - shall - }  { +  must + } state that the
public hearing is for the purpose of taking comments on the draft
findings for an exemption from the competitive bidding
requirement. At the time of the notice, copies of the draft
findings   { - shall - }  { +  must + } be made available to the
public. At the option of the contracting agency or state agency,
the notice may describe the process by which the findings are
finally adopted and may indicate the opportunity for
  { - any - }  further public comment.
  (d) At the public hearing, the contracting agency or state
agency shall offer an opportunity for any interested party to
appear and   { - present - }  comment.
  (e) If a contracting agency or state agency   { - is required
to - }  { +  must + } act promptly   { - due to - }  { +  because
of + } circumstances beyond the agency's control that do not
constitute an emergency, notification of the public hearing may
be published simultaneously with the agency's solicitation of
contractors for the alternative public contracting method, as
long as responses to the solicitation are due at least five days
after the   { - meeting - }  { +  hearing + } and approval of the
findings.
  (6) The purpose of an exemption is to exempt one or more public
improvement contracts from competitive bidding requirements. The
representations in and the accuracy of the findings, including
any general description of the resulting public improvement
contract, are the bases for approving the findings and granting
the   { - exception - }  { +  exemption + }. The findings may
describe anticipated features of the resulting public improvement
contract, but the final parameters of the contract are those
characteristics or specifics announced in the solicitation
document.
  (7) A public improvement contract awarded under the competitive
bidding requirement of subsection (1) of this section may be
amended only in accordance with   { - rules adopted - }  { +
model rules the Attorney General adopts + } under ORS 279A.065.
  (8)  { + A  + }public improvement   { - contracts - }  { +
contract that is + } excepted from  { + the + } competitive
 { - bid requirements - }  { +  bidding requirement + } under
subsection (1)(a), (c), (d), (e) or (f) of this section
 { - are - }  { +  is + } not subject to the exemption
requirements of subsection (2) of this section.
  SECTION 8. ORS 279C.380 is amended to read:
  279C.380. (1) Except as provided in ORS 279C.390, a successful
bidder for a public improvement contract shall promptly execute
and deliver to the contracting agency the following bonds:
  (a) A performance bond in an amount equal to the full contract
price conditioned on the faithful performance of the contract in
accordance with the plans, specifications and conditions of the
contract. The performance bond must be solely for the protection
of the contracting agency that awarded the contract and any
public agency or agencies for whose benefit the contract was
awarded. If the public improvement contract is with a single
person to provide both design and construction of a public
improvement, the obligation of the performance bond for the
faithful performance of the contract required by this paragraph
must also be for the preparation and completion of the design and
related services covered under the contract. Notwithstanding when
a cause of action, claim or demand accrues or arises, the surety
is not liable after final completion of the contract, or longer
if provided for in the contract, for damages of any nature,
economic or otherwise and including corrective work, attributable
to the design aspect of a design-build project, or for the costs
of design revisions needed to implement corrective work. A
contracting agency may waive the requirement of a performance
bond. A contracting agency may permit the successful bidder to
submit a cashier's check or certified check in lieu of all or a
portion of the required performance bond.
  (b) A payment bond in an amount equal to the full contract
price, solely for the protection of claimants under ORS 279C.600.
  (2) If the public improvement contract is with a single person
to provide   { - construction manager and general contractor
services - }  { +  construction manager/general contractor
services as defined in section 2 of this 2013 Act + }, in which a
guaranteed maximum price { +  as defined in section 2 of this
2013 Act + } may be established by an amendment authorizing
construction period services following preconstruction period
services, the contractor shall provide the bonds required by
subsection (1) of this section upon execution of an amendment
establishing the guaranteed maximum price. The contracting agency
shall also require the contractor to provide bonds equal to the
value of construction services authorized by any early work
amendment in advance of the guaranteed maximum price amendment.
Such bonds must be provided before construction starts.
  (3) Each performance bond and each payment bond must be
executed solely by a surety company or companies holding a
certificate of authority to transact surety business in this
state. The bonds may not constitute the surety obligation of an
individual or individuals. The performance and payment bonds must
be payable to the contracting agency or to the public agency or
agencies for whose benefit the contract was awarded, as specified
in the solicitation documents, and shall be in a form approved by
the contracting agency.
  (4) In cases of emergency, or when the interest or property of
the contracting agency or the public agency or agencies for whose
benefit the contract was awarded probably would suffer material
injury by delay or other cause, the requirement of furnishing a
good and sufficient performance bond and a good and sufficient
payment bond for the faithful performance of any public
improvement contract may be excused, if a declaration of such
emergency is made in accordance with rules adopted under ORS
279A.065.
  (5) This section applies only to public improvement contracts
with a value, estimated by the contracting agency, of more than
$100,000 or, in the case of contracts for highways, bridges and
other transportation projects, more than $50,000.
  SECTION 9.  { + (1) Section 2 of this 2013 Act and the
amendments to ORS 279A.065, 279A.070, 279C.307, 279C.330,
279C.335 and 279C.380 by sections 3 to 8 of this 2013 Act become
operative July 1, 2014.
  (2) The Director of the Oregon Department of Administrative
Services, the Director of Transportation, the Attorney General or
a contracting agency that adopts rules under ORS 279A.065 may
take any action before the operative date specified in subsection
(1) of this section that is necessary to enable the director, the
Attorney General or the contracting agency to exercise, on and
after the operative date specified in subsection (1) of this
section, the duties, functions and powers conferred on the
director, the Attorney General or the contracting agency by
section 2 of this 2013 Act and the amendments to ORS 279A.065,
279A.070, 279C.307, 279C.330, 279C.335 and 279C.380 by sections 3
to 8 of this 2013 Act. + }
  SECTION 10.  { + Section 2 of this 2013 Act and the amendments
to ORS 279A.065, 279A.070, 279C.307, 279C.330, 279C.335 and
279C.380 by sections 3 to 8 of this 2013 Act apply to
procurements for which a contracting agency or, if a state agency
is not the contracting agency, a state agency, on or after the
operative date specified in section 9 of this 2013 Act, takes any
affirmative step to seek an exemption from competitive bidding
requirements. + }
  SECTION 11.  { + This 2013 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2013 Act takes effect on
its passage. + }
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