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

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-Amended.html


     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

SA to SB 254

LC 2270/SB 254-1

                      SENATE AMENDMENTS TO
                         SENATE BILL 254

           By COMMITTEE ON BUSINESS AND TRANSPORTATION

                            April 22

  On page 1 of the printed bill, delete lines 6 through 27 and
delete pages 2 through 4.
  On page 5, delete lines 1 through 7 and insert:
  '  { +  SECTION 1. + }  { + Sections 2 and 3 of this 2013 Act
are added to and made a part of ORS chapter 279C. + }
  '  { +  SECTION 2. + }  { + As used in this section and ORS
279A.065, 279C.307, 279C.335 and 279C.380 and section 3 of this
2013 Act:
  ' (1) 'Construction manager/general contractor' means a person
that provides construction manager/general contractor services to
a contracting agency under a public improvement contract.
  ' (2)(a) 'Construction manager/general contractor services '
means construction-related services that a contracting agency
procures by means of an alternative contracting method under ORS
279C.335 and that:
  ' (A) Include a construction manager/general contractor's:
  ' (i) Functioning as a member of a project team that includes
the contracting agency, the architect or engineer that designs
the public improvement under a separate contract with the
contracting agency and other contractors and consultants; and
  ' (ii) 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; and
  ' (B) May include, depending on the specific terms of the
public improvement contract and on whether the contracting agency
proceeds with the public improvement after completing a design,
developing a scope of work and setting a budget, a construction
manager/general contractor's:
  ' (i) Devising a schedule for constructing the public
improvement;
  ' (ii) Estimating construction, materials, labor and other
costs for the public improvement;
  ' (iii) Establishing a fixed price, a guaranteed maximum price
or other maximum price;
  ' (iv) Constructing portions of the public improvement and
subcontracting portions to other contractors;
  ' (v) Coordinating and overseeing the construction process; or
  ' (vi) Performing other services related to constructing a
public improvement in accordance with the terms of the public
improvement contract.
  ' (b) 'Construction manager/general contractor services' does
not include services related to constructing a public improvement
under the terms of:
  ' (A) A public improvement contract that a contracting agency
awards on the basis of a competitive bidding process that does
not require an exemption under ORS 279C.335;
  ' (B) A public improvement contract that results from a
design-build procurement, as defined in rules the Attorney
General or a contracting agency adopts under ORS 279A.065;
  ' (C) An energy savings performance contract;
  ' (D) A public improvement contract for a transportation
project that a contracting agency awards on the basis of:
  ' (i) An evaluation of a bidder's qualifications, the amount of
the bid and the amount of time the bidder will take to complete
the public improvement; or
  ' (ii) An evaluation of the bidder's qualifications and past
experience with similar public improvements, the amount of the
bid and the approach the bidder intends to use to complete the
public improvement; or
  ' (E) A public improvement contract that is otherwise exempt
from a requirement for competitive bidding under ORS 279C.335
(2).
  ' (3) '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. + }
  '  { +  SECTION 3. + }  { + (1) A contracting agency that
intends to procure construction manager/general contractor
services shall procure the construction manager/general
contractor services in accordance with model rules the Attorney
General adopts under ORS 279A.065 (3).
  ' (2) 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 and what weight
the contracting agency will give each criterion in the
evaluation;
  ' (b) Describe how the contracting agency will use interviews
in the contracting agency's procurement and how the contracting
agency will evaluate information the contracting agency obtains
from 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 a fixed price, guaranteed maximum price or other
maximum price specified in the public improvement contract 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);
  ' (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 plans to
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;
  ' (j) State whether the contracting agency will discuss the
procurement with prospective bidders or proposers before
establishing a competitive range or before awarding a public
improvement contract;
  ' (k) Identify any terms and conditions the contracting agency
will discuss or negotiate before entering into the public
improvement contract;
  ' (L) State whether the contracting agency will allow a
proposer to submit a revised proposal and identify the elements
of the proposal that the proposer may revise; and
  ' (m) Describe the process, if any, that the contracting agency
intends to use to discuss and negotiate terms and conditions for
the public improvement contract, accept and evaluate revisions to
a proposal and establish a competitive range.
  ' (3) By the earlier of the date on which a contracting agency
and a construction manager/general contractor agree on a fixed
price, guaranteed maximum price or other 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 select subcontractors. The
methods must be competitive and should provide prospective
subcontractors with a reasonable opportunity to participate in
the construction manager/general contractor's qualification and
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 qualification and
selection 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 qualification and selection 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
qualification and selection 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 qualification and
selection process described in paragraph (a) of this subsection
in response to a request from a prospective subcontractor that
the construction manager/general contractor did not select for a
subcontract. + }
  '  { +  SECTION 4. + } 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. Before
adopting or amending a rule under this subsection, the Attorney
General shall consult with the Director of the Oregon Department
of Administrative Services, the Director of Transportation, the
Director of the Department of Corrections, representatives of
county governments, representatives of city governments,
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.'.
  In line 8, delete '4' and insert '5'.
  In line 16, delete '5' and insert '6'.
  In line 28, delete ', as defined'.
  In line 29, delete 'in section 2 of this 2013 Act,'.
  In line 34, delete '6' and insert '7'.
  On page 6, delete lines 4 through 45 and delete pages 7 and 8.
  On page 9, delete lines 1 through 9 and insert:
  '  { +  SECTION 8. + } ORS 279C.335 is amended to read:
  ' 279C.335. (1) All public improvement contracts shall be based
upon competitive bids except:
  ' (a)   { - Contracts made - }  { +  A public improvement
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 { +  public improvement + } 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
of the Oregon Department of Administrative Services, the Director
of Transportation 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)   { - 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 applicable to the particular public
improvement contract or class of public improvement contracts,
the following:
  ' (A) How many + }   { - the number of - }  persons { +
are + } available to bid
  { - and such other factors as may be deemed appropriate. - }
 { + ;
  ' (B) The construction budget and the projected operating costs
for the completed public improvement;
  ' (C) Public benefits that may result from the public
improvement contract;
  ' (D) Whether value engineering techniques may decrease the
cost of the public improvement;
  ' (E) The cost and availability of specialized expertise that
is necessary for the public improvement;
  ' (F) Any likely increases in public safety;
  ' (G) Whether granting the exemption may reduce risks to the
contracting agency, the state agency or the public that are
related to the public improvement;
  ' (H) Whether granting the exemption will affect the sources of
funding for the public improvement;
  ' (I) Whether granting the exemption will better enable the
contracting agency to control the impact that market conditions
may have on the cost of and time necessary to complete the public
improvement;
  ' (J) Whether granting the exemption will better enable the
contracting agency to address the size and technical complexity
of the public improvement;
  ' (K) Whether the public improvement involves new construction
or renovates or remodels an existing structure;
  ' (L) Whether the public improvement will be occupied or
unoccupied during construction;
  ' (M) Whether the public improvement will require a single
phase of construction work or multiple phases of construction
work to address specific project conditions; and
  ' (N) 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 assist in developing the alternative
contracting method that the contracting agency or state agency
will use to award the public improvement contract and to 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 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 - }  { +
approving  + }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 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.'.
  In line 10, delete '8' and insert '9'.
  In line 30, delete 'as defined in'.
  In line 31, delete the boldfaced material.
  In line 32, delete the boldfaced material.
  On page 10, line 8, delete '9' and insert '10' and delete '
Section 2' and insert 'Sections 2 and 3'.
  In line 9, delete '3 to 8' and insert '4 to 9'.
  In line 17, delete 'section 2' and insert 'sections 2 and 3'.
  In line 18, delete '3 to 8' and insert '4 to 9'.
  In line 19, delete '10' and insert '11' and delete ' Section 2'
and insert 'Sections 2 and 3'.
  In line 20, delete '3 to 8' and insert '4 to 9'.
  In line 22, delete '9' and insert '10'.
  In line 24, delete '11' and insert '12'.
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