1.1                          A bill for an act 
  1.2             relating to transportation; providing for design-build 
  1.3             method of state transportation project delivery; 
  1.4             proposing coding for new law in Minnesota Statutes, 
  1.5             chapter 161. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [161.3201] [DESIGN-BUILD CONTRACTS; 
  1.8   DEFINITIONS.] 
  1.9      Subdivision 1.  [SCOPE.] The terms used in sections 
  1.10  161.3201 to 161.3208 have the meanings given in this section. 
  1.11     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
  1.12  commissioner of transportation. 
  1.13     Subd. 3.  [DESIGN-BUILD CONTRACT.] "Design-build contract" 
  1.14  means a single contract between the department of transportation 
  1.15  and a design-build company or firm to furnish the architectural 
  1.16  or engineering and related design services as well as the labor, 
  1.17  material, supplies, equipment, and construction services for the 
  1.18  transportation project. 
  1.19     Subd. 4.  [DESIGN-BUILD FIRM.] "Design-build firm" means a 
  1.20  proprietorship, partnership, limited liability partnership, 
  1.21  joint venture, corporation, any type of limited liability 
  1.22  company, professional corporation, or any legal entity. 
  1.23     Subd. 5.  [DESIGN-BUILD PROFESSIONAL.] "Design-build 
  1.24  professional" means a person who holds a license under chapter 
  1.25  326 that is required to be registered under Minnesota law. 
  2.1      Subd. 6.  [DESIGN-BUILD TRANSPORTATION 
  2.2   PROJECT.] "Design-build transportation project" means the 
  2.3   procurement of both the design and construction of a 
  2.4   transportation project in a single contract with a company or 
  2.5   companies capable of providing the necessary engineering 
  2.6   services and construction. 
  2.7      Subd. 7.  [DESIGN-BUILDER.] "Design-builder" means the 
  2.8   design-build firm that proposes to design and build a 
  2.9   transportation project governed by the procedures of this 
  2.10  section. 
  2.11     Subd. 8.  [REQUEST FOR PROPOSALS OR RFP.] "Request for 
  2.12  proposals" or "RFP" means the document by which the commissioner 
  2.13  solicits proposals from the prequalified design-build firms to 
  2.14  design and construct the transportation project. 
  2.15     Subd. 9.  [REQUEST FOR QUALIFICATIONS OR RFQ.] "Request for 
  2.16  qualifications" or "RFQ" means a process to prequalify and 
  2.17  short-list potential design-build firms. 
  2.18     Subd. 10.  [ROAD AUTHORITY.] "Road authority" means the 
  2.19  department of transportation. 
  2.20     Subd. 11.  [TRANSPORTATION AGENCY.] "Transportation agency" 
  2.21  means the department of transportation. 
  2.22     Sec. 2.  [161.3202] [DESIGN-BUILD AUTHORITY FOR MAJOR 
  2.23  PROJECTS.] 
  2.24     Subdivision 1.  [BEST VALUE SELECTION.] Notwithstanding 
  2.25  sections 16C.25, 161.315, 161.32, 161.321, 174.14 to 174.17, or 
  2.26  any other law to the contrary, the commissioner may solicit and 
  2.27  award a design-build contract for a project on the basis of a 
  2.28  best value selection process. 
  2.29     Subd. 2.  [COMPETITIVE, OPEN PROCESS.] Sections 161.3201 to 
  2.30  161.3208 apply only to transportation projects using the 
  2.31  two-step competitive process utilizing public solicitation for 
  2.32  design-build services. 
  2.33     Subd. 3.  [ONLY LARGE PROJECTS ELIGIBLE.] The commissioner 
  2.34  may award a design-build contract through a two-step competitive 
  2.35  process only for projects with a minimum estimated value of 
  2.36  $40,000,000.  The commissioner may not artificially combine or 
  3.1   aggregate projects in order to circumvent this minimum 
  3.2   requirement.  The commissioner shall solicit requests for 
  3.3   qualifications proposals in the State Register for two 
  3.4   consecutive weeks. 
  3.5      Subd. 4.  [COMMISSIONER REMAINS RESPONSIBLE FOR CERTAIN 
  3.6   COSTS.] The commissioner shall remain responsible for obtaining 
  3.7   right-of-way, environmental permits, railroad approvals, related 
  3.8   permits, and clearances unless specifically stated otherwise in 
  3.9   the design-build documents. 
  3.10     Sec. 3.  [161.3203] [PRELIMINARY DETERMINATION TO AWARD 
  3.11  DESIGN-BUILD CONTRACT.] 
  3.12     Subdivision 1.  [GENERAL CRITERIA.] A design-build 
  3.13  contracting procedure authorized under sections 161.3201 to 
  3.14  161.3208 may be used for a specific project only after the 
  3.15  commissioner determines that awarding a design-build contract 
  3.16  will serve the public interest by providing a substantial fiscal 
  3.17  benefit or that use of the traditional method of awarding a 
  3.18  construction contract to the lowest responsible bidder is not 
  3.19  practical for meeting desired quality standards or delivery 
  3.20  schedules. 
  3.21     Subd. 2.  [SPECIFIC CRITERIA.] The commissioner shall use 
  3.22  the following criteria as the minimum basis for determining when 
  3.23  to use the design-build method of project delivery: 
  3.24     (1) the extent to which it can adequately define the 
  3.25  project requirements in a proposed scope of the design and 
  3.26  construction desired; 
  3.27     (2) the time constraints for delivery of the project; 
  3.28     (3) the capability and experience of potential contractors 
  3.29  with the design-build method of project delivery or similar 
  3.30  experience; 
  3.31     (4) the suitability of the project for use of the 
  3.32  design-build method of project delivery with respect to time, 
  3.33  schedule, costs, and quality factors; 
  3.34     (5) the capability of the department of transportation to 
  3.35  manage the project, including the employment of experienced 
  3.36  personnel or outside consultants; 
  4.1      (6) the capability of the department of transportation to 
  4.2   oversee the project with persons who are familiar and 
  4.3   experienced with the design-build method of project delivery or 
  4.4   similar experience; and 
  4.5      (7) other criteria the commissioner deems relevant and 
  4.6   states in writing in its determination to utilize the 
  4.7   design-build method of project delivery. 
  4.8      Subd. 3.  [NOTICE AND PUBLIC COMMENT.] When the 
  4.9   commissioner determines to use the design-build contracting 
  4.10  procedure authorized under this section for a construction or 
  4.11  reconstruction project, it shall first ensure adequate public 
  4.12  notification and opportunity for public review and comment by 
  4.13  implementing the written public comments procedure under section 
  4.14  161.3204. 
  4.15     Sec. 4.  [161.3204] [DESIGN-BUILD NOTICE, COMMENT, REPORT.] 
  4.16     Subdivision 1.  [NOTICE AND COMMENT.] The commissioner 
  4.17  shall establish a 30-day public comment period to receive public 
  4.18  comment on its preliminary determination to use the design-build 
  4.19  construction contracting procedure.  The commissioner shall 
  4.20  receive written comments concerning the preliminary 
  4.21  determination during the public comment period.  At least seven 
  4.22  days before the beginning of the public comment period, the 
  4.23  commissioner shall have notice of the public comment period 
  4.24  published at least once in a legal newspaper of general 
  4.25  circulation published in or as near as possible to that part of 
  4.26  the county in which the work will be done.  The notice must 
  4.27  clearly describe the proposed project and the preliminary 
  4.28  determination to use the alternative contracting procedure.  The 
  4.29  notice must also indicate when, where, and how persons may 
  4.30  submit their written comments on the preliminary determination. 
  4.31     Subd. 2.  [SUMMARY REPORT OF REASONS FOR 
  4.32  DETERMINATION.] The commissioner shall summarize in a written 
  4.33  statement its reasons for using the design-build construction 
  4.34  contracting procedure.  This statement, along with other 
  4.35  relevant information describing the project, must be made 
  4.36  available upon request to interested parties at least seven days 
  5.1   before the beginning of the public comment period. 
  5.2      Subd. 3.  [FINAL DETERMINATION AUTHORITY.] Final 
  5.3   determination to use a design-build construction contracting 
  5.4   procedure may be made only by the commissioner. 
  5.5      Sec. 5.  [161.3205] [LICENSING REQUIREMENTS.] 
  5.6      Subdivision 1.  [LICENSED PROFESSIONAL REQUIRED.] Each 
  5.7   design-builder shall employ, or have as a partner, member, 
  5.8   officer, coventurer, or subcontractor a person duly licensed and 
  5.9   registered to provide the services required to complete the 
  5.10  project and do business in the state. 
  5.11     Subd. 2.  [CONTRACTING FOR LICENSED PROFESSIONAL.] A 
  5.12  design-builder may enter into a contract to provide professional 
  5.13  or construction services for a project that the design-builder 
  5.14  is not licensed, registered, or qualified to perform, so long as 
  5.15  the design-builder provides those services through 
  5.16  subcontractors with duly licensed, registered, or otherwise 
  5.17  qualified persons in accordance with sections 161.3201 to 
  5.18  161.3208. 
  5.19     Subd. 3.  [LIABILITY.] Nothing in this section authorizing 
  5.20  design-build contracts is intended to limit or eliminate the 
  5.21  responsibility or liability owed by a professional on a 
  5.22  design-build project to the state, county, or city, or other 
  5.23  third parties under existing law. 
  5.24     Sec. 6.  [161.3206] [DESIGN-BUILD RFQ; SELECTION TEAM; 
  5.25  EVALUATION.] 
  5.26     Subdivision 1.  [TWO-PHASE PROCEDURE.] If the commissioner 
  5.27  determines that the design-build method of project delivery is 
  5.28  appropriate for a project, the commissioner shall establish a 
  5.29  two-phase procedure for awarding the design-build contract, as 
  5.30  described in this subdivision and section 161.3207. 
  5.31     Subd. 2.  [SELECTION TEAM.] During phase-one request for 
  5.32  qualifications (RFQ) and before solicitation, the commissioner 
  5.33  shall appoint a selection team of at least five persons.  At 
  5.34  least three of the selection team must be architects or 
  5.35  engineers who are registered.  The selection team members may be 
  5.36  either department of transportation employees or outside 
  6.1   consultants.  The selection team must also include a contractor 
  6.2   who is not involved in the project.  An architect or engineer 
  6.3   who is serving on the selection team and is not an employee of 
  6.4   the department of transportation is prohibited from being 
  6.5   otherwise involved in the project.  The commissioner shall 
  6.6   prepare or have prepared a request for qualifications. 
  6.7      Subd. 3.  [CONTENTS.] The request for qualifications must 
  6.8   include the following: 
  6.9      (1) the minimum qualifications of design-builders necessary 
  6.10  to meet the requirements for acceptance; 
  6.11     (2) a scope of work statement and schedule; 
  6.12     (3) documents defining the project requirements; 
  6.13     (4) the form of contract to be awarded; 
  6.14     (5) the selection criteria for compiling a short list and 
  6.15  the number of firms to be included in the short list, which must 
  6.16  be at least two; 
  6.17     (6) a description of phase-two requirements and subsequent 
  6.18  management needed to bring the project to completion; 
  6.19     (7) the maximum time allowed for design and construction; 
  6.20     (8) the commissioner's estimated cost of design and 
  6.21  construction; and 
  6.22     (9) demonstrated construction experience, design 
  6.23  experience, financial, manpower, and equipment resources 
  6.24  available from potential design-builders for the project and 
  6.25  experience in other design-build transportation projects or 
  6.26  similar projects. 
  6.27     Subd. 4.  [EVALUATION.] The selection team shall evaluate 
  6.28  the design-build qualifications of responding firms and shall 
  6.29  compile a short list of firms in accordance with technical and 
  6.30  construction qualifications-based criteria.  If only one 
  6.31  design-build firm responds to the RFQ, the selection team may 
  6.32  readvertise or cancel the project as the selection team deems 
  6.33  necessary. 
  6.34     Sec. 7.  [161.3207] [RFP FOR DESIGN-BUILD.] During phase 
  6.35  two, the commissioner shall issue a request for proposals (RFP) 
  6.36  to the design-builders on the short list.  The request must 
  7.1   include: 
  7.2      (1) the scope of work, including (i) performance and 
  7.3   technical requirements, (ii) conceptual design, (iii) 
  7.4   specifications, and (iv) functional and operational elements for 
  7.5   the delivery of the completed project, which must be prepared by 
  7.6   a registered or licensed professional engineer; 
  7.7      (2) a description of the qualifications required of the 
  7.8   design-builder and the selection criteria, including the weight 
  7.9   or relative order, or both, of each criterion; 
  7.10     (3) copies of the contract documents that the successful 
  7.11  proposer will be expected to sign; 
  7.12     (4) the maximum time allowable for design and construction; 
  7.13     (5) the road authority's estimated cost of design and 
  7.14  construction; 
  7.15     (6) the requirement that a submitted proposal be segmented 
  7.16  into two parts, a technical proposal and a price proposal; 
  7.17     (7) the requirement that each proposal be in a separately 
  7.18  sealed, clearly identified package and include the date and time 
  7.19  of the submittal deadline; 
  7.20     (8) the requirement that the technical proposal include a 
  7.21  critical path method schedule or similar schematic design plans 
  7.22  and specifications, technical reports, calculations, permit 
  7.23  requirements, applicable development fees, and other data 
  7.24  requested in the request for proposals; 
  7.25     (9) the requirement that the price proposal contain all 
  7.26  design, construction, engineering, inspection, and construction 
  7.27  costs of the proposed project; 
  7.28     (10) the date, time, and location of the public opening of 
  7.29  the sealed price proposals; and 
  7.30     (11) other information relevant to the project. 
  7.31     Sec. 8.  [161.3208] [DESIGN-BUILD AWARD; LOW-BID PROCESS; 
  7.32  WARRANTY.] 
  7.33     Subdivision 1.  [AWARD; COMPUTATION, ANNOUNCEMENT, 
  7.34  ADJUSTMENT, STIPENDS.] After the commissioner has reviewed the 
  7.35  sealed proposals: 
  7.36     (a) The selection team shall score the technical proposals 
  8.1   using the selection criteria in the request for proposals 
  8.2   (RFP).  The technical review team shall then submit a technical 
  8.3   proposal score for each design-builder to the commissioner.  The 
  8.4   technical review team shall reject any proposal it deems 
  8.5   nonresponsive. 
  8.6      (b) The commissioner shall announce the technical proposal 
  8.7   score for each design-builder and shall publicly open the sealed 
  8.8   price proposals and shall divide each design-builder's price by 
  8.9   the score that the selection team has given to it to obtain an 
  8.10  adjusted score.  The design-builder selected must be that 
  8.11  responsive and responsible design-builder whose adjusted score 
  8.12  is the lowest. 
  8.13     (c) If a time factor is included with the selection 
  8.14  criteria in the request for proposals package, the commissioner 
  8.15  may also adjust the bids using a value of the time factor 
  8.16  established by the commissioner.  The value of the time factor 
  8.17  must be expressed as a value per day.  The adjustment must be 
  8.18  based on the total time value.  The total time value is the 
  8.19  design-builder's total number of days to complete the project 
  8.20  multiplied by the factor.  The time-adjusted price is the total 
  8.21  time value plus the bid amount.  This adjustment must be used 
  8.22  for selection purposes only, and must not affect the road 
  8.23  authority's liquidated damages schedule or incentive or 
  8.24  disincentive program.  An adjusted score must then be obtained 
  8.25  by dividing each design-builder's time-adjusted price by the 
  8.26  score given by the technical review team.  The commissioner 
  8.27  shall select the responsive and responsible design-builder whose 
  8.28  adjusted score is the lowest. 
  8.29     (d) Unless all proposals are rejected, the commissioner 
  8.30  shall award the contract to the responsive and responsible 
  8.31  design-builder with the lowest adjusted score.  The commissioner 
  8.32  shall reserve the right to reject all proposals. 
  8.33     (e) The commissioner shall award a stipulated fee equal to 
  8.34  two-tenths of one percent of the road authority's estimated cost 
  8.35  of design and construction to each short-list, responsible 
  8.36  proposer who provides a responsive but unsuccessful proposal.  
  9.1   If the commissioner does not award a contract, all responsive 
  9.2   proposers must receive the stipulated fee.  If the commissioner 
  9.3   cancels the contract before reviewing the technical proposals, 
  9.4   the commissioner shall award each design-builder on the short 
  9.5   list a stipulated fee of two-tenths of one percent of the 
  9.6   commissioner's estimated cost of design and construction.  The 
  9.7   commissioner shall pay the stipulated fee to each proposer 
  9.8   within 90 days after the award of the contract or the decision 
  9.9   not to award a contract.  In consideration for paying the 
  9.10  stipulated fee, the commissioner may use any ideas or 
  9.11  information contained in the proposals in connection with any 
  9.12  contract awarded for the project or in connection with a 
  9.13  subsequent procurement, without any obligation to pay any 
  9.14  additional compensation to the unsuccessful proposers.  
  9.15  Notwithstanding the other provisions of this paragraph, an 
  9.16  unsuccessful short-list proposer may elect to waive the 
  9.17  stipulated fee.  If an unsuccessful short-list proposer elects 
  9.18  to waive the stipulated fee, the commissioner may not use ideas 
  9.19  and information contained in that proposer's proposal. 
  9.20     Subd. 2.  [LOW-BID DESIGN-BUILD PROCESS.] (a) The 
  9.21  commissioner may also use low-bid, design-build procedures to 
  9.22  award a design-build contract.  The low-bid, design-build 
  9.23  procedures are used for design-build projects where the scope of 
  9.24  work can be clearly defined and a portion of the design of the 
  9.25  project has been completed and will be provided to the 
  9.26  design-build firms. 
  9.27     (b) Low-bid, design-build projects may not require an RFQ, 
  9.28  short-listing, or proposals, but will require an RFP. 
  9.29     (c) Low-bid, design-build procedures include a two-step 
  9.30  sealed-bid process.  Submitted proposals must include, 
  9.31  separately, a technical proposal and a price proposal. 
  9.32     (d) The first step is the review of the technical proposal 
  9.33  by the selection team as provided in section 161.3206, 
  9.34  subdivision 2.  The selection team will open the technical 
  9.35  proposal first and will determine if it complies with the 
  9.36  requirements of the RFP and is responsive. 
 10.1      (e) The second step is the determination of the low bidder 
 10.2   based on the price proposal.  The commissioner may not open the 
 10.3   price proposal until the review of the technical proposal is 
 10.4   complete. 
 10.5      (f) The award under low-bid, design-build procedures must 
 10.6   be made to the sealed bid that is responsive to the technical 
 10.7   requirements and that is also the lowest bid. 
 10.8      (g) For transportation projects using low-bid, design-build 
 10.9   procedures, any engineering consultant that completes the design 
 10.10  for the low-bid, design-build project must have previously been 
 10.11  approved by the department. 
 10.12     Subd. 3.  [WARRANTY; LONG-TERM MAINTENANCE.] The RFP may 
 10.13  include warranties for long-term maintenance.  The warranties 
 10.14  for long-term maintenance, if required, will be addressed in the 
 10.15  RFP.  The commissioner may reject any and all bids.  A stipend 
 10.16  will not be made for low-bid design-build projects.  
 10.17     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 10.18  following final enactment.