1.1                          A bill for an act 
  1.2             relating to public administration; providing for 
  1.3             design-build contracts; providing for exempt rules; 
  1.4             amending Minnesota Statutes 2000, sections 16B.31, 
  1.5             subdivision 1; 16B.33, subdivision 1, by adding 
  1.6             subdivisions; proposing coding for new law in 
  1.7             Minnesota Statutes, chapter 16C. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2000, section 16B.31, 
  1.10  subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [CONSTRUCTION PLANS AND SPECIFICATIONS.] (a)
  1.12  The commissioner shall (1) have plans and specifications 
  1.13  prepared for the construction, alteration, or enlargement of all 
  1.14  state buildings, structures, and other improvements except 
  1.15  highways and bridges, and except for buildings and structures 
  1.16  under the control of the board of trustees of the Minnesota 
  1.17  state colleges and universities; (2) approve those plans and 
  1.18  specifications; (3) advertise for bids and award all contracts 
  1.19  in connection with the improvements; (4) supervise and inspect 
  1.20  all work relating to the improvements; (5) approve all lawful 
  1.21  changes in plans and specifications after the contract for an 
  1.22  improvement is let; and (6) approve estimates for payment.  This 
  1.23  subdivision does not apply to the construction of the zoological 
  1.24  gardens.  
  1.25     (b) The commissioner may use a design-build method of 
  1.26  project development and construction and award a design-build 
  2.1   contract on the basis of selection criteria provided in section 
  2.2   16C.091. 
  2.3      (c) Paragraph (b) expires August 1, 2004. 
  2.4      Sec. 2.  Minnesota Statutes 2000, section 16B.33, 
  2.5   subdivision 1, is amended to read: 
  2.6      Subdivision 1.  [DEFINITIONS.] As used in this section, the 
  2.7   following terms have the meanings given them:  
  2.8      (a) "Agency" has the meaning given in section 16B.01.  
  2.9      (b) "Architect" means an architect or landscape architect 
  2.10  registered to practice under sections 326.02 to 326.15.  
  2.11     (c) "Board" means the state designer selection board.  
  2.12     (d) "Designer" means an architect or engineer, or a 
  2.13  partnership, association, or corporation comprised primarily of 
  2.14  architects or engineers or of both architects and engineers.  
  2.15     (e) "Design-builder" means the person who proposes to 
  2.16  design and construct a project governed by the procedures of 
  2.17  section 16C.091. 
  2.18     (f) "Engineer" means an engineer registered to practice 
  2.19  under sections 326.02 to 326.15.  
  2.20     ~~(f)~~ (g) "Person" includes an individual, corporation, 
  2.21  partnership, association, or any other legal entity.  
  2.22     ~~(g)~~ (h) "Primary designer" means the designer who is to 
  2.23  have primary design responsibility for a project, and does not 
  2.24  include designers who are merely consulted by the user agency 
  2.25  and do not have substantial design responsibility, or designers 
  2.26  who will or may be employed or consulted by the primary designer.
  2.27     ~~(h)~~ (i) "Project" means an undertaking to construct, erect, 
  2.28  or remodel a building by or for the state or an agency.  
  2.29     ~~(i)~~ (j) "User agency" means the agency undertaking a 
  2.30  specific project.  
  2.31     Sec. 3.  Minnesota Statutes 2000, section 16B.33, is 
  2.32  amended by adding a subdivision to read: 
  2.33     Subd. 5.  [DESIGN-BUILDER SELECTION PROCESS.] The board 
  2.34  shall select design-builders pursuant to section 16C.091.  The 
  2.35  board may not select a design-builder in which a member of the 
  2.36  designer selection board has a current financial interest. 
  3.1      Sec. 4.  Minnesota Statutes 2000, section 16B.33, is 
  3.2   amended by adding a subdivision to read: 
  3.3      Subd. 6.  [EXPIRATION.] Subdivisions 1, paragraph (e), and 
  3.4   5 expire August 1, 2004. 
  3.5      Sec. 5.  [16C.091] [DESIGN-BUILD CONTRACTS.] 
  3.6      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  3.7   section, the following terms have the meanings given them, 
  3.8   unless the context clearly indicates otherwise. 
  3.9      (b) "Acceptance" means a formal resolution of the 
  3.10  commissioner authorizing the execution of a design-build 
  3.11  contract. 
  3.12     (c) "Board" means the designer selection board, as 
  3.13  described in section 16B.33. 
  3.14     (d) "Capitol area architectural and planning board" means 
  3.15  the board established to govern the capitol area under section 
  3.16  15.50. 
  3.17     (e) "Commissioner" means the commissioner of administration.
  3.18     (f) "Design-build contract" means a state contract between 
  3.19  an agency and a design-builder to furnish the architectural, 
  3.20  engineering, and related design services as well as the labor, 
  3.21  materials, supplies, equipment, and construction services for a 
  3.22  project.  A design-build contract may be conditioned upon later 
  3.23  refinements in design and price, and may permit the agency to 
  3.24  make changes in the design of the project without invalidating 
  3.25  the design-build contract. 
  3.26     (g) "Design-builder" means the person who proposes to 
  3.27  design and build a project governed by the procedures of this 
  3.28  section. 
  3.29     (h) "Design criteria package" means a performance-oriented 
  3.30  description of the budget, program, and site for the project, 
  3.31  containing sufficient information to permit design-build firms 
  3.32  to prepare a response to the request for proposals.  The design 
  3.33  criteria package must specify performance-based criteria for the 
  3.34  project; legal description of the site; survey, subsurface soil, 
  3.35  and environmental information concerning the site; interior 
  3.36  space requirements, including adjacency diagrams; material 
  4.1   quality standards; conceptual design criteria; cost or budget 
  4.2   estimates; design and construction schedules; site development 
  4.3   requirements; provisions for utilities; stormwater retention and 
  4.4   disposal; and parking requirements applicable to the project and 
  4.5   any other information required to adequately describe the 
  4.6   project. 
  4.7      (i) "Design criteria professional" means a person who 
  4.8   holds, or employs individuals who hold, the license or licenses 
  4.9   under chapter 326 that would be required to design the 
  4.10  design-build project and who is employed by or under contract to 
  4.11  the commissioner to provide professional architecture and 
  4.12  engineering services in connection with the preparation of the 
  4.13  design criteria package. 
  4.14     (j) "Design proposal" means the phase-two proposal to be 
  4.15  submitted by a design-builder in the selection process, which 
  4.16  may include the building and site design, design and 
  4.17  construction schedule, and the construction cost, in such detail 
  4.18  as the board may require in the request for proposals. 
  4.19     (k) "Past performance" or "experience" does not include the 
  4.20  exercise or assertion of a person's legal rights. 
  4.21     (l) "Person" means an individual, partnership, joint 
  4.22  venture, corporation, professional corporation, business 
  4.23  association, or any other legal entity. 
  4.24     (m) "Project" means an undertaking to design, construct, 
  4.25  erect, or remodel a building by or for the state or an agency 
  4.26  under the supervision and control of the commissioner pursuant 
  4.27  to section 16B.30. 
  4.28     (n) "Proposal" means an offer by a design-builder to enter 
  4.29  into a design-build contract for a project in response to a 
  4.30  request for proposals, including a phase-one or phase-two 
  4.31  proposal pursuant to subdivisions 8 and 9. 
  4.32     (o) "Request for proposals" means the document or 
  4.33  publication through which the commissioner solicits proposals 
  4.34  for a design-build contract. 
  4.35     Subd. 2.  [AUTHORITY.] (a) Notwithstanding section 16C.06, 
  4.36  the commissioner may solicit and award a design-build contract 
  5.1   on the basis of the design-based selection process described in 
  5.2   subdivision 9 without competitive bids if the commissioner meets 
  5.3   the conditions in paragraphs (b) to (f).  In no case shall the 
  5.4   commissioner utilize the design-build method of construction 
  5.5   delivery for more than 20 percent of the projects where a 
  5.6   designer or design-builder is selected in a calendar year. 
  5.7      (b) Pursuant to section 16B.31, subdivision 4, if the 
  5.8   project is within the capitol area as defined in section 15.50, 
  5.9   the project shall comply with section 15.50, subdivision 2, 
  5.10  paragraphs (c), (d), and (e). 
  5.11     (c) The commissioner shall, for each project for which the 
  5.12  commissioner intends to use the design-build method, make a 
  5.13  written determination, including the findings indicating the 
  5.14  basis for the design-build decision, and notify the chair of the 
  5.15  house ways and means committee and the appropriate finance 
  5.16  committee chair of the senate, that it is in the best interest 
  5.17  of the state to enter into a design-build contract. 
  5.18     (d) If the project is within the capitol area as defined in 
  5.19  section 15.50, and if the design selection process does not 
  5.20  adhere to section 16B.31, subdivision 4, then the project shall 
  5.21  comply with paragraph (c) and receive periodic review and final 
  5.22  approval of the capitol area architectural and planning board. 
  5.23     (e) The board shall not solicit phase-two proposals, as 
  5.24  described in subdivision 7, unless it receives phase-one 
  5.25  proposals, as described in subdivision 7, from at least three 
  5.26  qualified design-builders.  If the board receives fewer than 
  5.27  three phase-one proposals from qualified design-builders, the 
  5.28  commissioner shall either ask the board to revise the request 
  5.29  for proposals and solicit new proposals or request selection of 
  5.30  a designer pursuant to section 16B.33 and proceed with 
  5.31  competitive bidding pursuant to section 16C.06. 
  5.32     (f) For all design-build projects, the commissioner shall 
  5.33  award a stipend to each design-builder who submits a phase-two 
  5.34  proposal, as described in subdivision 7, in an amount determined 
  5.35  by the board that shall be commensurate with the amount of 
  5.36  design services requested and allowed for each phase-two 
  6.1   proposal at current market rates for such services.  The stipend 
  6.2   paid to the design-builder selected to complete the project 
  6.3   shall be applied to the contract. 
  6.4      Subd. 3.  [RULES.] The commissioner shall adopt exempt 
  6.5   rules under section 14.386 consistent with this section for the 
  6.6   solicitation and award of design-build contracts.  
  6.7   Notwithstanding section 14.386, paragraph (b), the rules do not 
  6.8   expire.  The rules shall include, at a minimum, procedures 
  6.9   governing the following: 
  6.10     (1) preparing requests for proposals, including procedures 
  6.11  for determining the appropriate content of each request for 
  6.12  proposal; 
  6.13     (2) standards to be used to qualify or prequalify 
  6.14  design-builders that do not unduly restrict competition; 
  6.15     (3) preparing and submitting proposals; 
  6.16     (4) establishing procedures for evaluating proposals in as 
  6.17  objective a manner as possible; 
  6.18     (5) negotiations between the board or commissioner and 
  6.19  those submitting proposals prior to the acceptance of a proposal 
  6.20  if negotiations are contemplated, including safeguards to 
  6.21  preserve confidential information and proprietary information 
  6.22  supplied by those submitting proposals such as an offeror's 
  6.23  price, technical solutions, innovative or unique technology, and 
  6.24  innovative or unique use of commercially available items; 
  6.25     (6) awarding and executing design-build contracts; and 
  6.26     (7) acting on formal protests relating to the solicitation 
  6.27  of proposals or award of design-build contracts and awarding 
  6.28  attorney fees to a successful protester. 
  6.29     Subd. 4.  [LICENSING REQUIREMENTS.] (a) Each design-builder 
  6.30  shall be, employ, or have as a partner, member, coventurer, or 
  6.31  subcontractor, persons duly licensed and registered to provide 
  6.32  the services required to complete the project and do business in 
  6.33  this state. 
  6.34     (b) A design-builder may contract with the commissioner to 
  6.35  provide professional or construction services that the 
  6.36  design-builder is not itself licensed, registered, or qualified 
  7.1   to perform, so long as the design-builder provides such services 
  7.2   through subcontracts with duly licensed, registered, or 
  7.3   otherwise qualified persons in accordance with this section.  
  7.4      (c) Nothing in this section authorizing design-build 
  7.5   contracts is intended to limit or eliminate the responsibility 
  7.6   or liability owed by a professional on a design-build project to 
  7.7   the state or other third parties under existing law.  The design 
  7.8   service portion of a design-build contract shall be considered a 
  7.9   service and not a product.  
  7.10     Subd. 5.  [DEVELOPMENT OF DESIGN CRITERIA PACKAGE.] Each 
  7.11  request for proposals shall contain performance criteria 
  7.12  prepared by a design criteria professional.  The design criteria 
  7.13  professional shall be either an employee of the commissioner or 
  7.14  shall be selected by the board in compliance with section 
  7.15  16B.33.  The commissioner, in consultation with the board, the 
  7.16  agency, and the design criteria professional, shall determine 
  7.17  the scope and level of detail required for the design criteria 
  7.18  package beyond that required in subdivision 1, paragraph (h).  
  7.19  The criteria shall not impose unnecessary criteria beyond the 
  7.20  reasonable requirements to ensure maximum participation of 
  7.21  qualified design-builders, but must be in sufficient detail to 
  7.22  allow qualified persons to submit design proposals in accordance 
  7.23  with the request for proposals, given the nature of the project 
  7.24  and the level of design to be provided in the proposal.  If the 
  7.25  project is within the capitol area as defined in section 15.50, 
  7.26  and if the design selection process does not adhere to section 
  7.27  16B.31, subdivision 4, the commissioner shall also consult with 
  7.28  the capitol area architectural and planning board to determine 
  7.29  the scope and level of detail required for the design criteria 
  7.30  package. 
  7.31     Subd. 6.  [SOLICITATION OF PROPOSALS.] (a) A request for 
  7.32  proposals shall be prepared for each design-build contract 
  7.33  soliciting design-builders to respond in two phases pursuant to 
  7.34  subdivision 7.  A request for proposals shall contain, at a 
  7.35  minimum, the following elements: 
  7.36     (1) the identity of the agency for which the project will 
  8.1   be built and that will award the design-build contract; 
  8.2      (2) procedures for submitting proposals, the criteria for 
  8.3   evaluation of proposals and their relative weight for each 
  8.4   phase, how those criteria will be scored, and the procedures for 
  8.5   making awards, including a reference to the requirements of this 
  8.6   section and the rules of the commissioner; 
  8.7      (3) the proposed terms and conditions for the design-build 
  8.8   contract; 
  8.9      (4) the design criteria package; 
  8.10     (5) the qualifications the design-builder will be required 
  8.11  to have; 
  8.12     (6) a schedule for commencement and completion of the 
  8.13  project; 
  8.14     (7) budget limits for the project; 
  8.15     (8) affirmative action, disadvantaged business, small 
  8.16  business, or set-aside goals or requirements for the 
  8.17  design-build contract, if any; 
  8.18     (9) requirements for insurance and statutorily required 
  8.19  performance and payment bonds; 
  8.20     (10) a description of the drawings, specifications, or 
  8.21  other submittals to be submitted with the design proposal, with 
  8.22  guidance as to the form and level of completeness of the 
  8.23  drawings, specifications, or submittals that will be acceptable 
  8.24  and the stipend to be paid to the three design-builders who are 
  8.25  selected to submit phase-two proposals; and 
  8.26     (11) identification of any other material information 
  8.27  available from the commissioner or board, including without 
  8.28  limitation, surveys, soils reports, drawings or models of 
  8.29  existing structures, environmental studies, photographs, or 
  8.30  references to public records. 
  8.31     (b) Notice of requests for proposals must be advertised in 
  8.32  the same manner in which bids are solicited under section 
  8.33  16C.06, subdivision 2, paragraph (a). 
  8.34     Subd. 7.  [EVALUATION OF PROPOSALS.] (a) The board shall 
  8.35  solicit and evaluate proposals and select a design-builder in 
  8.36  two phases. 
  9.1      (b) In phase one, the board shall evaluate each 
  9.2   design-builder's experience, technical competence, capability to 
  9.3   perform, the past performance of the design-builder and its 
  9.4   employees, and other appropriate facts submitted by it in 
  9.5   response to the request for proposals pursuant to weighted 
  9.6   criteria set forth in the request for proposals.  The board may 
  9.7   not consider cost-related or price-related evaluation factors in 
  9.8   phase one.  The board shall qualify three potential 
  9.9   design-builders for phase two of the selection process. 
  9.10     (c) In phase two, the board shall select design-builders as 
  9.11  described in subdivision 9. 
  9.12     (d) In both phase one and phase two, the board may require 
  9.13  clarifications or further information from or conduct 
  9.14  discussions with design-builders to ensure conformance of 
  9.15  proposals with the design criteria package. 
  9.16     (e) If the project is within the capitol area, the capitol 
  9.17  area architecture and planning board shall participate in both 
  9.18  phase-one and phase-two evaluation processes. 
  9.19     Subd. 8.  [ACCEPTANCE OF PROPOSALS.] After obtaining and 
  9.20  evaluating proposals from each design-builder according to the 
  9.21  criteria and procedures set forth in the request for proposals, 
  9.22  the board shall select in phase two the proposal it considers 
  9.23  most advantageous to the public in accordance with subdivision 
  9.24  9, paragraph (g).  The commissioner may reject any proposal, 
  9.25  except for the purpose of evading the provisions and policies of 
  9.26  this section.  The commissioner may thereafter solicit new 
  9.27  proposals using the same or different performance criteria, 
  9.28  budget constraints, or qualifications.  In order to accept a 
  9.29  proposal or contract, the board must receive at least three 
  9.30  qualifying phase-two proposals unless the board determines that 
  9.31  there was otherwise adequate competition for the contract. 
  9.32     Subd. 9.  [DESIGN-BASED SELECTION.] (a) Design-builders 
  9.33  selected to submit phase-two proposals shall submit design 
  9.34  proposals as required by the request for proposals, consisting 
  9.35  of: 
  9.36     (1) preliminary plans and specifications, renderings, and 
 10.1   models as may be required in the request for proposals in 
 10.2   sufficient detail to describe the character, quality, and scope 
 10.3   of the project; 
 10.4      (2) a design and construction schedule; 
 10.5      (3) the price at which the design-builder will complete the 
 10.6   project if selected; and 
 10.7      (4) other materials the board determines are necessary to 
 10.8   fix the design, schedule, and cost of the project. 
 10.9      (b) Design proposals must be sealed and may not be opened 
 10.10  until expiration of the time established for making proposals as 
 10.11  set forth in the request for proposals. 
 10.12     (c) Design proposals must identify each person with whom 
 10.13  the design-builder proposes to enter into subcontracts for 
 10.14  primary design and construction obligations under the 
 10.15  design-build contract.  Persons so identified may not be 
 10.16  replaced without the approval of the commissioner, or the award 
 10.17  may be revoked. 
 10.18     (d) Design proposals must establish a cost that will not be 
 10.19  exceeded if the design proposal is accepted without change.  
 10.20  After a design proposal is accepted, the maximum cost in the 
 10.21  design proposal must be converted to fixed prices by negotiated 
 10.22  agreement between the commissioner and the design-builder.  The 
 10.23  stipend paid to the design-builder under subdivision 2, 
 10.24  paragraph (e), must be applied to the design-build contract. 
 10.25     (e) The amount and type of design services requested by the 
 10.26  board for the phase-two proposals may not be exceeded by those 
 10.27  submitting phase-two proposals.  Unless compensated for their 
 10.28  effort, design-builders must not be required to submit detailed 
 10.29  architectural or engineering design or construction documents as 
 10.30  part of the design proposal. 
 10.31     (f) The commissioner may require each design-builder to 
 10.32  submit with its phase-two proposal a cash deposit, letter of 
 10.33  credit, or bid bond not to exceed five percent of the maximum 
 10.34  cost of the design-build contract, as established by the 
 10.35  proposal.  If the proposal is accepted but the design-builder 
 10.36  fails without good cause to execute the design-build contract, 
 11.1   the deposit or bond is forfeited in an amount not to exceed the 
 11.2   difference between the proposal in question and the next highest 
 11.3   proposal. 
 11.4      (g) The board shall accept the proposal that best meets the 
 11.5   weighted evaluation criteria set forth in the request for 
 11.6   proposal.  Selection according to this method may result in an 
 11.7   award not being made to the lowest cost proposal.  The perceived 
 11.8   benefits of the higher priced proposal must merit the additional 
 11.9   cost according to the weighted evaluation criteria, and the 
 11.10  rationale for such a departure must be stated at the time of 
 11.11  award. 
 11.12     Subd. 10.  [EXPIRATION.] This section expires August 1, 
 11.13  2004. 
 11.14     Sec. 6.  [EFFECTIVE DATE.] 
 11.15     Sections 1 to 5 are effective the day following final 
 11.16  enactment.