Senate File 2264 - Introduced SENATE FILE 2264 BY COMMITTEE ON STATE GOVERNMENT (SUCCESSOR TO SSB 3168) A BILL FOR An Act concerning public construction bidding by establishing a 1 pilot program for alternative project delivery processes for 2 certain public projects and utilizing alternative selection 3 procedures for certain professional services and making an 4 appropriation. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5831SV (1) 84 ec/nh

S.F. 2264 Section 1. Section 26.4, Code 2011, is amended to read as 1 follows: 2 26.4 Exemptions from competitive bids and quotations 3 Professional services procurement . 4 1. Architectural, landscape architectural, design-build, or 5 engineering design services procured for a public improvement 6 are not subject to sections 26.3 and 26.14 . 7 2. Professional services provided for a public improvement 8 by an architect registered under chapter 544A, an engineer 9 or land surveyor licensed under chapter 542B, a landscape 10 architect licensed under chapter 544B, or a design-build entity 11 as defined in section 26.14B, shall be procured utilizing a 12 qualifications-based and direct negotiation selection process. 13 3. Selection of professional services through a 14 qualifications-based and direct negotiation selection process 15 shall proceed, in order, through the following steps: 16 a. The governmental entity shall issue for the purpose 17 of fair and open competition a public notice of request for 18 qualifications and a description of the nature and type of 19 public improvement proposed and preliminary scope of services 20 required. 21 b. The governmental entity shall form a selection committee 22 of not less than three persons to evaluate and rank the 23 qualifications of the firms submitting qualifications and enter 24 into negotiations. 25 c. In evaluating the qualifications, the selection committee 26 shall consider the following criteria: 27 (1) The specialized experience and technical competence of 28 the firm with respect to the type of services required. 29 (2) The capacity and capability of the firm to perform the 30 work in question, including specialized services, within the 31 time limitations fixed for the completion of the project. 32 (3) The past record of performance of the firm with respect 33 to such factors as control of costs, quality of work, and 34 ability to meet schedules. 35 -1- LSB 5831SV (1) 84 ec/nh 1/ 10

S.F. 2264 (4) The firm’s proximity to and familiarity with the area in 1 which the project is located. 2 (5) Consideration shall not be given, or information 3 requested, concerning fees, prices, completion times, or 4 any other cost information at any point prior to entering 5 negotiations. 6 d. Following the evaluation of the qualifications of the 7 firms, the selection committee shall rank the three most highly 8 qualified firms in the order of best qualified first and shall 9 enter into negotiations pursuant to the following requirements: 10 (1) The selection committee shall enter into negotiations 11 only with the firm considered best qualified and capable of 12 performing the desired work. The selection committee shall 13 seek to reach agreement on scope, contract terms, fair and 14 reasonable fees, and any other necessary items. 15 (2) If, in the opinion of the selection committee, the 16 committee is unable to negotiate a satisfactory contract with 17 the best qualified firm, negotiations with that firm shall 18 be terminated. The selection committee shall then undertake 19 negotiations with the next best qualified firm. If there is a 20 failing of accord with the second firm, negotiations with such 21 firm shall be terminated. The selection committee shall then 22 undertake negotiations with the third qualified firm. 23 (3) If the selection committee is not able to negotiate 24 a satisfactory contract with any of the three most qualified 25 firms, the selection committee shall reevaluate the necessary 26 professional services, including the scope, estimated cost, 27 complexity, and reasonable fee requirements. The selection 28 committee shall then reevaluate qualifications and compile a 29 new list of not less than three qualified firms and proceed in 30 accordance with the provisions of this section. 31 Sec. 2. NEW SECTION . 26.14B Alternative project delivery 32 pilot program —— advisory committee. 33 1. As used in this section, unless the context otherwise 34 provides: 35 -2- LSB 5831SV (1) 84 ec/nh 2/ 10

S.F. 2264 a. “Alternative project delivery” means procuring and 1 delivering design and construction services for a public 2 project according to one of the selection methods outlined in 3 this section. 4 b. “Construction management services” means an alternative 5 project delivery method whereby services are provided by 6 a construction manager in a manner similar to a general 7 contractor, and which requires the construction manager to 8 solicit competitive bids for the trade packages or subcontracts 9 developed for the public project and to enter into the trade 10 contracts or subcontracts for the public project. Construction 11 management services may include but are not limited to 12 scheduling, value analysis, system analysis, constructability 13 reviews, progress document reviews, subcontractor involvement 14 and prequalification, subcontractor bonding policy, budgeting 15 and price guarantees, and construction coordination. 16 c. “Construction manager” means an individual, partnership, 17 joint venture, corporation, or other legal entity that 18 utilizes skill and knowledge of general contracting to perform 19 construction management services and preconstruction services, 20 competitively procures and contracts with specialty contractors 21 or subcontractors, and assumes the responsibility and the risk 22 for construction delivery within a specified cost and schedule. 23 d. “Construction services” means the process of planning, 24 building, equipping, altering, repairing, improving, or 25 demolishing any structure or appurtenance thereto, including 26 facilities, utilities, or other improvements to real property, 27 but excluding highways, roads, bridges, dams, or stand-alone 28 parking lots. 29 e. “Design professional” means an architect registered under 30 chapter 544A, an engineer licensed under chapter 542B, or a 31 landscape architect licensed under chapter 544B. 32 f. “Design-build entity” means an individual, partnership, 33 joint venture, corporation, or other legal entity that 34 furnishes design-build services, whether by itself or through 35 -3- LSB 5831SV (1) 84 ec/nh 3/ 10

S.F. 2264 subcontracts. 1 g. “Design-build services” means a method of alternative 2 project delivery for which both design and construction 3 services are provided under one contract. “Design-build 4 services” may include architecture, engineering, and related 5 design services required for a given project and the labor, 6 materials, and other construction services for the project. 7 h. “Preconstruction services” means a series of services 8 including but not limited to design review, scheduling, 9 estimating, cost control, value engineering, constructability 10 evaluation, and preparation and coordination of bid packages. 11 i. “Public project” means a project under the control of 12 a governmental entity that is paid for in whole or in part 13 with funds of the governmental entity, including a building 14 or improvement constructed or operated jointly with any other 15 public or private agency that has an estimated total cost of 16 more than one hundred thousand dollars. A “public project” may 17 include planning, acquiring, designing, building, equipping, 18 altering, repairing, improving, or demolishing any structure or 19 appurtenance thereto, including facilities, utilities, or other 20 improvements to any real property owned by the governmental 21 entity, but excluding highways, roads, bridges, dams, or 22 stand-alone parking lots. However, a parking lot included as 23 part of the site work of a public project may be included as 24 part of a construction management contract or a design-build 25 services contract. Parking ramps and parking garages are not 26 considered to be parking lots and may be a “public project” 27 constructed utilizing alternative project delivery methods. 28 2. Notwithstanding any provision of law to the contrary, 29 the following selection methods may be utilized for a public 30 project procured through an alternative project delivery 31 process as provided in this section: 32 a. The construction management at-risk selection method 33 is a project delivery process in which a construction manager 34 contract separate from a design professional contract provides 35 -4- LSB 5831SV (1) 84 ec/nh 4/ 10

S.F. 2264 for preconstruction services, and a second construction manager 1 contract provides an at-risk obligation for the construction 2 manager to carry out construction with a contractual maximum 3 price guarantee for the public project. 4 b. The design-build qualifications-based selection method is 5 a project delivery process in which a design-build entity is 6 selected and a contract negotiated as provided in section 26.4, 7 subsection 3, to design and construct a public project for a 8 specific budget under a single contract. 9 c. The design-build best value-based selection method 10 is a project delivery process in which a design-build entity 11 is selected on the basis of both price and qualifications to 12 design and construct a public project for a specific budget 13 under a single contract. Consideration of price may refer to 14 either fees and general conditions or to total construction 15 cost. 16 d. The design-build bridging-based selection method is 17 a project delivery process in which a design professional 18 contract provides for the preparation of a design concept and 19 scope of work documents as bidding documents and for continuing 20 assistance during construction. The bidding documents shall 21 be utilized to select a design-build entity who shall enter 22 into a contract to provide for the completion of the design and 23 the construction of the contract. The design professionals 24 utilized by the design-build entity shall be independent of the 25 design professionals utilized through the design professional 26 contract. 27 3. a. Notwithstanding any provision of law to the contrary, 28 the department of administrative services and state board of 29 regents may utilize alternative project delivery selection 30 methods for the fiscal period beginning July 1, 2012, and 31 ending December 31, 2016, in coordination with the alternative 32 project delivery pilot program advisory committee, for public 33 projects. The state board of regents may select up to three 34 public projects, and the department of administrative services 35 -5- LSB 5831SV (1) 84 ec/nh 5/ 10

S.F. 2264 one public project, each fiscal year for three consecutive 1 fiscal years beginning with the fiscal year commencing July 1, 2 2012, utilizing alternative project delivery selection methods. 3 Selection of public projects during a fiscal year shall be 4 completed by December 1 of that fiscal year. 5 b. The selection of public projects pursuant to the pilot 6 program shall be subject to the following: 7 (1) To the extent practical, public projects within 8 the pilot program shall include both renovation and new 9 construction projects. 10 (2) To the extent practical, public projects within the 11 pilot program shall vary in size, complexity, scheduling, and 12 cost. 13 (3) To the extent practical, the state board of regents and 14 the department of administrative services shall each utilize 15 all permitted alternative project delivery selection methods 16 during the pilot program. 17 (4) The state board of regents shall make final 18 determinations on projects and types of alternative project 19 delivery processes for its portion of the pilot program. 20 (5) The department of administrative services shall make 21 final determinations on projects and types of alternative 22 project delivery processes for its portion of the pilot 23 program. 24 4. a. An alternative project delivery pilot program 25 advisory committee is established consisting of the following 26 members: 27 (1) One member appointed by the state board of regents. 28 (2) One member appointed by the director of the department 29 of administrative services. 30 (3) One member appointed by the Iowa state building and 31 construction trades council. 32 (4) One member appointed by the Iowa chapter of the American 33 institute of architects. 34 (5) One member appointed by the American council of 35 -6- LSB 5831SV (1) 84 ec/nh 6/ 10

S.F. 2264 engineering companies of Iowa. 1 (6) One member appointed by the Iowa chapter of the 2 design-build institute of America. 3 (7) One member appointed by the master builders of Iowa. 4 (8) One member appointed by the mechanical contractors 5 association of Iowa. 6 (9) One member appointed by the Iowa chapter of the American 7 society of landscape architects. 8 (10) One member appointed by the associated builders and 9 contractors of Iowa. 10 b. Each member of the committee shall serve until December 11 31, 2016, or until the member resigns. A vacancy on the 12 committee shall be filled in the same manner as the original 13 appointment. 14 c. The member appointed by the state board of regents and 15 the member appointed by the director of the department of 16 administrative services shall serve as co-chairpersons of the 17 committee. 18 d. Meetings of the committee may be called by the 19 chairperson or by a majority of the members. 20 e. A majority of the members of the committee constitutes a 21 quorum. Any action taken by the committee must be adopted by 22 the affirmative vote of a majority of its membership. 23 f. A member shall not vote on a matter before the committee 24 if the individual has a pecuniary, equitable, or other interest 25 in the matter or conditions exist that would interfere with the 26 member’s ability to properly discharge the member’s duties. 27 g. The duties of the advisory committee shall include all 28 of the following: 29 (1) Advise the state board of regents and the department of 30 administrative services in selecting public projects and the 31 appropriate selection methods as provided in this section. 32 (2) File a progress report with the general assembly at the 33 beginning of each legislative session. A final report shall be 34 filed by the advisory committee with the general assembly no 35 -7- LSB 5831SV (1) 84 ec/nh 7/ 10

S.F. 2264 later than January 1, 2017. The final report shall identify 1 the advantages and disadvantages of all authorized alternate 2 project delivery processes for public improvement projects 3 based on evaluation of the pilot projects. 4 Sec. 3. ALTERNATIVE PROJECT DELIVERY PILOT PROGRAM —— 5 REBUILD IOWA INFRASTRUCTURE FUND APPROPRIATION. 6 There is appropriated from the rebuild Iowa infrastructure 7 fund to the following departments and agencies for the fiscal 8 period beginning July 1, 2012, and ending June 30, 2016, the 9 following amounts, or so much thereof as is necessary, to be 10 used for the purposes designated: 11 1. DEPARTMENT OF ADMINISTRATIVE SERVICES 12 For expenses associated with administration and reporting 13 requirements of the alternative project delivery pilot program 14 as established by section 26.14B: 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000 16 2. BOARD OF REGENTS 17 For expenses associated with administration and reporting 18 requirements of the alternative project delivery pilot program 19 as established by section 26.14B: 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,000 21 EXPLANATION 22 This bill concerns public construction bidding. 23 Code section 26.4, concerning exemptions from competitive 24 bids and quotations, is amended to add design-build services 25 to the list of services exempt from competitive bidding under 26 Code chapter 26. The bill further amends the Code section to 27 establish the method by which professional services exempt 28 from competitive bidding under the Code section shall be 29 procured. The bill provides that these professional services 30 shall be procured utilizing a qualifications-based and direct 31 negotiation selection process. The bill provides that the 32 selection process shall be conducted in two stages. First, the 33 governmental entity shall use a qualifications-based approach 34 through a selection committee in selecting three entities that 35 -8- LSB 5831SV (1) 84 ec/nh 8/ 10

S.F. 2264 are qualified to perform the services to be procured. The 1 bill describes the applicable criteria in determining the best 2 qualified firms. Following selection of three firms, the 3 bill provides that the governmental entity shall enter into 4 negotiations with the highest ranked firm. If negotiations are 5 unsuccessful, the government entity can then proceed to the 6 next highest ranked firm. 7 New Code section 26.14B establishes an alternative project 8 delivery pilot program. 9 The bill defines design-build services as an alternative 10 project delivery method in which both design and construction 11 services are provided under one contract. 12 The bill authorizes the department of administrative 13 services and state board of regents to utilize alternative 14 project delivery selection methods for the fiscal period 15 beginning July 1, 2012, and ending December 31, 2016, in 16 coordination with the alternative project delivery pilot 17 program advisory committee established by the bill, for 18 public projects. The state board of regents is authorized 19 to select up to three public projects, and the department of 20 administrative services one public project during each fiscal 21 year during the pilot program period. The bill describes the 22 various methods by which a public project is to be completed 23 and provides that the method to be used shall be selected by 24 the applicable governmental entity in coordination with the 25 pilot program advisory committee. The methods are construction 26 management at-risk, design-build qualifications-based, 27 design-build best value-based, and design-build bridging-based. 28 The new Code section also establishes an alternative project 29 delivery pilot program advisory committee with 10 members which 30 shall advise the state board of regents and the department of 31 administrative services in selecting public projects and the 32 appropriate selection methods as provided in the bill. The 33 bill also requires the advisory committee to submit an annual 34 progress report to the legislature concerning the pilot program 35 -9- LSB 5831SV (1) 84 ec/nh 9/ 10