S.F. _____ Section 1. NEW SECTION . 26.17 Alternative project delivery 1 contracts. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Alternative project delivery contract” means either a 5 design-build or construction manager-at-risk contract. 6 b. “Construction manager-at-risk” means a sole 7 proprietorship, partnership, corporation, or other legal entity 8 that acts as a consultant to the government entity in the 9 development and design phases and then assumes the risk for 10 the construction, rehabilitation, alteration, or repair of a 11 project at the contracted fixed or guaranteed maximum price, 12 similar to a general contractor during the construction phase. 13 A project using a construction manager-at-risk does not include 14 the construction, reconstruction, or improvement of a highway, 15 bridge, or culvert. 16 c. “Design-build” means a project delivery method subject to 17 a two or three-phase selection process for which the design and 18 construction services are furnished under one contract. 19 d. “Design-build contract” means a contract between 20 a government entity and a design-builder to furnish the 21 architecture, engineering, and related services as required for 22 a given public project, and to furnish the labor, materials, 23 and other construction services for the same public project. 24 A design-build contract may be conditioned upon subsequent 25 refinements in scope and price, and may permit the government 26 entity to make changes in the scope of the project without 27 invalidating the design-build contract. 28 e. “Design-build project” means the design, construction, 29 alteration, addition, remodeling, or improvement of any 30 buildings, infrastructure, or facilities under contract with a 31 government entity. “Design-build project” does not include a 32 project for the construction, reconstruction, or improvement of 33 a highway, bridge, or culvert. 34 f. “Design-builder” means any individual, partnership, 35 -1- LSB 1510XC (4) 88 js/rn 1/ 15

S.F. _____ joint venture, or corporation subject to a best-value or 1 qualification-based selection that offers to provide or 2 provides design services and general contracting services 3 through a design-build contract in which services within 4 the scope of the practice of professional architecture or 5 engineering are performed respectively by a licensed architect 6 or licensed engineer and in which services within the scope of 7 general contracting are performed by a general contractor or 8 other legal entity that furnishes architecture or engineering 9 services and construction services either directly or through 10 subcontracts or joint ventures. 11 g. “Design criteria consultant” means a person, corporation, 12 partnership, or other legal entity that meets any of the 13 following requirements: 14 (1) Is duly licensed and authorized to practice 15 architecture within the state of Iowa. 16 (2) Has a design-build professional certification or equal 17 training to be a design criteria consultant. 18 (3) In the case of an engineered project, is duly licensed 19 as a professional engineer within the state of Iowa within 20 the discipline of the specific design-build project, and is 21 employed by or contracted by the government entity to assist 22 the government entity in the development of project design 23 criteria, requests for proposals, and any additional services 24 requested by the government entity to represent its interests 25 in relation to a project. 26 h. “Design criteria package” means the performance-oriented 27 program, scope, and specifications for the design-build project 28 sufficient to permit a design-builder to prepare a response to 29 a government entity’s request for proposals for a design-build 30 project, which may include capacity, durability, standards, 31 ingress and egress requirements, performance requirements, 32 description of the site, surveys, soil and environmental 33 information concerning the site, interior space requirements, 34 material quality standards, design and construction schedules, 35 -2- LSB 1510XC (4) 88 js/rn 2/ 15

S.F. _____ site development requirements, provisions for utilities, 1 storm water retention and disposal, parking requirements, 2 applicable governmental code requirements, preliminary designs 3 for the project or portions thereof, and other criteria for the 4 intended use of the project. 5 i. “Government entity” means the same as “governmental 6 entity” defined in section 26.2 including, for the purpose of 7 this section, the state board of regents. 8 j. “Proposal” means an offer by a design-builder in response 9 to a request for proposals to enter into a design-build 10 contract. 11 k. “Request for proposals” means the document by which 12 a government entity solicits proposals for a design-build 13 contract. 14 l. “Stipend” means a payment to a design-builder who did not 15 score the highest number of points at the conclusion of phase 16 three of the best-value selection process to defray the cost of 17 participating in phase two of the selection process, and for 18 the use of any intellectual properties obtained. 19 2. Notwithstanding any other law to the contrary, a 20 government entity shall be authorized to enter into an 21 alternative project delivery contract. 22 3. Construction manager-at-risk contracts. 23 a. A government entity shall publicly disclose its intent to 24 use the construction manager-at-risk method and its selection 25 criteria at least one week prior to publishing the request 26 for proposals and request for statements of qualifications. 27 The government entity shall publish its request for proposals 28 and statements of qualifications. Before or concurrently 29 with selecting a construction manager-at-risk, the government 30 entity shall select or designate an engineer or architect 31 who shall prepare the construction documents for the project 32 and who shall comply with all state laws, as applicable. If 33 the engineer or architect is not a full-time employee of the 34 government entity, the government entity shall select the 35 -3- LSB 1510XC (4) 88 js/rn 3/ 15

S.F. _____ engineer or architect on a basis of demonstrated competence and 1 qualifications. The government entity’s engineer or architect 2 for a project may not serve, alone or in combination with 3 another, as the construction manager-at-risk. This paragraph 4 does not prohibit a government entity’s engineer or architect 5 from providing customary construction-phase services under 6 the engineer’s or architect’s original professional service 7 agreement in accordance with applicable licensing laws. 8 b. The government entity may provide or contract for, 9 independently of the construction manager-at-risk, inspection 10 services, testing of construction materials, engineering, and 11 verification of testing services necessary for acceptance of 12 the project by the government entity. 13 c. The government entity shall select the construction 14 manager-at-risk in a two-phase process. 15 (1) Phase one. The government entity shall prepare a 16 request for statements of qualifications for the first phase. 17 The request shall include general information on the project 18 site, project scope, schedule, selection criteria, the time 19 and place for receipt of statements of qualifications, and 20 other information that may assist the government entity in its 21 selection of a construction manager-at-risk. The selection 22 criteria may include the construction manager-at-risk’s 23 experience, past performance, safety record, proposed personnel 24 and methodology, and other appropriate factors that demonstrate 25 the capability of the construction manager-at-risk. The 26 government entity shall not request fees or prices in phase 27 one. 28 (2) Phase two. In phase two, the government entity 29 shall issue a request for proposals. The government entity 30 may request that no more than five nor fewer than two 31 construction managers-at-risk, selected solely on the basis 32 of qualifications, provide additional information, including 33 the construction manager-at-risk’s project proposal, proposed 34 fee, and its price for fulfilling the general conditions. 35 -4- LSB 1510XC (4) 88 js/rn 4/ 15

S.F. _____ Qualifications shall account for a minimum of forty percent 1 of the evaluation. Cost shall account for a maximum of sixty 2 percent of the evaluation. 3 d. For each phase, the government entity shall receive, 4 publicly open, and read aloud the names of the construction 5 managers submitting proposals or statements of qualifications, 6 respectively. Within forty-five days after the date of opening 7 the proposals or statements of qualification submissions, the 8 government entity or its representative shall evaluate and rank 9 each proposal or statement of qualifications submission in 10 relation to the criteria set forth in the applicable request. 11 e. The government entity or its representative shall 12 select the construction manager-at-risk that submits the 13 proposal that offers the best value for the government entity 14 based on the published selection criteria and on its ranking 15 evaluation. The government entity or its representative 16 shall first attempt to negotiate a contract with the selected 17 construction manager-at-risk. If the government entity or its 18 representative is unable to negotiate a satisfactory contract 19 with the selected construction manager-at-risk, the government 20 entity or its representative shall, formally and in writing, 21 end negotiations with that construction manager-at-risk and 22 proceed to negotiate with the next construction manager-at-risk 23 in the order of the selection ranking until a contract 24 is reached or negotiations with all ranked construction 25 managers-at-risk end. 26 f. The selected construction manager-at-risk shall publicly 27 advertise and receive bids or proposals from trade contractors 28 or subcontractors for the performance of all major elements of 29 the work other than the minor work that may be included in the 30 general conditions. A construction manager-at-risk submits 31 its sealed bid or sealed proposal in the same manner as all 32 other trade contractors or subcontractors. All sealed bids 33 or proposals shall be submitted at the time and location as 34 specified in the advertisement for bids or proposals and shall 35 -5- LSB 1510XC (4) 88 js/rn 5/ 15

S.F. _____ be publicly opened and the identity of each bidder and their 1 bid amount shall be read aloud. 2 g. The construction manager-at-risk and the government 3 entity or its representative shall review all trade contractor, 4 subcontractor, or construction manager-at-risk bids or 5 proposals in a manner that does not disclose the contents of 6 the bid or proposal during the selection process to a person 7 not employed by the construction manager-at-risk, engineer, 8 architect, or government entity involved with the project. If 9 the construction manager-at-risk submitted bids or proposals, 10 the government entity shall determine if the construction 11 manager-at-risk’s bid or proposal offers the best value for the 12 government entity. After all proposals have been evaluated and 13 clarified, the award of all contracts shall be made public. 14 h. If the construction manager-at-risk reviews, evaluates, 15 and recommends to the government entity a bid or proposal from 16 a trade contractor or subcontractor but the government entity 17 requires another bid or proposal to be accepted, the government 18 entity shall compensate the construction manager-at-risk by 19 a change in price, time, or guaranteed maximum cost for any 20 additional cost and risk that the construction manager-at-risk 21 may incur because of the government entity’s requirement that 22 another bid or proposal be accepted. 23 i. If a selected trade contractor materially defaults in the 24 performance of its work or fails to execute a contract with a 25 construction manager-at-risk after being selected in accordance 26 with this subsection, the construction manager-at-risk may 27 itself, without advertising, fulfill the contract requirements 28 or select a replacement trade contractor to fulfill the 29 contract requirements. 30 4. In soliciting proposals for a design-build contract, 31 a government entity shall determine the scope and level of 32 detail required to permit design-builders to submit proposals 33 in accordance with the request for proposals given the nature 34 of the project. 35 -6- LSB 1510XC (4) 88 js/rn 6/ 15

S.F. _____ 5. In soliciting proposals for a design-build contract, a 1 design criteria consultant shall be employed or retained by 2 the government entity to assist in preparation of the design 3 criteria package and request for proposals and perform any 4 other additional service necessary to the project. The design 5 criteria consultant may also evaluate construction regarding 6 adherence of the design criteria. The design criteria 7 consultant may not submit a proposal or furnish design or 8 construction services for the design-build contract for which 9 its services were sought. 10 6. A government entity shall publicly disclose its intent to 11 solicit proposals for a design-build contract and its project 12 design criteria package in the same manner that it would post 13 notice for the competitive bidding process in section 26.3. 14 7. In soliciting proposals for a design-build contract, a 15 government entity shall establish in the request for proposals 16 a time, place, and other specific instructions for the receipt 17 of proposals. Proposals not submitted in strict accordance 18 with the instructions may be subject to rejection. Minor 19 irregularities may be waived by the government entity. 20 8. A request for proposals shall be prepared for each 21 design-build contract and shall contain, at minimum, the 22 following elements: 23 a. The procedures to be followed for submitting proposals, 24 the criteria for evaluating proposals and their relative 25 weight, and the procedure for making awards. 26 b. The proposed terms and conditions for the design-build 27 contract, if available. 28 c. The design criteria package. 29 d. A description of the drawings, specifications, or other 30 information to be submitted with the proposal, with guidance 31 as to the form and level of completeness of the drawings, 32 specifications, or other information that will be acceptable. 33 e. A schedule for planned commencement and completion of the 34 design-build contract, if available. 35 -7- LSB 1510XC (4) 88 js/rn 7/ 15

S.F. _____ f. Budget limits for the design-build contract, if any. 1 g. Requirements including any available ratings for 2 performance bonds, payment bonds, and insurance, if any. 3 h. The amount of the stipend, if any, that will be 4 available. 5 i. Any other information that the government entity in 6 its discretion chooses to request including but not limited 7 to surveys, soil reports, drawings of existing structures, 8 environmental studies, photographs, references to public 9 records, or affirmative action and minority business enterprise 10 requirements consistent with state and federal law. 11 9. A government entity seeking to enter a design-build 12 contract shall solicit design-build proposals either by 13 using a three-phase, best-value process or a two-phase, 14 qualifications-based process. 15 a. A three-phase, best-value selection process shall be 16 conducted as follows: 17 (1) Phase one. Request for statements of qualifications of 18 design-builders. 19 (a) The government entity shall review submitted statements 20 of the qualifications and assign points to each in accordance 21 with this section and as set out in the instructions of the 22 request for qualifications. 23 (b) All design-builders shall submit a statement of 24 qualifications that shall include but not be limited to: 25 (i) Demonstrated ability to perform projects comparable in 26 design, scope, and complexity. 27 (ii) References of owners for whom design-build projects, 28 construction projects, or design projects have been performed. 29 (iii) Qualifications of personnel who will manage the 30 design and construction aspects of the project. 31 (iv) The names and qualifications of the primary design 32 consultants and the primary trade contractors with whom the 33 design-builder proposes to subcontract or joint venture. The 34 design-builder may not replace an identified contractor, 35 -8- LSB 1510XC (4) 88 js/rn 8/ 15

S.F. _____ subcontractor, design consultant, or subconsultant without the 1 written approval of the government entity. 2 (c) The government entity shall evaluate the qualifications 3 of all the design-builders who submitted statements of 4 qualifications in accordance with the instructions of the 5 request for qualifications. Qualified design-builders 6 selected by the government entity may proceed to phase two 7 of the selection process. The evaluation shall narrow the 8 number of qualified design-builders submitting statements of 9 qualifications to not fewer than two nor more than five. Under 10 no circumstances shall price or fees be a part of the request 11 for statements of qualifications criteria. Design-builders may 12 be interviewed in either phase one or phase two of the process. 13 Points assigned in phase one of the evaluation process shall 14 not carry forward to phase two or phase three of the process. 15 All qualified design-builders shall be ranked on points given 16 in phases two and three only. 17 (d) Once no fewer than two and no more than five qualified 18 design-builders have been selected, the government entity shall 19 issue its request for proposals and provide the design-builders 20 a specified amount of time in which to concurrently assemble 21 phase two and phase three proposals. 22 (2) Phase two. Solicitation of technical proposals, 23 including conceptual design for the project. 24 (a) A design-builder shall submit its design for the project 25 to the level of detail required for the proposal along with 26 such other information the government entity requests, which 27 may include a schedule, qualifications, and experience. 28 (b) The ability of the design-builder to meet the schedule 29 for completing a project as specified by the government entity 30 may be considered as an element of evaluation in phase two. 31 (c) Under no circumstances shall the design proposal 32 contain any reference to the cost of the proposal. 33 (d) The submitted designs shall be evaluated and assigned 34 points in accordance with the requirements of the request for 35 -9- LSB 1510XC (4) 88 js/rn 9/ 15

S.F. _____ proposals. Phase two shall account for not less than forty 1 percent and no more than sixty percent of the total point score 2 as specified in the request for proposals. 3 (3) Phase three. Proposal of construction costs. 4 (a) The government entity shall invite the selected 5 design-builders to participate in phase three. The 6 design-builders shall provide a fixed cost of design and 7 construction. The proposal shall be accompanied by bid 8 security and any other items, such as statements of minority 9 participation, as required by the request for proposals. 10 (b) Cost proposals shall be submitted in accordance with 11 the instructions in the request for proposals. The government 12 entity shall reject any proposal that is not submitted within 13 the required time frame. Phase three shall account for not 14 less than forty percent and no more than sixty percent of the 15 total point score as specified in the request for proposals. 16 (c) Proposals for phase two and phase three shall be 17 submitted concurrently at the time and place specified in the 18 request for proposals, but in separate envelopes or other means 19 of submission. The phase three cost proposals shall be opened 20 and read aloud only after phase two design proposals have been 21 evaluated and assigned points, ranked in order, and posted. 22 Cost proposals shall be opened and read aloud at the time and 23 place specified in the request for proposals. At the same time 24 and place, the evaluation team shall make public its scoring 25 of phase two. Cost proposals shall be evaluated in accordance 26 with the requirements of the request for proposals. 27 (d) If the government entity determines that it is not in 28 the best interest of the government entity to proceed with the 29 project pursuant to the proposal offered by the design-builder 30 with the highest total number of points, the government entity 31 shall reject all proposals. In this event, all design-builders 32 with lower point totals in phases two and three shall receive 33 a stipend and the responsive design-builder with the highest 34 point total shall receive an amount equal to two times the 35 -10- LSB 1510XC (4) 88 js/rn 10/ 15

S.F. _____ stipend. If the government entity decides to award the 1 project, the responsive design-builder with the highest point 2 total shall be awarded the contract. 3 (e) As an inducement to qualified design-builders, the 4 government entity shall pay a stipend, the amount of which 5 shall be established in the request for proposals, to each 6 design-builder who submitted a proposal but was not accepted. 7 Such stipend shall be no less than one-half of one percent 8 of the total project budget. Upon payment of the stipend to 9 such a design-builder, the government entity shall acquire 10 a nonexclusive right to use the design submitted by the 11 design-builder, and the design-builder shall have no further 12 liability for the use of the design by the government entity in 13 any manner. If the design-builder desires to retain all rights 14 and interests in the design proposed, the design-builder shall 15 forfeit the stipend. 16 b. A two-phase, qualifications-based selection process shall 17 be conducted as follows: 18 (1) Phase one. Request for statements of qualifications of 19 design-builders. 20 (a) The government entity must prepare a request for 21 statements of qualifications. The request shall include 22 general information on the project site, project scope, 23 schedule, selection criteria, the time and place for receipt 24 of statements of qualifications, and other information 25 that may assist the government entity in its selection of a 26 design-builder. 27 (b) The government entity shall state the selection 28 criteria in the request for statements of qualifications. The 29 selection criteria may include the design-builder’s experience, 30 past performance, safety record, proposed personnel and 31 methodology, and other appropriate factors that demonstrate the 32 capability of the design-builder. 33 (c) Selection criteria will be ranked and assigned points 34 for each category. Point assignments shall be included as a 35 -11- LSB 1510XC (4) 88 js/rn 11/ 15

S.F. _____ part of the request for statements of qualifications. 1 (d) The government entity shall not request fees or prices 2 in phase one. Any submissions with disclosed fees or prices 3 will be disqualified and removed from consideration. 4 (2) Phase two. Negotiations. 5 (a) Negotiations shall be conducted, beginning with the 6 design-builder ranked first. If a contract satisfactory 7 and advantageous to the government entity can be negotiated 8 at a price considered fair and reasonable and pursuant to 9 contractual terms and conditions acceptable to the government 10 entity, the award shall be made to that design-builder. 11 (b) In the event that a contract cannot be negotiated 12 with the design-builder ranked first, negotiations with that 13 design-builder shall be formally terminated. The government 14 entity shall conduct negotiations with the next-highest-ranked 15 design-builder and continue this process until a contract can 16 be negotiated that meets the terms of subparagraph division (a) 17 of this subparagraph. 18 Sec. 2. Section 262.34, subsection 1, Code 2019, is amended 19 to read as follows: 20 1. a. When the estimated cost of construction, repairs, 21 or improvement of buildings or grounds under charge of the 22 state board of regents, including construction, renovation, or 23 repairs by a private party of a property to be lease-purchased 24 by the board , exceeds one hundred thousand dollars, the board 25 shall advertise for bids for the contemplated improvement or 26 construction and shall let the work to the lowest responsible 27 bidder. However, if in the judgment of the board bids received 28 are not acceptable, the board may reject all bids and proceed 29 with the construction, repair, or improvement by a method as 30 the board may determine. All plans and specifications for 31 repairs or construction, together with bids on the plans or 32 specifications, shall be filed by the board and be open for 33 public inspection. All bids submitted under this section shall 34 be accompanied by a deposit of money, a certified check, or a 35 -12- LSB 1510XC (4) 88 js/rn 12/ 15

S.F. _____ credit union certified share draft in an amount as the board 1 may prescribe. 2 b. The state board of regents may proceed with a 3 construction, repair, or improvement by using an alternative 4 project delivery contract in accordance with the provisions of 5 section 26.17. 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 Currently, most government entities must use a competitive 10 bidding process for a construction project when that project 11 is estimated to cost at least as much as a threshold defined 12 in Code section 26.3. This bill allows a government entity to 13 use an alternative project delivery contract in circumstances 14 that normally require the government entity to use competitive 15 bidding procedures. The bill defines a government entity to 16 include the state board of regents. 17 The bill creates two types of alternative project delivery 18 contracts, each with specified requirements. The first 19 alternative is the construction manager-at-risk contract. If a 20 government entity opts to use a construction manager-at-risk 21 contract, the government entity shall select an engineer 22 or architect to prepare the construction documents for 23 the project. That engineer or architect cannot serve as 24 the construction manager-at-risk. The government entity 25 shall use a two-phase process in selecting the construction 26 manager-at-risk. The first phase shall include a request for 27 qualifications and the government entity’s selection criteria. 28 The government entity may select at least two but no more 29 than five of the construction managers-at-risk who submitted 30 qualifications to participate in the second phase, based solely 31 on the qualifications of those construction managers-at-risk. 32 In phase two, the construction managers-at-risk that the 33 government entity selects will provide additional information, 34 including the project proposal, costs, and fees. The 35 -13- LSB 1510XC (4) 88 js/rn 13/ 15

S.F. _____ government entity shall rank the construction managers-at-risk 1 in a manner in which qualifications account for at least 40 2 percent of the evaluation and cost accounts for no more than 60 3 percent of the evaluation. The government entity shall select 4 the construction manager-at-risk that offers the best value 5 based on the evaluation criteria. If the two parties do not 6 reach an agreement, the government entity shall proceed with 7 the next highest-ranked construction manager-at-risk and follow 8 this process until the government entity reaches a contract 9 with a construction manager-at-risk. The selected construction 10 manager-at-risk shall advertise for and receive sealed bids 11 for proposals from trade contractors or subcontractors and 12 publicly review those bids with the government entity in a 13 manner that does not disclose the contents of the bid or 14 proposal during the selection process to a person not employed 15 by the construction manager-at-risk, engineer, architect, or 16 government entity involved with the project. The construction 17 manager-at-risk will select a bid in consultation with the 18 government entity. 19 The second type of alternative project delivery method is 20 the design-build contract, which can select design-builders in 21 either a three-phase or two-phase process. In the three-phase 22 process, the government entity shall first request statements 23 of qualifications from design-builders. The government 24 entity shall select at least two but no more than five 25 qualified design-builders to move on to phases two and three. 26 In the second phase, the government entity shall solicit 27 technical proposals and conceptual designs from the remaining 28 design-builders. The government entity shall pay a stipend 29 to any design-builder that participates in phase two but 30 whose contract the entity does not select. The third phase 31 involves the design-builders submitting construction costs. 32 The government entity shall award points for each proposal. If 33 the government entity chooses to award a contract, it shall 34 award the contract to the design-builder with the highest point 35 -14- LSB 1510XC (4) 88 js/rn 14/ 15

S.F. _____ total. 1 If the government entity uses the two-phase process, the 2 government entity will request qualifications and include 3 its selection criteria. The government entity will rank the 4 qualifications of a design-builder. In the second phase, the 5 government entity shall negotiate with the highest-ranked 6 design-builder. If the two parties cannot agree to a contract 7 with terms and conditions acceptable to the government 8 entity, those negotiations shall be formally terminated 9 and the government entity shall negotiate with the next 10 highest-ranked design-builder. That process shall continue 11 until the government entity can negotiate a contract with a 12 design-builder with terms and conditions acceptable to the 13 government entity. 14 -15- LSB 1510XC (4) 88 js/rn 15/ 15