Senate File 183 - Introduced SENATE FILE 183 BY COMMITTEE ON STATE GOVERNMENT (SUCCESSOR TO SSB 1018) A BILL FOR An Act relating to a construction manager-at-risk commercial 1 construction alternative delivery method and prohibiting 2 certain other alternative delivery methods in the public 3 sector and including effective date and applicability 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1182SV (1) 89 jda/rn
S.F. 183 DIVISION I 1 PUBLIC CONSTRUCTION BIDDING REQUIREMENTS 2 Section 1. Section 26.4, Code 2021, is amended to read as 3 follows: 4 26.4 Exemptions from competitive bids and quotations 5 Architectural and engineering services —— exemptions —— 6 prohibitions . 7 1. Architectural, landscape architectural, or engineering 8 design services procured for a public improvement are not 9 subject to sections 26.3 and 26.14 . 10 2. Fee-based selection of an architect, landscape 11 architect, or engineer for a public improvement shall be 12 prohibited. 13 Sec. 2. Section 262.34, Code 2021, is amended by adding the 14 following new subsection: 15 NEW SUBSECTION . 6. Notwithstanding any provision of this 16 chapter to the contrary, the state board of regents shall 17 not be authorized to enter into a design-build contract to 18 construct, repair, or improve buildings or grounds. For 19 purposes of this subsection, “design-build contract” means 20 a single contract providing for both design services and 21 construction services that may include maintenance, operations, 22 preconstruction, and other related services. 23 Sec. 3. EFFECTIVE DATE. The following, being deemed of 24 immediate importance, takes effect upon enactment: 25 The section of this division of this Act amending section 26 262.34. 27 Sec. 4. APPLICABILITY. The section of this division of 28 this Act amending section 262.34 does not apply to projects 29 using design-build if an architect has entered into a contract 30 to work with the state board of regents on a project using 31 design-build prior to the effective date of the section of this 32 division of this Act amending section 262.34. 33 DIVISION II 34 GUARANTEED MAXIMUM PRICE CONTRACTS 35 -1- LSB 1182SV (1) 89 jda/rn 1/ 11
S.F. 183 Sec. 5. NEW SECTION . 26A.1 Definitions. 1 As used in this chapter, unless the context clearly 2 indicates otherwise: 3 1. “Construction manager-at-risk” means a sole 4 proprietorship, partnership, corporation, or other legal entity 5 that assumes the risk for the construction, rehabilitation, 6 alteration, or repair of a project and provides consultant 7 services to the government entity in the development and design 8 phases, working collaboratively with the design professionals 9 involved. 10 2. “General conditions” means work which will not be 11 incorporated into the completed project. This work includes 12 but is not limited to job site cleaning and temporary 13 structures. 14 3. Governmental entity” means the state, political 15 subdivisions of the state, public school corporations, and all 16 officers, boards, or commissions empowered by law to enter 17 into contracts for the construction of public improvements, 18 including the state board of regents. 19 4. “Guaranteed maximum price contract” means the agreed 20 to fixed or guaranteed maximum price pursuant to a contract 21 entered into by the construction manager-at-risk and the 22 governmental entity. 23 5. “Public improvement” means as defined in section 26.2. 24 6. “Repair or maintenance work” means as defined in section 25 26.2. 26 7. “Self-perform” means work that is executed by 27 the construction manager-at-risk without the use of a 28 subcontractor. Electrical, mechanical, fire suppression, and 29 plumbing work may not be self-performed. 30 Sec. 6. NEW SECTION . 26A.2 Authorization. 31 Notwithstanding any other law to the contrary, a 32 governmental entity shall be authorized to enter into a 33 guaranteed maximum price contract for the construction of a 34 public improvement pursuant to this chapter. 35 -2- LSB 1182SV (1) 89 jda/rn 2/ 11
S.F. 183 Sec. 7. NEW SECTION . 26A.3 Guaranteed maximum price 1 contract —— process. 2 1. A governmental entity shall publicly disclose the 3 governmental entity’s intent to enter into a guaranteed 4 maximum price contract and the governmental entity’s selection 5 criteria at least fourteen days prior to publishing a request 6 for statements of qualifications. Public disclosure shall 7 be in a relevant contractor plan room service with statewide 8 circulation, a relevant construction lead generating service 9 with statewide circulation, and on an internet site sponsored 10 by either a governmental entity or a statewide association that 11 represents the governmental entity. 12 2. The governmental entity shall select or designate an 13 engineer licensed under chapter 542B, a landscape architect 14 licensed under chapter 544B, or an architect licensed 15 under chapter 544A by utilizing a quality-based selection 16 process. Fee-based selection of the engineer, landscape 17 architect, or architect shall be prohibited. The engineer, 18 landscape architect, or architect selected or designated by 19 the government entity under this subsection shall have the 20 responsibility of preparing construction documents for the 21 project and shall review the construction for conformance with 22 design intent. 23 3. a. (1) The governmental entity shall prepare a request 24 for statements of qualifications. The request shall include 25 general information on the project site, project scope, 26 schedule, selection criteria, and the time and place for 27 receipt of statements of qualifications. Selection criteria 28 and general information included in the request for statements 29 of qualifications may be developed in coordination with 30 the engineer, landscape architect, or architect selected or 31 designated by the governmental entity as provided under this 32 section. 33 (2) Selection criteria may include the contractor’s 34 experience undertaking projects of similar size and scope 35 -3- LSB 1182SV (1) 89 jda/rn 3/ 11
S.F. 183 in either the public or private sector, past performance, 1 safety record, proposed personnel, and proposed methodology. 2 Selection criteria shall include experience in both the public 3 and the private sector. Selection criteria shall not include 4 specific delivery methods, including guaranteed maximum price 5 projects. In addition, selection criteria shall not include 6 training, testing, or other certifications that may only 7 be obtained through organized labor affiliations or other 8 limited-membership organizations. 9 (3) A request for statements of qualifications under this 10 subsection shall be subject to the requirements of section 11 73A.28. In addition, a governmental entity shall not by 12 ordinance, rule, or any other action relating to the request 13 for qualifications stipulate criteria that would directly 14 or indirectly restrict the selection of a construction 15 manager-at-risk to any predetermined class of providers based 16 on labor organization affiliation or any other criteria other 17 than that allowed pursuant to this paragraph. 18 b. The request for statements of qualifications shall be 19 posted not less than thirteen and not more than forty-five days 20 before the date for response in a relevant contractor plan room 21 service with statewide circulation, in a relevant construction 22 lead generating service with statewide circulation, and on an 23 internet site sponsored by either a governmental entity or a 24 statewide association that represents the governmental entity. 25 If circumstances beyond the control of the governmental 26 entity require postponement and there are no changes to the 27 project’s contract documents, a notice of the revised date 28 shall be posted not less than four and not more than forty-five 29 days before the revised date for answering the request for 30 proposals and statements of qualifications in a relevant 31 contractor plan room service with statewide circulation, in a 32 relevant construction lead generating service with statewide 33 circulation, and on an internet site sponsored by either a 34 government entity or a statewide association that represents 35 -4- LSB 1182SV (1) 89 jda/rn 4/ 11
S.F. 183 the governmental entity. 1 c. The governmental entity shall receive, publicly open, and 2 read aloud the names of the contractors submitting statements 3 of qualifications. Within forty-five days after the date of 4 opening the statements of qualifications submissions, the 5 governmental entity shall evaluate each proposal or statement 6 of qualifications submission in relation to the criteria set 7 forth in the request. 8 4. a. After considering the statements of qualifications, 9 the governmental entity shall issue a request for proposals 10 to each contractor who meets the qualifications which shall 11 include selection and evaluation criteria. Each contractor 12 issued a request for proposals shall be permitted to submit 13 a proposal and each proposal submitted shall include the 14 construction manager-at-risk’s proposed fees. The request 15 for proposals shall be subject to the requirements of section 16 73A.28 and the same limitations applied to selection criteria 17 for the request for statements of qualifications in this 18 chapter. 19 b. The governmental entity shall receive, publicly open, and 20 read aloud the names of the contractors submitting proposals. 21 Within forty-five days after the date of opening the proposals, 22 the governmental entity shall evaluate and rank each proposal 23 in relation to the criteria set forth in the applicable 24 request. 25 c. The governmental entity or its representative shall 26 select the construction manager-at-risk that submits the 27 proposal that offers the best value for the governmental 28 entity based on the published selection criteria and on 29 its ranking evaluation. The governmental entity shall 30 first attempt to negotiate a contract with the selected 31 construction manager-at-risk. If the governmental entity 32 is unable to negotiate a satisfactory contract with the 33 selected construction manager-at-risk, the governmental entity 34 shall, formally and in writing, end negotiations with that 35 -5- LSB 1182SV (1) 89 jda/rn 5/ 11
S.F. 183 construction manager-at-risk and proceed to negotiate with the 1 next construction manager-at-risk in the order of the selection 2 ranking until a contract is reached or negotiations with all 3 ranked construction managers-at-risk end. 4 d. The governmental entity shall make available to the 5 public the final scoring and ranking evaluation of the request 6 for proposals received. 7 5. a. If the estimated total cost of trade contract work 8 and materials packages is in excess of the adjusted competitive 9 bid threshold established in section 314.1B, the construction 10 manager-at-risk shall advertise for competitive bids, receive 11 bids, prepare bid analyses, and award contracts to qualified 12 firms on trade contract work and materials packages in 13 accordance with all of the following: 14 (1) The construction manager-at-risk shall prepare a 15 request for statements of qualifications. The request shall 16 include general information on the project site, project 17 scope, schedule, selection criteria, and the time and place 18 for receipt of statements of qualifications. The construction 19 manager-at-risk shall provide public notice of the request for 20 statements of qualifications in a relevant contractor plan room 21 service with statewide circulation, a relevant construction 22 lead generating service with statewide circulation, and on an 23 internet site sponsored by either a governmental entity or a 24 statewide association that represents the governmental entity. 25 The request for statements of qualifications shall be posted 26 not less than thirteen and not more than forty-five days before 27 the date for response. 28 (2) (a) The construction manager-at-risk shall utilize 29 objective prequalification criteria in the request for 30 statements of qualifications. All firms who meet the 31 objective prequalification criteria as a qualified firm 32 shall be allowed to submit a bid for the relevant trade 33 contract work and materials package. Upon determining which 34 firms meet the prequalification criteria, the construction 35 -6- LSB 1182SV (1) 89 jda/rn 6/ 11
S.F. 183 manager-at-risk shall notify all firms who responded to the 1 request for qualifications whether they successfully meet the 2 prequalification criteria. The notification shall include a 3 list of all firms who were deemed to have successfully met the 4 prequalification criteria. Notification shall be given no 5 less than fifteen days prior to the subcontractor bids being 6 due. Subcontractors who failed to meet the prequalification 7 standards shall also be provided with information regarding 8 which prequalification criteria were not met. In addition, 9 a firm that is prequalified with the state department of 10 transportation pursuant to section 314.1 shall be considered 11 to meet the objective prequalification criteria as a qualified 12 firm and shall be allowed to submit a bid for purposes of work 13 related to parking lots, streets, site development, or bridge 14 structure components. 15 (b) Prequalification criteria shall be limited to a 16 firm’s experience as a contractor, capacity of key personnel, 17 technical competence, capability to perform, the past 18 performance of the firm and the firm’s employees to include 19 the firm’s safety record and compliance with state and federal 20 law, and availability to and familiarity with the location of 21 the project subject to bid. Prequalification criteria shall 22 be reasonably and materially related to the relevant trade 23 contract work and materials package. The prequalification 24 criteria shall not include training, testing, or other 25 certifications that may only be obtained through organized 26 labor affiliated organizations or other limited-membership 27 organizations. 28 (3) The governmental entity and the construction 29 manager-at-risk shall participate in the bid review and 30 evaluation process. The governmental entity and the 31 construction manager-at-risk shall open, announce the name 32 of the contractor submitting a bid, and file all proposals 33 received, at the time and place specified in the notice to 34 bidders. After the bids have been opened, reviewed, and 35 -7- LSB 1182SV (1) 89 jda/rn 7/ 11
S.F. 183 tabulated, the contracts shall be awarded to the lowest 1 responsive, responsible bidder. All awards and bids shall be 2 made available to the public. 3 (4) Notwithstanding any other provisions of this paragraph 4 to the contrary, the construction manager-at-risk may 5 self-perform work for a trade package that is below the 6 adjusted competitive bid threshold established in section 7 314.1B. If a trade package is in excess of the adjusted 8 competitive bid threshold established in section 314.1B, the 9 construction manager-at-risk shall notify the governmental 10 entity in writing of its intent to submit a bid proposal for 11 a trade package. In submission of a bid, the construction 12 manager-at-risk shall comply with the requirements of this 13 paragraph. The governmental entity shall receive the bids, 14 participate in, and provide oversight of all bid analyses 15 pertinent to the award of subcontracts or rejection of bids on 16 any trade package for which the construction manager-at-risk 17 submits a bid to self-perform. Where the construction 18 manager-at-risk is not the apparent low bidder, the government 19 shall be responsible for determining whether a recommendation 20 of award to the construction manager-at-risk is in the best 21 interests of the project. A construction manager-at-risk shall 22 not be required to comply with bidding requirements for general 23 conditions as provided in the contract with the governmental 24 entity. If the construction manager-at-risk self-performs 25 the construction work, it shall adhere to any agreement it 26 may have with one or more labor organizations. However, the 27 construction manager-at-risk shall not be obligated to adhere 28 to any terms and conditions of any labor agreement with one or 29 more labor organizations for those trade contracts that are 30 not self-performed by the construction manager-at-risk for the 31 public improvement, and such terms shall be deemed void and 32 unenforceable. 33 b. If a selected trade contractor materially defaults in 34 the performance of its work or fails to execute a contract, 35 -8- LSB 1182SV (1) 89 jda/rn 8/ 11
S.F. 183 the construction manager-at-risk may, without advertising, 1 fulfill the contract requirements or select a replacement trade 2 contractor to fulfill the contract requirements. 3 Sec. 8. NEW SECTION . 26A.4 Prohibited contracts. 4 1. Notwithstanding any other provision of law to the 5 contrary, a governmental entity shall not be authorized 6 to enter into a design-build contract for the construction 7 of a public improvement. For purposes of this subsection, 8 “design-build contract” means a single contract providing for 9 both design services and construction services that may include 10 maintenance, operations, preconstruction, and other related 11 services. 12 2. A governmental entity shall not be authorized to 13 enter into a guaranteed maximum price contract for public 14 improvements relating to highway, bridge, or culvert 15 construction. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill concerns public construction and improvement 20 contracts. 21 DIVISION I —— PUBLIC CONSTRUCTION BIDDING REQUIREMENTS. 22 Code section 26.4, relating to architectural and engineering 23 services, is amended to prohibit fee-based selection of an 24 architect, landscape architect, or engineer for a public 25 improvement. 26 Code section 262.34 is amended to prohibit the state board 27 of regents from entering into a design-build contract to 28 construct, repair, or improve buildings or grounds. This 29 provision takes effect upon enactment. However, the provision 30 does not apply if an architect entered into a design-build 31 contract with the state board of regents prior to the effective 32 date of the provision. 33 DIVISION II —— GUARANTEED MAXIMUM PRICE CONTRACTS. This 34 division allows a governmental entity to use a guaranteed 35 -9- LSB 1182SV (1) 89 jda/rn 9/ 11
S.F. 183 maximum price contract for purposes of public improvement 1 contracts. 2 New Code section 26A.1 defines, among other terms, 3 “construction manager-at-risk”, “governmental entity”, 4 “guaranteed maximum price contract” and “public improvement”. 5 “Guaranteed maximum price contract” is defined to mean the 6 agreed to fixed or guaranteed maximum price pursuant to a 7 contract entered into by the construction manager-at-risk and 8 the governmental entity. “Construction manager-at-risk” means 9 a legal entity that assumes the risk for the construction, 10 rehabilitation, alteration, or repair of a project and 11 provides consultant services to the governmental entity in the 12 development and design phases, working collaboratively with 13 the design professionals involved. “Governmental entity” is 14 defined to mean the state, political subdivisions of the state, 15 and public school corporations, and is specifically defined to 16 include the state board of regents. “Public improvement” is 17 defined to mean the same as for purposes of Code chapter 26 18 governing public construction bidding. 19 New Code section 26A.2 authorizes a governmental entity to 20 enter into a guaranteed maximum price contract for a public 21 improvement, notwithstanding any provision of law to the 22 contrary. 23 New Code section 26A.3 establishes the process for entering 24 into a guaranteed maximum price contract. The new Code section 25 provides procedures governing public disclosure of an intent to 26 enter into a guaranteed maximum price contract, selection of 27 an engineer, landscape architect, or architect, a request for 28 qualifications process, a request for proposals and selection 29 process, and selection of trade contractors and material 30 packages. 31 New Code section 26A.4 prohibits a governmental entity from 32 entering into a design-build contract for the construction of a 33 public improvement and entering into a guaranteed maximum price 34 contract for public improvements relating to highway and bridge 35 -10- LSB 1182SV (1) 89 jda/rn 10/ 11
S.F. 183 construction. 1 -11- LSB 1182SV (1) 89 jda/rn 11/ 11