SSB 1168 (LSB 2541XC (3) 91)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON BOUSSELOT)

A BILL FOR

An Act related to guaranteed maximum price contracts for the construction of public improvements.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 26A.2, Code 2025, is amended to read as follows:
   26A.2  Authorization.
   Notwithstanding any other law to the contrary, a governmental entity shall be authorized to enter into a guaranteed maximum price contract for the construction of a public improvement pursuant to this chapter if the estimated cost of the project exceeds one hundred fifty million dollars.
    Sec. 2.  Section 26A.3, subsection 4, paragraphs a and c, Code 2025, are amended to read as follows:
   a.  After considering the statements of qualifications, the governmental entity shall issue a request for proposals to each contractor who meets the qualifications, which shall include selection and evaluation criteria. Each contractor issued a request for proposals shall be permitted to submit a proposal and each proposal submitted shall include the construction manager-at-risk’s proposed fees and costs, including the proposed costs for general conditions. The construction manager-at-risk’s proposed fees and costs shall not contain any form of contingency. The request for proposals shall be subject to the requirements of section 73A.28 and the same limitations applied to selection criteria for the request for statements of qualifications in this chapter.
   c.  The governmental entity or its representative shall select the construction manager-at-risk that submits the proposal that offers the best value lowest cost for the governmental entity based on the published selection criteria and on its ranking evaluation. The governmental entity shall first attempt to negotiate a contract with the selected construction manager-at-risk. If the governmental entity is unable to negotiate a satisfactory contract with the selected construction manager-at-risk, the governmental entity shall, formally and in writing, end negotiations with that construction manager-at-risk and proceed to negotiate with the next construction manager-at-risk in the order of the selection ranking until a contract is reached or negotiations with all ranked construction managers-at-risk end.
    Sec. 3.  Section 26A.3, subsection 5, paragraph a, unnumbered paragraph 1, Code 2025, is amended to read as follows:
   If the estimated total cost of trade contract work and materials packages is in excess of the adjusted competitive bid threshold established in section 314.1B, the construction manager-at-risk shall direct the designated licensed engineer, architect, or landscape architect to prepare plans and specifications and make the plans and specifications available. The construction manager-at-risk shall advertise for competitive bids, receive bids, prepare bid analyses, and award contracts to qualified firms on trade contract work and materials packages in accordance with all of the following:
    Sec. 4.  Section 26A.3, subsection 5, paragraph a, subparagraphs (3) and (4), Code 2025, are amended to read as follows:
   (3)  The governmental entity and the construction manager-at-risk shall participate in the bid review and evaluation process. The governmental entity and the construction manager-at-risk shall open, announce the name of the contractor submitting a bid, and file all proposals received, at the time and place specified in the notice to bidders.  All bids containing contingent amounts shall be rejected. After the bids have been opened, reviewed, and tabulated, the contracts shall be awarded to the lowest responsive, responsible bidder. All awards and bids shall be made available to the public.
   (4)  Notwithstanding any other provisions of this paragraph to the contrary, the construction manager-at-risk may self-perform work for a trade package that is below the adjusted competitive bid threshold established in section 314.1B. If a trade package is in excess of the adjusted competitive bid threshold established in section 314.1B, the construction manager-at-risk shall notify the governmental entity in writing of its intent to submit a bid proposal for a trade package. In submission of a bid, the construction manager-at-risk shall comply with the requirements of this paragraph. The governmental entity shall receive the bids, participate in, and provide oversight of all bid analyses pertinent to the award of subcontracts or rejection of bids on any trade package for which the construction manager-at-risk submits a bid to self-perform. Where the construction manager-at-risk is not the apparent low bidder, the government shall be responsible for determining whether a recommendation of award to the construction manager-at-risk is in the best interests of the project. A construction manager-at-risk shall not be required to comply with bidding requirements for general conditions as provided in the contract with the governmental entity. If the construction manager-at-risk self-performs the construction work, it shall adhere to any agreement it may have with one or more labor organizations. However, the construction manager-at-risk shall not be obligated to adhere to any terms and conditions of any labor agreement with one or more labor organizations for those trade contracts that are not self-performed by the construction manager-at-risk for the public improvement, and such terms shall be deemed void and unenforceable.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to guaranteed maximum price contracts for the construction of a public improvement.
   Under current law, a governmental entity is authorized to enter into a guaranteed maximum price contract for the construction of a public improvement. The bill allows a governmental entity to enter into such a contract only if the estimated cost of the project exceeds $150 million.
   The bill requires each proposal submitted by a construction manager-at-risk to include the proposed costs for general conditions. The proposed fees and costs may not contain a contingency. A bid containing a contingent amount must be rejected.
   The bill provides that a governmental entity or representative must select the construction manager-at-risk that submits the lowest cost proposal, based on the published selection criteria and its ranking evaluation, rather than the proposal that offers the best value. The bill strikes a requirement that the governmental entity consider whether awarding a contract to the construction manager-at-risk who was not the apparent lowest bidder is in the best interest of the project.
   If the estimated cost of trade contract work and materials packages exceeds the adjusted competitive bid threshold, the bill requires the construction manager-at-risk to direct the designated licensed engineer, architect, or landscape architect to prepare and make available plans and specifications for the public improvement project.