Senate Study Bill 1213 - IntroducedA Bill ForAn Act 1relating to alternative project delivery contract
2methods for government entities.
1   Section 1.  NEW SECTION.  26.17  Alternative project delivery
   31.  As used in this section, unless the context otherwise
   5a.  “Alternative project delivery contract” means either a
6design-build or construction manager-at-risk contract.
   7b.  “Construction manager-at-risk” means a sole
8proprietorship, partnership, corporation, or other legal entity
9that acts as a consultant to the government entity in the
10development and design phases and then assumes the risk for
11the construction, rehabilitation, alteration, or repair of a
12project at the contracted fixed or guaranteed maximum price,
13similar to a general contractor during the construction phase.
14A project using a construction manager-at-risk does not include
15the construction, reconstruction, or improvement of a highway,
16bridge, or culvert.
   17c.  “Design-build” means a project delivery method subject to
18a two or three-phase selection process for which the design and
19construction services are furnished under one contract.
   20d.  “Design-build contract” means a contract between
21a government entity and a design-builder to furnish the
22architecture, engineering, and related services as required for
23a given public project, and to furnish the labor, materials,
24and other construction services for the same public project.
25A design-build contract may be conditioned upon subsequent
26refinements in scope and price, and may permit the government
27entity to make changes in the scope of the project without
28invalidating the design-build contract.
   29e.  “Design-build project” means the design, construction,
30alteration, addition, remodeling, or improvement of any
31buildings, infrastructure, or facilities under contract with a
32government entity. “Design-build project” does not include a
33project for the construction, reconstruction, or improvement of
34a highway, bridge, or culvert.
   35f.  “Design-builder” means any individual, partnership,
-1-1joint venture, or corporation subject to a best-value or
2qualification-based selection that offers to provide or
3provides design services and general contracting services
4through a design-build contract in which services within
5the scope of the practice of professional architecture or
6engineering are performed respectively by a licensed architect
7or licensed engineer and in which services within the scope of
8general contracting are performed by a general contractor or
9other legal entity that furnishes architecture or engineering
10services and construction services either directly or through
11subcontracts or joint ventures.
   12g.  “Design criteria consultant” means a person, corporation,
13partnership, or other legal entity that meets any of the
14following requirements:
   15(1)  Is duly licensed and authorized to practice
16architecture within the state of Iowa.
   17(2)  Has a design-build professional certification or equal
18training to be a design criteria consultant.
   19(3)  In the case of an engineered project, is duly licensed
20as a professional engineer within the state of Iowa within
21the discipline of the specific design-build project, and is
22employed by or contracted by the government entity to assist
23the government entity in the development of project design
24criteria, requests for proposals, and any additional services
25requested by the government entity to represent its interests
26in relation to a project.
   27h.  “Design criteria package” means the performance-oriented
28program, scope, and specifications for the design-build project
29sufficient to permit a design-builder to prepare a response to
30a government entity’s request for proposals for a design-build
31project, which may include capacity, durability, standards,
32ingress and egress requirements, performance requirements,
33description of the site, surveys, soil and environmental
34information concerning the site, interior space requirements,
35material quality standards, design and construction schedules,
-2-1site development requirements, provisions for utilities,
2storm water retention and disposal, parking requirements,
3applicable governmental code requirements, preliminary designs
4for the project or portions thereof, and other criteria for the
5intended use of the project.
   6i.  “Government entity” means the same as “governmental
defined in section 26.2 including, for the purpose of
8this section, the state board of regents.
   9j.  “Proposal” means an offer by a design-builder in response
10to a request for proposals to enter into a design-build
   12k.  “Request for proposals” means the document by which
13a government entity solicits proposals for a design-build
   15l.  “Stipend” means a payment to a design-builder who did not
16score the highest number of points at the conclusion of phase
17three of the best-value selection process to defray the cost of
18participating in phase two of the selection process, and for
19the use of any intellectual properties obtained.
   202.  Notwithstanding any other law to the contrary, a
21government entity shall be authorized to enter into an
22alternative project delivery contract.
   233.  Construction manager-at-risk contracts.
   24a.  A government entity shall publicly disclose its intent to
25use the construction manager-at-risk method and its selection
26criteria at least one week prior to publishing the request
27for proposals and request for statements of qualifications.
28The government entity shall publish its request for proposals
29and statements of qualifications. Before or concurrently
30with selecting a construction manager-at-risk, the government
31entity shall select or designate an engineer or architect
32who shall prepare the construction documents for the project
33and who shall comply with all state laws, as applicable. If
34the engineer or architect is not a full-time employee of the
35government entity, the government entity shall select the
-3-1engineer or architect on a basis of demonstrated competence and
2qualifications. The government entity’s engineer or architect
3for a project may not serve, alone or in combination with
4another, as the construction manager-at-risk. This paragraph
5does not prohibit a government entity’s engineer or architect
6from providing customary construction-phase services under
7the engineer’s or architect’s original professional service
8agreement in accordance with applicable licensing laws.
   9b.  The government entity may provide or contract for,
10independently of the construction manager-at-risk, inspection
11services, testing of construction materials, engineering, and
12verification of testing services necessary for acceptance of
13the project by the government entity.
   14c.  The government entity shall select the construction
15manager-at-risk in a two-phase process.
   16(1)  Phase one. The government entity shall prepare a
17request for statements of qualifications for the first phase.
18The request shall include general information on the project
19site, project scope, schedule, selection criteria, the time
20and place for receipt of statements of qualifications, and
21other information that may assist the government entity in its
22selection of a construction manager-at-risk. The selection
23criteria may include the construction manager-at-risk’s
24experience, past performance, safety record, proposed personnel
25and methodology, and other appropriate factors that demonstrate
26the capability of the construction manager-at-risk. The
27government entity shall not request fees or prices in phase
   29(2)  Phase two. In phase two, the government entity
30shall issue a request for proposals. The government entity
31may request that no more than five nor fewer than two
32construction managers-at-risk, selected solely on the basis
33of qualifications, provide additional information, including
34the construction manager-at-risk’s project proposal, proposed
35fee, and its price for fulfilling the general conditions.
-4-1Qualifications shall account for a minimum of forty percent
2of the evaluation. Cost shall account for a maximum of sixty
3percent of the evaluation.
   4d.  For each phase, the government entity shall receive,
5publicly open, and read aloud the names of the construction
6managers submitting proposals or statements of qualifications,
7respectively. Within forty-five days after the date of opening
8the proposals or statements of qualification submissions, the
9government entity or its representative shall evaluate and rank
10each proposal or statement of qualifications submission in
11relation to the criteria set forth in the applicable request.
   12e.  The government entity or its representative shall
13select the construction manager-at-risk that submits the
14proposal that offers the best value for the government entity
15based on the published selection criteria and on its ranking
16evaluation. The government entity or its representative
17shall first attempt to negotiate a contract with the selected
18construction manager-at-risk. If the government entity or its
19representative is unable to negotiate a satisfactory contract
20with the selected construction manager-at-risk, the government
21entity or its representative shall, formally and in writing,
22end negotiations with that construction manager-at-risk and
23proceed to negotiate with the next construction manager-at-risk
24in the order of the selection ranking until a contract
25is reached or negotiations with all ranked construction
26managers-at-risk end.
   27f.  The selected construction manager-at-risk shall publicly
28advertise and receive bids or proposals from trade contractors
29or subcontractors for the performance of all major elements of
30the work other than the minor work that may be included in the
31general conditions. A construction manager-at-risk submits
32its sealed bid or sealed proposal in the same manner as all
33other trade contractors or subcontractors. All sealed bids
34or proposals shall be submitted at the time and location as
35specified in the advertisement for bids or proposals and shall
-5-1be publicly opened and the identity of each bidder and their
2bid amount shall be read aloud.
   3g.  The construction manager-at-risk and the government
4entity or its representative shall review all trade contractor,
5subcontractor, or construction manager-at-risk bids or
6proposals in a manner that does not disclose the contents of
7the bid or proposal during the selection process to a person
8not employed by the construction manager-at-risk, engineer,
9architect, or government entity involved with the project. If
10the construction manager-at-risk submitted bids or proposals,
11the government entity shall determine if the construction
12manager-at-risk’s bid or proposal offers the best value for the
13government entity. After all proposals have been evaluated and
14clarified, the award of all contracts shall be made public.
   15h.  If the construction manager-at-risk reviews, evaluates,
16and recommends to the government entity a bid or proposal from
17a trade contractor or subcontractor but the government entity
18requires another bid or proposal to be accepted, the government
19entity shall compensate the construction manager-at-risk by
20a change in price, time, or guaranteed maximum cost for any
21additional cost and risk that the construction manager-at-risk
22may incur because of the government entity’s requirement that
23another bid or proposal be accepted.
   24i.  If a selected trade contractor materially defaults in the
25performance of its work or fails to execute a contract with a
26construction manager-at-risk after being selected in accordance
27with this subsection, the construction manager-at-risk may
28itself, without advertising, fulfill the contract requirements
29or select a replacement trade contractor to fulfill the
30contract requirements.
   314.  In soliciting proposals for a design-build contract,
32a government entity shall determine the scope and level of
33detail required to permit design-builders to submit proposals
34in accordance with the request for proposals given the nature
35of the project.
   15.  In soliciting proposals for a design-build contract, a
2design criteria consultant shall be employed or retained by
3the government entity to assist in preparation of the design
4criteria package and request for proposals and perform any
5other additional service necessary to the project. The design
6criteria consultant may also evaluate construction regarding
7adherence of the design criteria. The design criteria
8consultant may not submit a proposal or furnish design or
9construction services for the design-build contract for which
10its services were sought.
   116.  A government entity shall publicly disclose its intent to
12solicit proposals for a design-build contract and its project
13design criteria package in the same manner that it would post
14notice for the competitive bidding process in section 26.3.
   157.  In soliciting proposals for a design-build contract, a
16government entity shall establish in the request for proposals
17a time, place, and other specific instructions for the receipt
18of proposals. Proposals not submitted in strict accordance
19with the instructions may be subject to rejection. Minor
20irregularities may be waived by the government entity.
   218.  A request for proposals shall be prepared for each
22design-build contract and shall contain, at minimum, the
23following elements:
   24a.  The procedures to be followed for submitting proposals,
25the criteria for evaluating proposals and their relative
26weight, and the procedure for making awards.
   27b.  The proposed terms and conditions for the design-build
28contract, if available.
   29c.  The design criteria package.
   30d.  A description of the drawings, specifications, or other
31information to be submitted with the proposal, with guidance
32as to the form and level of completeness of the drawings,
33specifications, or other information that will be acceptable.
   34e.  A schedule for planned commencement and completion of the
35design-build contract, if available.
   1f.  Budget limits for the design-build contract, if any.
   2g.  Requirements including any available ratings for
3performance bonds, payment bonds, and insurance, if any.
   4h.  The amount of the stipend, if any, that will be
   6i.  Any other information that the government entity in
7its discretion chooses to request including but not limited
8to surveys, soil reports, drawings of existing structures,
9environmental studies, photographs, references to public
10records, or affirmative action and minority business enterprise
11requirements consistent with state and federal law.
   129.  A government entity seeking to enter a design-build
13contract shall solicit design-build proposals either by
14using a three-phase, best-value process or a two-phase,
15qualifications-based process.
   16a.  A three-phase, best-value selection process shall be
17conducted as follows:
   18(1)  Phase one. Request for statements of qualifications of
   20(a)  The government entity shall review submitted statements
21of the qualifications and assign points to each in accordance
22with this section and as set out in the instructions of the
23request for qualifications.
   24(b)  All design-builders shall submit a statement of
25qualifications that shall include but not be limited to:
   26(i)  Demonstrated ability to perform projects comparable in
27design, scope, and complexity.
   28(ii)  References of owners for whom design-build projects,
29construction projects, or design projects have been performed.
   30(iii)  Qualifications of personnel who will manage the
31design and construction aspects of the project.
   32(iv)  The names and qualifications of the primary design
33consultants and the primary trade contractors with whom the
34design-builder proposes to subcontract or joint venture. The
35design-builder may not replace an identified contractor,
-8-1subcontractor, design consultant, or subconsultant without the
2written approval of the government entity.
   3(c)  The government entity shall evaluate the qualifications
4of all the design-builders who submitted statements of
5qualifications in accordance with the instructions of the
6request for qualifications. Qualified design-builders
7selected by the government entity may proceed to phase two
8of the selection process. The evaluation shall narrow the
9number of qualified design-builders submitting statements of
10qualifications to not fewer than two nor more than five. Under
11no circumstances shall price or fees be a part of the request
12for statements of qualifications criteria. Design-builders may
13be interviewed in either phase one or phase two of the process.
14Points assigned in phase one of the evaluation process shall
15not carry forward to phase two or phase three of the process.
16All qualified design-builders shall be ranked on points given
17in phases two and three only.
   18(d)  Once no fewer than two and no more than five qualified
19design-builders have been selected, the government entity shall
20issue its request for proposals and provide the design-builders
21a specified amount of time in which to concurrently assemble
22phase two and phase three proposals.
   23(2)  Phase two. Solicitation of technical proposals,
24including conceptual design for the project.
   25(a)  A design-builder shall submit its design for the project
26to the level of detail required for the proposal along with
27such other information the government entity requests, which
28may include a schedule, qualifications, and experience.
   29(b)  The ability of the design-builder to meet the schedule
30for completing a project as specified by the government entity
31may be considered as an element of evaluation in phase two.
   32(c)  Under no circumstances shall the design proposal
33contain any reference to the cost of the proposal.
   34(d)  The submitted designs shall be evaluated and assigned
35points in accordance with the requirements of the request for
-9-1proposals. Phase two shall account for not less than forty
2percent and no more than sixty percent of the total point score
3as specified in the request for proposals.
   4(3)  Phase three. Proposal of construction costs.
   5(a)  The government entity shall invite the selected
6design-builders to participate in phase three. The
7design-builders shall provide a fixed cost of design and
8construction. The proposal shall be accompanied by bid
9security and any other items, such as statements of minority
10participation, as required by the request for proposals.
   11(b)  Cost proposals shall be submitted in accordance with
12the instructions in the request for proposals. The government
13entity shall reject any proposal that is not submitted within
14the required time frame. Phase three shall account for not
15less than forty percent and no more than sixty percent of the
16total point score as specified in the request for proposals.
   17(c)  Proposals for phase two and phase three shall be
18submitted concurrently at the time and place specified in the
19request for proposals, but in separate envelopes or other means
20of submission. The phase three cost proposals shall be opened
21and read aloud only after phase two design proposals have been
22evaluated and assigned points, ranked in order, and posted.
23Cost proposals shall be opened and read aloud at the time and
24place specified in the request for proposals. At the same time
25and place, the evaluation team shall make public its scoring
26of phase two. Cost proposals shall be evaluated in accordance
27with the requirements of the request for proposals.
   28(d)  If the government entity determines that it is not in
29the best interest of the government entity to proceed with the
30project pursuant to the proposal offered by the design-builder
31with the highest total number of points, the government entity
32shall reject all proposals. In this event, all design-builders
33with lower point totals in phases two and three shall receive
34a stipend and the responsive design-builder with the highest
35point total shall receive an amount equal to two times the
-10-1stipend. If the government entity decides to award the
2project, the responsive design-builder with the highest point
3total shall be awarded the contract.
   4(e)  As an inducement to qualified design-builders, the
5government entity shall pay a stipend, the amount of which
6shall be established in the request for proposals, to each
7design-builder who submitted a proposal but was not accepted.
8Such stipend shall be no less than one-half of one percent
9of the total project budget. Upon payment of the stipend to
10such a design-builder, the government entity shall acquire
11a nonexclusive right to use the design submitted by the
12design-builder, and the design-builder shall have no further
13liability for the use of the design by the government entity in
14any manner. If the design-builder desires to retain all rights
15and interests in the design proposed, the design-builder shall
16forfeit the stipend.
   17b.  A two-phase, qualifications-based selection process shall
18be conducted as follows:
   19(1)  Phase one. Request for statements of qualifications of
   21(a)  The government entity must prepare a request for
22statements of qualifications. The request shall include
23general information on the project site, project scope,
24schedule, selection criteria, the time and place for receipt
25of statements of qualifications, and other information
26that may assist the government entity in its selection of a
   28(b)  The government entity shall state the selection
29criteria in the request for statements of qualifications. The
30selection criteria may include the design-builder’s experience,
31past performance, safety record, proposed personnel and
32methodology, and other appropriate factors that demonstrate the
33capability of the design-builder.
   34(c)  Selection criteria will be ranked and assigned points
35for each category. Point assignments shall be included as a
-11-1part of the request for statements of qualifications.
   2(d)  The government entity shall not request fees or prices
3in phase one. Any submissions with disclosed fees or prices
4will be disqualified and removed from consideration.
   5(2)  Phase two. Negotiations.
   6(a)  Negotiations shall be conducted, beginning with the
7design-builder ranked first. If a contract satisfactory
8and advantageous to the government entity can be negotiated
9at a price considered fair and reasonable and pursuant to
10contractual terms and conditions acceptable to the government
11entity, the award shall be made to that design-builder.
   12(b)  In the event that a contract cannot be negotiated
13with the design-builder ranked first, negotiations with that
14design-builder shall be formally terminated. The government
15entity shall conduct negotiations with the next-highest-ranked
16design-builder and continue this process until a contract can
17be negotiated that meets the terms of subparagraph division (a)
18of this subparagraph.
19   Sec. 2.  Section 262.34, subsection 1, Code 2019, is amended
20to read as follows:
   211.  a.  When the estimated cost of construction, repairs,
22or improvement of buildings or grounds under charge of the
23state board of regents, including construction, renovation, or
24repairs by a private party of a property to be lease-purchased
25by the board, exceeds one hundred thousand dollars, the board
26shall advertise for bids for the contemplated improvement or
27construction and shall let the work to the lowest responsible
28bidder. However, if in the judgment of the board bids received
29are not acceptable, the board may reject all bids and proceed
30with the construction, repair, or improvement by a method as
31the board may determine. All plans and specifications for
32repairs or construction, together with bids on the plans or
33specifications, shall be filed by the board and be open for
34public inspection. All bids submitted under this section shall
35be accompanied by a deposit of money, a certified check, or a
-12-1credit union certified share draft in an amount as the board
2may prescribe.
   3b.  The state board of regents may proceed with a
4construction, repair, or improvement by using an alternative
5project delivery contract in accordance with the provisions of
6section 26.17.
8The inclusion of this explanation does not constitute agreement with
9the explanation’s substance by the members of the general assembly.
   10Currently, most government entities must use a competitive
11bidding process for a construction project when that project
12is estimated to cost at least as much as a threshold defined
13in Code section 26.3. This bill allows a government entity to
14use an alternative project delivery contract in circumstances
15that normally require the government entity to use competitive
16bidding procedures. The bill defines a government entity to
17include the state board of regents.
   18The bill creates two types of alternative project delivery
19contracts, each with specified requirements. The first
20alternative is the construction manager-at-risk contract. If a
21government entity opts to use a construction manager-at-risk
22contract, the government entity shall select an engineer
23or architect to prepare the construction documents for
24the project. That engineer or architect cannot serve as
25the construction manager-at-risk. The government entity
26shall use a two-phase process in selecting the construction
27manager-at-risk. The first phase shall include a request for
28qualifications and the government entity’s selection criteria.
29The government entity may select at least two but no more
30than five of the construction managers-at-risk who submitted
31qualifications to participate in the second phase, based solely
32on the qualifications of those construction managers-at-risk.
33In phase two, the construction managers-at-risk that the
34government entity selects will provide additional information,
35including the project proposal, costs, and fees. The
-13-1government entity shall rank the construction managers-at-risk
2in a manner in which qualifications account for at least 40
3percent of the evaluation and cost accounts for no more than 60
4percent of the evaluation. The government entity shall select
5the construction manager-at-risk that offers the best value
6based on the evaluation criteria. If the two parties do not
7reach an agreement, the government entity shall proceed with
8the next highest-ranked construction manager-at-risk and follow
9this process until the government entity reaches a contract
10with a construction manager-at-risk. The selected construction
11manager-at-risk shall advertise for and receive sealed bids
12for proposals from trade contractors or subcontractors and
13publicly review those bids with the government entity in a
14manner that does not disclose the contents of the bid or
15proposal during the selection process to a person not employed
16by the construction manager-at-risk, engineer, architect, or
17government entity involved with the project. The construction
18manager-at-risk will select a bid in consultation with the
19government entity.
   20The second type of alternative project delivery method is
21the design-build contract, which can select design-builders in
22either a three-phase or two-phase process. In the three-phase
23process, the government entity shall first request statements
24of qualifications from design-builders. The government
25entity shall select at least two but no more than five
26qualified design-builders to move on to phases two and three.
27In the second phase, the government entity shall solicit
28technical proposals and conceptual designs from the remaining
29design-builders. The government entity shall pay a stipend
30to any design-builder that participates in phase two but
31whose contract the entity does not select. The third phase
32involves the design-builders submitting construction costs.
33The government entity shall award points for each proposal. If
34the government entity chooses to award a contract, it shall
35award the contract to the design-builder with the highest point
   2If the government entity uses the two-phase process, the
3government entity will request qualifications and include
4its selection criteria. The government entity will rank the
5qualifications of a design-builder. In the second phase, the
6government entity shall negotiate with the highest-ranked
7design-builder. If the two parties cannot agree to a contract
8with terms and conditions acceptable to the government
9entity, those negotiations shall be formally terminated
10and the government entity shall negotiate with the next
11highest-ranked design-builder. That process shall continue
12until the government entity can negotiate a contract with a
13design-builder with terms and conditions acceptable to the
14government entity.