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  By: Callegari H.B. No. 1886
 
A BILL TO BE ENTITLED
AN ACT
relating to the procurement methods of certain political
subdivisions and certain other entities for the construction,
rehabilitation, alteration, or repair of certain projects.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Chapter 271, Local Government Code, is amended
by adding Subchapter J to read as follows:
SUBCHAPTER J. DESIGN-BUILD PROCEDURES FOR CERTAIN CIVIL WORKS
PROJECTS
       Sec. 271.181.  DEFINITIONS.  In this subchapter:
             (1)  "Architect" means an individual registered as an
architect under Chapter 1051, Occupations Code.
             (2)  "Civil works project" means:
                   (A)  roads, streets, bridges, utilities, water
supply projects, water plants, wastewater plants, water
distribution and wastewater conveyance facilities, desalination
projects, airport runways and taxiways, storm drainage and flood
control projects, or transit projects;
                   (B)  types of projects or facilities related to
those described by Paragraph (A) and associated with civil
engineering construction; and
                   (C)  buildings or structures that are incidental
to projects or facilities that are described by Paragraphs (A) and
(B) and that are primarily civil engineering construction projects.
             (3)  "Design-build firm" means a partnership,
corporation, or other legal entity or team that includes an
engineer and a construction contractor qualified to engage in civil
works construction in Texas.
             (4)  "Design criteria package" means a set of documents
that:
                   (A)  provides sufficient information to convey
the intent, goals, criteria, and objectives of the civil works
project; and
                   (B)  permits a design-build firm to:
                         (i)  assess the scope of work and the risk
involved; and
                         (ii)  submit a proposal on the project.
             (5)  "Engineer" means an individual licensed as an
engineer under Chapter 1001, Occupations Code.
             (6)  "Local governmental entity" means a municipality,
a county, a river authority, a defense base development authority
established under Chapter 379B, a municipally owned water utility
with a separate governing board appointed by the governing body of a
municipality, or any other special district or authority authorized
by law to enter into a public works contract for a civil works
project. The term does not include a water district or authority
created under Section 52, Article III, or Section 59, Article XVI,
Texas Constitution, with a population of less than 50,000.
       Sec. 271.182.  APPLICABILITY. (a) Before September 1,
2009, this subchapter applies to a local governmental entity with a
population of 500,000 or more within its geographic boundaries or
service area.
       (b)  On or after September 1, 2009, and before September 1,
2011, this subchapter applies to a local governmental entity with a
population of more than 100,000 within its geographic boundaries or
service area.
       (c)  On or after September 1, 2011, and before September 1,
2013, this subchapter applies to a local governmental entity with a
population of more than 50,000 within its geographic boundaries or
service area.
       Sec. 271.183.  APPLICABILITY OF OTHER LAW.  (a)  The
purchasing requirements of Section 361.426, Health and Safety Code,
apply to purchases by a local governmental entity made under this
subchapter.
       (b)  Except as provided by this section, to the extent of any
conflict, this subchapter prevails over any other law relating to
the purchasing of goods and services except a law relating to
contracting with historically underutilized businesses.
       Sec. 271.184.  NOTICE REQUIREMENTS. (a)  A local
governmental entity shall advertise or publish notice of requests
for bids, proposals, or qualifications in any manner prescribed by
law.
       (b)  For a contract entered into by a local governmental
entity under any of the methods provided by this subchapter, the
entity shall publish notice of the time and place the bid or
proposals or the request for qualifications will be received and
opened in any manner prescribed by law.
       Sec. 271.185.  CONTRACTS FOR CIVIL WORKS PROJECTS:
DESIGN-BUILD. (a) A local governmental entity may use the
design-build method for the construction, rehabilitation,
alteration, or repair of a civil works project. In using this method
and in entering into a contract for the services of a design-build
firm, the contracting local governmental entity and the
design-build firm shall follow the procedures provided by this
subchapter.
       (b)  A contract for a project under this subchapter may cover
only a single integrated project.  A local governmental entity may
not enter into a contract for aggregated projects at multiple
locations.  If a metropolitan transit authority created under
Chapter 451, Transportation Code, enters into a contract for a
project involving a bus rapid transit system created under Chapter
451, Transportation Code, the bus rapid transit system is a single
integrated project for purposes of this subsection.
       (c)  A local governmental entity shall use the following
criteria as a minimum basis for determining the circumstances under
which the design-build method is appropriate for a project:
             (1)  the extent to which the entity can adequately
define the project requirements;
             (2)  the time constraints for the delivery of the
project;
             (3)  the ability to ensure that a competitive
procurement can be held; and
             (4)  the capability of the entity to manage and oversee
the project, including the availability of experienced personnel or
outside consultants who are familiar with the design-build method
of project delivery.
       (d)  A local governmental entity shall make a formal finding
on the criteria described by Subsection (c) before preparing a
request for qualifications under Section 271.189.
       Sec. 271.186.  LIMITATION ON NUMBER OF PROJECTS. (a) During
the first four years that this subchapter applies to a local
governmental entity under Section 271.182, the entity may, under
this subchapter, enter into contracts for not more than two
projects in any fiscal year.
       (b)  After the period described by Subsection (a):
             (1)  a local governmental entity with a population of
500,000 or more may, under this subchapter, enter into contracts
for not more than four projects in any fiscal year;
             (2)  a local governmental entity with a population of
100,000 or more but less than 500,000 may, under this subchapter,
enter into contracts for not more than three projects in any fiscal
year; and
             (3)  a local governmental entity with a population of
less than 100,000 may, under this subchapter, enter into contracts
for not more than two projects in any fiscal year.
       Sec. 271.187.  USE OF ENGINEER. (a) The local governmental
entity shall select or designate an engineer who is independent of
the design-build firm to act as its representative for the
procurement process and for the duration of the work on the civil
works project.  The selected or designated engineer has full
responsibility for complying with Chapter 1001, Occupations Code.
       (b)  If the engineer is not a full-time employee of the local
governmental entity, the local governmental entity shall select the
engineer on the basis of demonstrated competence and qualifications
as provided by Section 2254.004, Government Code.
       Sec. 271.188.  USE OF OTHER PROFESSIONAL SERVICES. (a) The
local governmental entity shall provide or contract for,
independently of the design-build firm, the following services as
necessary for the acceptance of the civil works project by the
entity:
             (1)  inspection services;
             (2)  construction materials engineering and testing;
and
             (3)  verification testing services.
       (b)  The local governmental entity shall select the services
for which it contracts under this section in accordance with
Section 2254.004, Government Code.
       Sec. 271.189.  REQUEST FOR QUALIFICATIONS. (a)  The local
governmental entity shall prepare a request for qualifications that
includes:
             (1)  information on the civil works project site;
             (2)  project scope;
             (3)  project budget;
             (4)  project schedule;
             (5)  criteria for selection under Section 271.191 and
the weighting of the criteria; and
             (6)  other information that may assist potential
design-build firms in submitting proposals for the project.
       (b)  The local governmental entity shall also prepare a
design criteria package as described by Section 271.190.
       Sec. 271.190.  CONTENTS OF DESIGN CRITERIA PACKAGE. A
design criteria package may include, as appropriate:
             (1)  budget or cost estimates;
             (2)  information on the site;
             (3)  performance criteria;
             (4)  special material requirements;
             (5)  initial design calculations;
             (6)  known utilities;
             (7)  capacity requirements;
             (8)  quality assurance and quality control
requirements; and
             (9)  the type, size, and location of structures.
       Sec. 271.191.  EVALUATION OF DESIGN-BUILD FIRMS. (a) The
local governmental entity shall receive proposals and shall
evaluate each offeror's experience, technical competence,
capability to perform, the past performance of the offeror's team
and members of the team, and other appropriate factors submitted by
the team or firm in response to the request for qualifications,
except that cost-related or price-related evaluation factors are
not permitted at this stage.
       (b)  Each offeror must:
             (1)  select or designate each engineer that is a member
of its team based on demonstrated competence and qualifications, in
the manner provided by Section 2254.004, Government Code; and
             (2)  certify to the local governmental entity that each
selection or designation was based on demonstrated competence and
qualifications, in the manner provided by Section 2254.004,
Government Code.
       (c)  The local governmental entity shall qualify a maximum of
three offerors to submit additional information and, if the entity
chooses, to interview for final selection.
       Sec. 271.192.  SELECTION OF DESIGN-BUILD FIRM. The local
governmental entity shall select a design-build firm using one of
the following selection options:
             (1)  qualifications-based selection as provided by
Section 271.193; or
             (2)  a combination of technical and cost proposals as
provided by Section 271.194.
       Sec. 271.193.  PROCEDURES FOR QUALIFICATIONS-BASED
SELECTION. A local governmental entity that selects a design-build
firm using the qualifications-based selection option:
             (1)  may request that the firms identified under
Section 271.191(c) provide additional information regarding
demonstrated competence and qualifications, project approaches,
the ability of the firm to meet schedules, or other factors as
appropriate, except that price or cost-related criteria may not be
utilized;
             (2)  may not require firms to submit and may not accept
or consider conceptual or detailed engineering designs as part of
the proposal; and
             (3)  shall:
                   (A)  rank each proposal submitted on the basis of
the criteria set forth in the request for qualifications and the
results of any interview; and
                   (B)  select the design-build firm that is most
highly qualified on the basis of the published selection criteria
and on its ranking evaluations.
       Sec. 271.194.  PROCEDURES FOR COMBINATION OF TECHNICAL AND
COST PROPOSALS. (a)  A local governmental entity that selects a
design-build firm using a combination of technical and cost
proposals shall request proposals from firms identified under
Section 271.191(c).  A firm must submit a proposal not later than
the 180th day after the date the local governmental entity makes a
public request for the proposals from the selected firms. The
request for proposals must include:
             (1)  a design criteria package;
             (2)  a report containing geotechnical information
relating to the project site;
             (3)  detailed instructions for preparing the technical
proposal and the items to be included, including a description of
the form and level of completeness of drawings expected; and
             (4)  the relative weighting of the technical and price
proposals and the formula by which the proposals will be evaluated
and ranked.
       (b)  The technical proposal component under this section
must be weighted a minimum of 50 percent.
       (c)  Each proposal must include a sealed technical proposal
and a separate sealed cost proposal.
       (d)  The technical proposal must address:
             (1)  project approach;
             (2)  anticipated problems;
             (3)  proposed solutions to anticipated problems;
             (4)  ability to meet schedules;
             (5)  conceptual engineering design; and
             (6)  other information requested by the local
governmental entity.
       (e)  The local governmental entity shall first open,
evaluate, and score each responsive technical proposal submitted on
the basis of the criteria described in the request for proposals and
assign points on the basis of the weighting specified in the request
for proposals.  The local governmental entity may reject as
nonresponsive any firm that makes a significant change to the
composition of its firm as initially submitted. The local
governmental entity shall subsequently open, evaluate, and score
the cost proposals from firms that submitted a responsive technical
proposal and assign points on the basis of the weighting specified
in the request for proposals.  The local governmental entity shall
select the design-build firm in accordance with the formula
provided in the request for proposals.
       Sec. 271.195.  NEGOTIATION. After selecting the highest
ranked design-build firm under Section 271.193 or 271.194, the
local governmental entity shall first attempt to negotiate a
contract with the selected firm. If the local governmental entity
is unable to negotiate a satisfactory contract with the selected
firm, the entity shall, formally and in writing, end all
negotiations with that firm and proceed to negotiate with the next
firm in the order of the selection ranking until a contract is
reached or negotiations with all ranked firms end.
       Sec. 271.196.  ASSUMPTION OF RISKS. The local governmental
entity shall assume:
             (1)  all risks and costs associated with:
                   (A)  scope changes and modifications;
                   (B)  unknown or differing site conditions;
                   (C)  regulatory permitting, if the local
governmental entity is responsible for those risks and costs by law
or contract; and
                   (D)  natural disasters and other force majeure
events; and
             (2)  all costs associated with property acquisition.
       Sec. 271.197.  STIPEND AMOUNT FOR UNSUCCESSFUL OFFERORS.
(a) Not later than the 30th day after the date a contract is
executed under this subchapter, the local governmental entity shall
offer unsuccessful design-build firms that submit a response to the
entity's request for additional information under Section 271.194 a
stipend for preliminary engineering costs associated with the
development of the proposal that is equal to a minimum of one-half
of one percent of the preliminary estimate or budgeted cost for the
construction of the project. A greater amount may be negotiated
with a firm as compensation for the use of intellectual property.  
If the offer is accepted and paid, the local governmental entity may
make use of any work product contained in the proposal, including
the techniques, methods, processes, and information contained in
the proposal.  The use by the local governmental entity of any
design element contained in an unsuccessful proposal is at the sole
risk and discretion of the entity and does not confer liability on
the recipient of the stipend under this subsection.
       (b)  If a design-build firm rejects the offer of the stipend,
the firm retains all rights to the work product and the local
governmental entity may not make use of any unique design element,
technique, method, or process contained in the unsuccessful
proposal that was not also contained in the successful proposal at
the time of the original submittal.  If the local governmental
entity wants to acquire the rights to the work product of an
unsuccessful firm and the local governmental entity and that firm
are unable to reach an agreement on the value of the work product,
the matter may be submitted to binding arbitration.
       (c)  If a local governmental entity requests and receives
proposals and subsequently cancels the request or suspends the
selection process for more than 270 days after the date the local
governmental entity requests the design-build firms to provide
additional information, each offeror who submitted a proposal as
requested shall receive the minimum stipend required by this
section.
       (d)  To the extent of a conflict between this section and a
federal law or rule governing the expenditure of federal transit
funds by a transit authority created under Chapter 451,
Transportation Code, the federal law or rule prevails.
       Sec. 271.198.  COMPLETION OF DESIGN. (a) Following
selection of a design-build firm under this subchapter, the firm's
engineers shall submit all design elements for review and
determination of scope compliance to the local governmental entity
before or concurrently with construction.
       (b)  An appropriately licensed design professional shall
sign and seal construction documents before the documents are
released for construction.
       Sec. 271.199.  FINAL CONSTRUCTION DOCUMENTS. At the
conclusion of construction, the design-build firm shall supply to
the local governmental entity a record set of construction
documents for the project prepared as provided by Chapter 1001,
Occupations Code.
       Sec. 271.200.  PERFORMANCE OR PAYMENT BOND. (a)  A payment
or performance bond is not required for, and may not provide
coverage for, the portion of a design-build contract under this
section that includes design services only.
       (b)  If a fixed contract amount or guaranteed maximum price
has not been determined at the time a design-build contract is
awarded, the penal sums of the performance and payment bonds
delivered to the local governmental entity must each be in an amount
equal to the construction budget, as specified in the design
criteria package.
       (c)  The design-build firm shall deliver the bonds not later
than the 10th day after the date the design-build firm executes the
contract unless the design-build firm furnishes a bid bond or other
financial security acceptable to the local governmental entity to
ensure that the design-build firm will furnish the required
performance and payment bonds before the commencement of
construction.
       SECTION 2.  Section 271.904(a), Local Government Code, is
amended to read as follows:
       (a)  A covenant or promise in, in connection with, or
collateral to a contract for engineering or architectural services
to which a governmental agency is a party is void and unenforceable
if the covenant or promise provides that a licensed engineer or
registered architect whose work product is the subject of the
contract must indemnify, [or] hold harmless, or defend the
governmental agency against liability for damage, other than
liability for damage that is caused by or results from an act of
[the] negligence, intentional tort, intellectual property
infringement, or failure to pay a subcontractor or supplier
committed by [of] the indemnitor or the indemnitor's agent,
consultant under contract, or another entity over which the
indemnitor exercises control [governmental agency or its agent or
employee].
       SECTION 3.  Section 46.008, Education Code, is amended to
read as follows:
       Sec. 46.008.  STANDARDS. (a) The commissioner shall
establish standards for adequacy of school facilities. The
standards must include requirements related to space, educational
adequacy, and construction quality. All new facilities constructed
after September 1, 1998, must meet the standards to be eligible to
be financed with state or local tax funds.
       (b)  Any portable, modular building capable of being
relocated that is purchased or leased after September 1, 2007, for
use as a school facility, regardless of whether the building is an
industrialized building as defined by Section 1202.003,
Occupations Code, must be inspected as provided by Subchapter E,
Chapter 1202, Occupations Code, to ensure compliance with the
mandatory building codes or approved designs, plans, and
specifications.
       SECTION 4.  Section 51.784(i), Education Code, is amended to
read as follows:
       (i)  If a job order contract or an order issued under the
contract requires engineering or architectural services that
constitute the practice of engineering within the meaning of
Chapter 1001, Occupations Code, or the practice of architecture
within the meaning of Chapter 1051, Occupations Code, the board
shall select or designate an architect or engineer to prepare the
construction documents for the facility [those services shall be
provided in accordance with applicable law]. If the architect or
engineer is not a full-time employee of the institution, the board
shall select the architect or engineer on the basis of demonstrated
competence and qualifications as provided by Section 2254.004,
Government Code.
       SECTION 5.  Section 60.464(i), Water Code, is amended to
read as follows:
       (i)  If a job order contract or an order issued under the
contract requires engineering or architectural services that
constitute the practice of engineering within the meaning of
Chapter 1001, Occupations Code, or the practice of architecture
within the meaning of Chapter 1051, Occupations Code, the district
shall select or designate an architect or engineer to prepare the
construction documents for the facility [those services shall be
provided in accordance with applicable law]. If the architect or
engineer is not a full-time employee of the district, the district
shall select the architect or engineer on the basis of demonstrated
competence and qualifications as provided by Section 2254.004,
Government Code.
       SECTION 6.  The changes in law made by this Act apply only to
a contract for which a request for proposals or a request for
qualifications is first published or distributed on or after the
effective date of this Act.  A contract for which a request for
proposals or a request for qualifications is first published or
distributed before the effective date of this Act is governed by the
law in effect at the time the request is published or distributed,
and the former law is continued in effect for that purpose.
       SECTION 7.  (a)  Except as provided by Subsection (b), this
Act takes effect September 1, 2007.
       (b)  This Act takes effect only if H.B. No. 447, Acts of the
80th Legislature, Regular Session, 2007, takes effect.  If H.B. No.
447, Acts of the 80th Legislature, Regular Session, 2007, does not
take effect, this Act has no effect.