HBA-LCA S.B. 669 76(R) BILL ANALYSIS
Office of House Bill AnalysisS.B. 669
By: Ratliff
Public Education
4/21/1999
Engrossed
BACKGROUND AND PURPOSE
S.B. 669 sets forth new procedural guidelines for the regulation of school
district purchases and contracts for the construction and repair of
improvements by institutions of higher learning. In 1997, the 75th
Legislature established procedures for school districts to follow when
entering contracts with construction manager-agents or construction
managers-at-risk, and to allow institutions of higher education to use the
design/build process for permanent improvements. S.B. 669 assimilates and
clarifies these procedures for alternative construction methods used by
schools and universities.
RULEMAKING AUTHORITY
It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution.
SECTION BY SECTION ANALYSIS
HBA-LCA S.B. 669 76(R)SECTION 1. Amends Sections 44.031(a), (b), (f), (h),
(i), (j), and (l), Education Code, as follows:
(a) Requires a school district contract, except contracts for the purchase
of produce or vehicle fuel, valued at $25,000 or more in the aggregate for
each 12-month period to be made by the method that provides the best value
for the district. Sets forth a list of such methods, including a request
for proposals, for services other than construction services and a job
order contract for the minor construction, repair, rehabilitation, or
alteration of a facility.
(d) Authorizes the board of trustees of a school district (board), rather
than the district, to adopt rules and procedures for the acquisition of
goods or services.
(f) Provides that this section does not apply to contracts, rather than
fees received, for professional services. Provides that in a two-step
procurement process, the time and place where the second-step bids,
proposals, or responses will be received are not required to be published
separately.
(h) Authorizes the board, if it determines that a delay posed by the
procurement, rather than competitive bidding, process prescribed by this
subchapter would prevent or substantially impair the conduct of classes or
other essential school activities, to make contracts for the replacement or
repair of the equipment or facilities on terms the board determines to be
appropriate under the circumstances, if school equipment or facilities are
destroyed or severely damaged. Makes conforming and nonsubstantive
changes.
(i) Makes a change conforming to SECTION 2 (Section 44.0311, Education
Code).
(j) Makes a change conforming to SECTION 2 (Section 44.0311, Education
Code).
(l) Makes a change conforming to SECTION 2 (Section 44.0311, Education
Code).
SECTION 2. Amends Subchapter B, Chapter 44, Education Code, by adding
Section 44.0311, as follows:
Sec. 44.0311. DELEGATION. (a) Authorizes the board of trustees of the
district, as appropriate, to delegate its authority under this subchapter
regarding an action authorized or required by this subchapter to be taken
by a school district to a designated person, representative, or committee.
Requires the district to provide notice of the delegation and the limits of
the delegation in the request for bids, proposals, or qualifications, or in
an addendum to the request. Provides that if the district fails to provide
that notice, a ranking, selection, or evaluation of bids, proposals, or
qualifications other than by the board in an open public meeting is
advisory only.
(b) Prohibits the board from delegating the authority to act regarding an
action authorized or required by this subchapter to be taken by the board
of a school district.
SECTION 3. Amends Section 44.032(f), Education Code, to authorize a court
to enjoin performance of a contract made in violation of this subchapter,
rather than Section 44.031(a) or (b). Authorizes any interested party to
bring an action for an injunction. Entitles a party, rather than a citizen,
who prevails in an action brought under this subsection to reasonable
attorney's fees as approved by the court. Makes conforming changes.
SECTION 4. Amends Section 44.035, Education Code, as follows:
Sec. 44.035. New title: EVALUATION OF BIDS AND PROPOSALS FOR CONSTRUCTION
SERVICES. (a) Requires the board of a school district that is considering
a construction contract using a method specified by Section 44.031(a),
before advertising, to determine which method provides the best value for
the district. Makes a nonsubstantive change.
(b) Requires the district to base its selection among offerors on criteria
authorized to be used under Section 44.031(b). Requires the district to
publish in the request for bids, proposals, or qualifications the specific
criteria that will be used to evaluate the offerors and the relative
weights, if any, given to the criteria. Makes a conforming change.
(c) Requires the district to document the basis of its selection and to
make the evaluations public on or before awarding the contract. Makes a
conforming change.
SECTION 5. Amends Section 44.036(a)(3), Education Code, to provide that
"design criteria package" means a set of documents that provide sufficient
information to permit a design-build firm to prepare a response to a school
district's request for qualifications and any additional information
requested, including criteria for selection.
SECTION 6. Amends Sections 44.036(e), (f) and (j), Education Code, as
follows:
(e) Authorizes the district, after qualifying no more than five offerors,
to interview those offerors for final selection as part of phase one of a
two-phase selection process. Requires the district, as part of the second
phase, to evaluate the information submitted by the offerors on the basis
of the selection criteria stated in the request for qualifications and the
results of any interview. Authorizes the district to request additional
information regarding certain items. Requires the district to rank each
proposal submitted on the basis of the criteria set forth in the request
for qualifications. Requires the district to select the design-build firm
that submits the proposal offering the best value for the district on the
basis of the published selection criteria and on its ranking evaluations.
Requires the district to first attempt in good faith to negotiate with the
selected offeror a contract on fair and reasonable terms. Requires the
district to, formally and in writing, end negotiations with that offeror
and proceed to negotiate with the next offeror in the order of the
selection ranking until a contract is reached or negotiations with all
ranked offerors end, if the district is unable to negotiate a satisfactory
contract with the selected offeror.
(f) Requires the firm's engineers or architects, upon section of a
design-build firm, to complete the design, submitting all design elements
for review and determination of scope compliance to the district or
district's engineer or architect before or concurrently with construction.
Makes a nonsubstantive change.
(j) Requires the penal sums of the performance and payment bonds to be
delivered to the district be in an amount equal to the project budget, as
specified in the design criteria package, if a fixed contract amount or
guaranteed maximum price has not been determined at the time a design-build
contract is awarded. Requires the design-build firm to 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 district to ensure that the
design-build firm will furnish the required performance and payment bonds
when a guaranteed maximum price is established. Makes a conforming change.
SECTION 7. Amends Sections 44.037(b) and (c), Education Code, as follows:
(b) Authorizes a district using the construction manager-agent method,
under contract between the district and the construction manager agent, to
require the construction manager-agent to provide administrative personnel,
equipment necessary to perform duties under this section, and on-site
management and other services specified in the contract. Makes a
conforming change.
(c) Prohibits the district's engineer or architect from serving, alone or
in combination with another person, as the construction manager-agent
unless the engineer or architect is hired to serve as the construction
manager-agent under a separate or concurrent procurement process conducted
in accordance with this subchapter. Provides that this subsection does not
prohibit the district's engineer or architect from providing customary
construction phase services under the engineer's or architect's original
professional service agreement in accordance with applicable licensing
laws.
SECTION 8. Amends Sections 44.038(c), (e), (f), (g), (h), (i), (j), (k),
and (l), and 44.039(c)-(g), Education Code, as follows:
Sec. 44.038. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-AT-RISK. (c)
Prohibits the district's engineer, architect, or construction
manager-agent for a project from serving, alone or in combination with
another, as the construction manager-at-risk.
(e) Requires the district to select the construction manager-at-risk in
either a one-step or two-step process. Requires the district to prepare a
request for proposals (RFP), in the case of a one-step process, or a
request for qualifications (RFQ), in the case of a two-step process, that
includes general information on the project site, project scope, schedule,
selection criteria, estimated budget, and the time and place for receipt of
proposals or qualifications, as applicable, a statement as to whether the
selection process is a one-step or two-step process, and other information
that may assist the district in its selection of a construction
manager-at-risk. Requires the district to state the selection criteria in
the request for proposals or qualifications, as applicable. Authorizes the
selection criteria to include the offeror's experience, past performance,
safety record, proposed personnel and methodology, and other appropriate
factors that demonstrate the capability of the construction
manager-at-risk. Authorizes the district to request, as part of the
offeror's proposal, proposed fees and prices for fulfilling the general
conditions, if a one-step process is used. Prohibits the district from
requesting fees or prices in step one, if a twostep process is used. Makes
a conforming change.
(f) Requires the district at each step to receive, publicly open, and read
aloud the names of the offerors. Requires the district, at the appropriate
step, to also read aloud the fees and prices stated in each proposal.
(g) Requires the district to first attempt in good faith to negotiate with
the selected offeror a contract on fair and reasonable terms. Requires the
district to, formally and in writing, end negotiations with that offeror
if it is unable to negotiate a satisfactory contract, and to proceed to
negotiate with the next offeror in the order of the selection ranking until
a contract is reached or negotiations with all ranked offerors end.
Redesignated from existing Subsection (h). Makes conforming changes.
(h) Requires a construction manager-at-risk to publicly advertise, in
accordance with Section 44.031(g), and receive bids or proposals from
contractors or subcontractors. Redesignated from existing Subsection (i).
(i) Prohibits the disclosure of the contents of a bid or proposal to a
person not employed by the construction manager-at-risk, engineer,
architect, or district. Redesignated from existing Subsection (j).
(j) Redesignated from existing Subsection (k).
(k) Authorizes the construction manager-at-risk to fulfill without
advertising the contract requirements or select a contractor or
subcontractor to fulfill those requirements if a selected contractor or
subcontractor defaults in the performance of its work or fails to execute a
subcontract after being selected in accordance with this section.
(l) Requires penal sums of performance and payment bonds delivered to the
district to be in an amount equal to the project budget, as specified in
the RFQ, if a fixed contract amount or guaranteed maximum price has not
been determined at the time the contract is awarded. Requires the
construction manager to deliver the bonds not later than the 10th day after
the date the construction manager executes the contract unless the
construction manager furnishes a bid bond or other financial security
acceptable to the district to ensure that the construction manager will
furnish the required performance and payment bonds when a guaranteed
maximum price is established.
Sec. 44.039. SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES THROUGH
COMPETITIVE SEALED PROPOSALS. (c) Requires the district to select those
services for which it contracts in accordance with Section 2254.004,
Government Code, and to identify them in a request for proposal (RFP).
(d) Makes a conforming change. Redesignated from existing Subsection (f).
(e) Makes a conforming change. Redesignated from existing Subsection (g).
(f) Makes a conforming change. Redesignated from existing Subsection (h).
(g) Requires the district to first attempt in good faith to negotiate
with the selected offeror a contract on fair and reasonable terms.
Authorizes the district and its engineer or architect to discuss with the
selected offeror options for a scope or time modification and any price
change associated with the modifications. Requires the district to,
formally and in writing, end negotiations with that offeror, rather than
terminate further discussions, and proceed to the next offeror in the order
of the selection ranking until a contract is reached or all proposals are
rejected, if the district is unable to negotiate a contract with the
selected offeror. Makes conforming changes.
SECTION 9. Amends Section 44.040(b), Education Code, to provide that
Section 271.027(b), Local Government Code, which prohibits a contract from
being awarded to a person who is not the lowest bidder without notice.
SECTION 10. Amends Section 44.041, Education Code, as follows:
Sec. 44.041. New title: JOB ORDER CONTRACTS FOR FACILITIES CONSTRUCTION OR
REPAIR. (a) Includes minor construction, in addition to minor repair,
rehabilitation, or alteration, of a facility as a service for which a
school district may award a job order contract if the work is recurrent but
delivery times are indefinite and indefinite quantities and orders are
awarded substantially on the basis of predescribed and repriced tasks.
(b) Authorizes the school district to establish contractual unit prices
for a job order contract by specifying one or more published construction
unit price books and the applicable divisions or line items, or providing a
list of work items and requiring the offeror to bid or propose one or more
coefficients or multipliers to be applied to the price book or work items
as the price proposal.
(c) Makes a conforming change. Created from existing text.
(d) Makes a conforming change. Redesignated from existing Subsection (c).
(e) Makes conforming changes. Redesignated from existing Subsection (d).
(f) Authorizes the order to be a fixed price, lump-sum contract based
substantially on contractual unit pricing applied to estimated quantities
or to be a unit price order based on the quantities and line items
delivered. Redesignated from existing Subsection (e).
(g) Created from existing text.
(h) Provides that the base term of a job order contract is for the period
and with any renewal option that the district sets forth in the request for
proposals. Prohibits the base term from exceeding two years and is not
renewable without further advertisement and solicitation of proposals, if
the district fails to advertise that term.
(i) Requires those services to be provided in accordance with applicable
law, 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 the Texas Engineering Practice Act or the
practice of architecture within the meaning of Article 249a, V.T.C.S.
SECTION 11. Amends Section 51.779, Education Code, as follows:
Sec. 51.779. New title: EVALUATION OF BIDS AND PROPOSALS FOR CONSTRUCTION
SERVICES. (a) Requires an institution of higher education (institution)
that is considering a construction contract, before advertising, to
determine which method provides the best value for the institution. Makes
a conforming change.
(b) Requires the institution to base its selection among the offerors on
criteria established by the institution. Requires the institution to
publish in the request for bids, proposals, or qualifications the specific
criteria that will be used to evaluate the offerors and the relative
weights, if any, given to the criteria. Makes a conforming change.
(c) Requires the institution to document the basis of its selection and to
make the evaluation public on or before the award of the contract. Makes a
conforming change
SECTION 12. Amends Section 51.780(a)(3), Education Code, to provides that
"design criteria package" means a set of documents that provides sufficient
information to permit a design-build firm to prepare a response to an
institution's request for qualifications and any additional information
selected, including criteria for selection. Makes a conforming change.
SECTION 13. Amends Sections 51.780(f) and (k), Education Code, as follows:
(f) Makes conforming and nonsubstantive changes regarding the two-phase
method through which the board or its representative is required to select
a design-build firm.
(k) Requires that the penal sums of the performance and payment bonds be in
an amount equal to the project budget, as specified in the design criteria
package, if a fixed contract amount or guaranteed maximum price has not
been determined at the time a design-build contract is awarded. Requires a
design-build firm to deliver the bonds not later than the 10th day after
executing the contract unless the firm furnishes a bid bond or other
financial security acceptable to the institution to ensure that the
design-build firm will furnish the required performance and payment bonds
when a guaranteed maximum price is established.
SECTION 14. Amends Sections 51.781(b) and (c), Education Code, as follows:
(b) Authorizes an institution using a construction manager-agent, under
the contract between the institution and the construction manager-agent, to
require the construction manager-agent to provide administrative personnel,
equipment necessary to perform duties under this section, and on-site
management and other services specified in the contract.
(c) Prohibits the institution's engineer or architect from serving, alone
or in combination, as the construction manager-agent, unless the engineer
or architect is hired to serve as the construction manager-agent under a
separate or concurrent procurement conducted in accordance with this
subchapter. Provides that this subsection does not prohibit the
institution's engineer or architect from providing customary construction
phase services under the engineer's or architect's original professional
service agreement in accordance with applicable licensing laws. Makes
conforming changes.
SECTION 15. Amends Sections 51.782-51.784, Education Code, as follows:
Sec. 51.782. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-AT-RISK. (c)
Prohibits the institution's engineer, architect, or construction
manager-agent for a project from serving alone or in combination with
another, as the construction manager-at-risk.
(e) Requires the governing body of an institution (board) to select the
construction manager-at-risk in either a one-step or two-step process.
Sets forth procedures related to steps one and two of the process.
(f) Makes a conforming change.
(g) Makes conforming changes. Redesignated from existing Subsection (h).
(h) Makes conforming changes. Redesignated from Subsection (i).
(i) Makes conforming changes. Redesignated from Subsection (j).
(j) Makes conforming changes. Redesignated from Subsection (k).
(k) Redesignated from Subsection (l).
(l) Authorizes the construction manager-at-risk, without advertising, to
itself fulfill the contract requirements or select a replacement trade
contractor or subcontractor to fulfill the contract requirements, if a
selected trade contractor or subcontractor defaults in the performance of
its work or fails to execute a subcontract after being selected in
accordance with this section.
(m) Requires penal sums of performance and payment bonds delivered to the
district to be in an amount equal to the project budget, as specified in
the request for qualifications, if a fixed contract amount or guaranteed
maximum price has not been determined at the time the contract is awarded.
Requires the construction manager to deliver the bonds not later than the
10th day after the date the construction manager executes the contract
unless the construction manager furnishes a bid bond or other financial
security acceptable to the district to ensure that the construction manager
will furnish the required performance and payment bonds when a guaranteed
maximum price is established.
Sec. 51.783. SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES THROUGH
COMPETITIVE SEALED PROPOSALS. (c) Requires the board to provide for
certain independent testing methods and identify them in the RFP.
(d) Requires the board to state in the RFP the selection criteria that
will be used in selecting the successful offeror.
(f) Requires the board to receive, publicly open, and read aloud the names
of the offerors and, if any are required to be stated, all prices, stated
in the proposal. Redesignated from existing Subsection (g).
(g) Requires the board to first attempt in good faith to negotiate with the
selected offeror a contract on fair and reasonable terms. Authorizes the
board and its engineer or architect to discuss with the selected offeror
options for a scope or time modification and any price change associated
with the modifications, rather than cost reduction. Requires the board to
formally and in writing, end negotiations with that offeror. Makes
conforming changes. Redesignated from Subsection (h).
Sec. 51.784. New title: JOB ORDER CONTRACTS FOR FACILITIES CONSTRUCTION OR
REPAIR. (a) Authorizes an institution to award job order contracts for the
minor construction, repair, rehabilitation, or alteration of a facility.
(b) Authorizes the institution to establish contractual unit prices for a
job order contract by certain procedures.
(c) Makes conforming changes. Redesignated from existing Subsection (b).
(d) Makes conforming changes. Redesignated from Subsection (c).
(e) Makes conforming changes. Redesignated from Subsection (d).
(f) Makes conforming changes. Redesignated from Subsection (e).
(g) Created from existing text.
(h) Provides that the base term of a job order contract is for the period
and with any renewal option that the institution sets forth in the request
for proposals. Prohibits the base term from exceeding two years and from
being renewed without further advertisement and solicitation of proposals,
if the institution fails to advertise that term.
(i) Requires those services to be provided in accordance with applicable
law, 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 the Texas Engineering Practice Act or the
practice of architecture within the meaning of (Article 249a, V.T.C.S.).
SECTION 16. Effective date: September 1, 1999.
Makes application of this Act prospective.
SECTION 17. Emergency clause.