HBA-DMH H.B. 3237 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3237 By: Hamric Transportation 4/22/2001 Introduced BACKGROUND AND PURPOSE Currently, only schools and institutions of higher education are authorized to use the design-build method of construction. This method allows for an architect, engineer, and builder to form a team, bid on a construction project together, and administer all of the aspects of the project from design to construction. Design-build proposals are not necessarily awarded to the lowest bidder, but are evaluated on a number of factors including the experience and expertise of the firms involved. Design-build proposals may result in greater overall savings by better coordinating the various phases of construction. House Bill 3237 authorizes the Texas Department of Transportation and the Texas Turnpike Authority to award transportation project contracts with an estimated total cost of more than $50 million by using the designbuild method. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Department of Transportation and to the Texas Turnpike Authority in SECTION 1 (Section 223.172, Transportation Code) of this bill. ANALYSIS House Bill 3237 amends the Transportation Code to authorize the Texas Department of Transportation (TxDOT) and the Texas Turnpike Authority (authority), for a transportation project that has an estimated total cost of more than $50 million, to use the design-build method and to enter into one or more designbuild contracts for the services of a design-build firm (Sec. 223.162). The bill requires TxDOT or the authority to prepare a request for qualifications that includes general information about the transportation project, proposed location, project scope, budget, time schedules, selection criteria, and other information that may assist design-build firms in submitting qualifications for the transportation project (Sec. 223.163). The bill requires TxDOT and the authority to each adopt rules to implement and administer design-build contracts for transportation projects (Sec. 223.172). The bill requires TxDOT or the authority to evaluate and select a design-build firm in two phases. The bill sets forth procedures for contract negotiations and the evaluation and selection process, including the requirement that TxDOT or the authority select the design-build firm submitting the proposal that offers the best value considering price, time for project completion, technical evaluation factors, and any other factor described in the request for proposals (Sec. 223.164 and 223.165). The bill establishes provisions for project design completion and review, inspection and testing services, and performance and payment bonds equivalent to existing provisions established for design-build contracts for school district facilities (Sec. 223.166-223.168). The bill requires TxDOT or the authority to pay an unsuccessful design-build firm that submits a response to a request for proposals the stipulated amount of at least one-half of one percent of the final contract price for any costs incurred in preparing that proposal. After payment of the stipulated amount, the bill authorizes TxDOT or the authority to make use of any design contained in the proposal. The use by TxDOT or the authority of any design element contained in an unsuccessful proposal is at the sole risk and discretion of TxDOT or the authority and does not confer liability on the recipient of the stipulated amount. The methodology for computing the stipulated amount must be stated in the request for proposals (Sec. 223.169). The bill requires TxDOT and the authority to ensure that disadvantaged and small businesses have an opportunity to participate in the performance of contracts and to use the same procedures that exist for removing barriers to participation by disadvantaged and small businesses in other TxDOT and authority construction and design contracts (Sec. 223.170). The bill provides that the use of design-build contracts by TxDOT and the authority for a transportation project that has a total cost of more than $50 million is a pilot program and sets forth provisions for the pilot program. Not later than February 1 of each odd-numbered year, the bill requires TxDOT and the authority to each submit a report to the legislature relating to the use of design-build contracts during the preceding two years. Not later than December 1, 2008, the bill requires the state auditor, TxDOT, and the authority to each submit a final report to the legislature relating to the use of design-build contracts as part of the review of TxDOT in 2009 by the Sunset Advisory Commission. These provisions expire December 31, 2009 (Sec. 223.173). If a transportation project procured using the design-build method is funded in whole or in part by federal funds and subject to federal procurement laws, rules, regulations, and procedures, the requirements of design-build contracts for transportation projects are required to be applied in a manner consistent with the applicable federal procurement laws, rules, regulations, and procedures (Sec. 223.171). EFFECTIVE DATE September 1, 2001.