SB285: Bill Text

2019 Senate BILL 285

June 7, 2019 - Introduced by Senators Kapenga, Craig, Feyen, Kooyenga, Marklein, Nass, Tiffany, Wanggaard, Stroebel, Bernier and LeMahieu, cosponsored by Representatives Sanfelippo, Felzkowski, Brandtjen, Dittrich, Gundrum, Hutton, Knodl, Kuglitsch, Magnafici, Neylon, Ott, Quinn, Ramthun, Sortwell, Tauchen, Wichgers and Allen. Referred to Committee on Transportation, Veterans and Military Affairs.

SB285,1,3 An Act to create 15.463, 84.062 and 85.64 of the statutes; relating to: alternative highway project delivery methods, providing an exemption from emergency rule procedures, and granting rule-making authority.

Analysis by the Legislative Reference Bureau

This bill requires the Department of Transportation to conduct a pilot program under which DOT awards six contracts for design-build projects to be completed by 2025.

Under current law, the design and construction of projects are generally two distinct phases. Under this method, often referred to as “design-bid-build,” DOT has broad authority to accomplish the design of a project. The construction of a project must be executed by contract based on bids, with DOT awarding the contract to the lowest responsible bidder.

The bill authorizes a design-build method under which design, engineering, construction, and related services are procured through a single contract with a single entity capable of providing the services. The bill creates requirements for designating design-build projects, soliciting and evaluating requests for qualifications and requests for proposals, and awarding design-build contracts.

The bill requires DOT to designate design-build projects and award the following contracts:

1. One low bid design-build contract, which is awarded to the lowest responsible bidder, for a project with an estimated value of $10,000,000 to $50,000,000.

2. One best value design-build contract, which is awarded following a calculation of value as provided in the project's request for proposals, for a project with an estimated value of $50,000,000 to $150,000,000.

3. One fixed price variable scope design-build contract, which is awarded to the lowest qualified responsible bidder able to provide the best qualitative scope of work at a fixed price, with an estimated value of $50,000,000 to $150,000,000.

4. Three contracts, to be determined by DOT, with a total estimated value of not more than $200,000,000.

The bill creates in DOT an office of innovative program delivery that is responsible for conducting the design-build pilot program. The office is supervised by a director appointed by the DOT secretary. The office is required to prepare a report establishing the program structure and to develop a design-build procurement manual. At the end of the pilot program term, the office must prepare a report for the legislature evaluating the success of the program and joint committee on finance must make a recommendation as to whether the pilot program should be made permanent.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB285,1 Section 1 . 15.463 of the statutes is created to read:

SB285,2,5 15.463 Same; offices. (1) Office of innovative program delivery. There is created an office of innovative program delivery in the department of transportation. The director of the office shall be appointed by, and report directly to, the secretary of transportation.

SB285,2 Section 2. 84.062 of the statutes is created to read:

SB285,2,7 84.062 Alternative project delivery. (1) Definitions. In this section:

SB285,2,10 (a) “Alternative technical concepts" means a proposed alternative to the technical requirements provided by the office in the request for proposals for a project.

SB285,2,12 (b) “Best value design-build contract” means a design-build contract award made following a calculation of value as provided in a request for proposals.

SB285,3,3 (c) “Design-build contract” means a contract for a project under which the design, engineering, construction, and related services are provided by a single design-builder.

SB285,3,6 (d) “Design-builder" means a private legal entity, consortium, or joint venture that proposes to or executes a contract with the office to design, engineer, and construct a project under this section.

SB285,3,10 (e) “Design-build project" means a project for which design, engineering, construction, and related services are procured through a single contract with a single private legal entity, consortium, or joint venture capable of providing the necessary design, engineering, construction, and related services.

SB285,3,12 (f) “Design professional” means a person registered under s. 443.03 or 443.04 or a firm, partnership, or corporation registered under s. 443.08.

SB285,3,14 (g) “Director” means the director of the office of innovative program delivery attached to the department under s. 15.463 (1).

SB285,3,17 (h) “Fixed price variable scope design-build contract” means a design-build contract award made to the lowest qualified responsible bidder able to provide the best qualitative scope of work at a price not to exceed a fixed price set by the office.

SB285,3,19 (i) “Low bid design-build contract” means a design-build contract award made to the lowest qualified responsible bidder.

SB285,3,21 (j) “Member” means a private legal entity that is a member of a consortium or joint venture that is a design-builder.

SB285,3,23 (k) “Office” means the office of innovative program delivery attached to the department under s. 15.463 (1).

SB285,3,25 (L) “Project” means a project involving a highway improvement, as defined in s. 84.06 (1) (am).

SB285,4,2 (m) “Qualified responsible bidder” means a design-builder responding to a request for qualifications and that is certified by the technical review committee.

SB285,4,5 (n) “Responsive cost proposal” means a proposal that clearly identifies the costs of all services to be performed by the qualified responsible bidder, including all related fees, wages, and equipment and material costs.

SB285,4,9 (o) “Responsive technical proposal” means a proposal that clearly demonstrates a qualified responsible bidder's understanding of the design, engineering, and construction services to be performed and clearly describes the bidder's approach to the project.

SB285,4,11 (p) “Technical review committee” means the committee appointed under sub. (3).

SB285,4,14 (q) “Value engineering change” means a proposal that provides for a product of equal or improved quality to the product required by the department and that will reduce the project cost, improve safety, or decrease the time to complete the project.

SB285,4,19 (2) Design-build projects. (a) The department shall administer a pilot program under which not more than 6 contracts are awarded for design-build projects to be completed no later than December 31, 2025. The director may not designate a project as a design-build project unless the department is able to clearly define the scope of work.

SB285,4,21 (b) The department may not expend more than $250,000,000 for 6 design-build contracts designated as follows:

SB285,4,23 1. One low bid design-build contract for a project with an estimated value of not less than $10,000,000 and not more than $50,000,000.

SB285,4,25 2. One best value design-build contract for a project with an estimated value of not less than $50,000,000 and not more than $150,000,000.

SB285,5,2 3. One fixed price variable scope design-build contract with an estimated value of not less than $50,000,000 and not more than $150,000,000.

SB285,5,6 4. Three contracts designated by the director with a total estimated value of not more than $200,000,000. The department may enter into a low bid design-build contract, best value design-build contract or a fixed price variable scope design-build contract under this subdivision.

SB285,5,11 (c) For each project designated as a design-build project under par. (a), the office shall prepare a written analysis supporting the office's determination that it is the best interests of the state to make the designation. The written determination and supporting materials are subject to inspection under s. 19.35. The written analysis shall include all of the following:

SB285,5,13 1. The extent to which the department can adequately define the project requirements in a proposed scope of design and construction.

SB285,5,14 2. The impact on the projected project schedule and completion date.

SB285,5,15 3. The impact on the projected cost of the project.

SB285,5,16 4. The impact on the quality factors of the project.

SB285,5,18 5. The availability of contractors with experience with design-build projects or other innovative project delivery methods.

SB285,5,20 6. The capability of the department to manage a design-build project with office employees and design consultants.

SB285,5,23 7. The capability of the department to oversee a design-build project with a contractor with experience with design-build projects or other innovative project delivery methods.

SB285,5,25 8. The availability of current department employees qualified to perform design and engineering services required for the design-build project.

SB285,6,1 9. The original character of the product or the services.

SB285,6,3 10. The statutory authority for the designation of the project as a design-build project and how the project furthers the department's statutory duties.

SB285,6,6 11. Whether the design-build project must comply with any federal rule or regulation or any U.S. department of transportation requirement and a statement that the design-build project is in compliance.

SB285,6,7 12. Any other criteria the office determines is necessary.

SB285,6,11 (d) For each project designated under par. (a), the office shall solicit requests for qualifications, requests for proposals, and cost proposals as provided in this section and, subject to sub. (7) (c) and (d), let each project by contract to a qualified responsible bidder.

SB285,6,22 (e) No more than 6 months following the completion of a design-build project designated under this subsection, the office shall prepare a report, with input from the design-builder and the technical review committee, detailing the project, the decision to designate the project as a design-build project, the type of design-build contract let, and recommendations for statutory changes, if any. The office shall provide this report to the joint committee on finance and the senate and assembly standing committees having jurisdiction over transportation matters. The senate and assembly standing committees having jurisdiction over transportation matters shall schedule a hearing on the report not more than 30 days following distribution of the report by the chief clerks of the senate and the assembly. This paragraph does not apply to projects completed after December 31, 2025.

SB285,6,25 (3) Technical review committee. (a) The secretary shall appoint 5 individuals to a technical review committee to evaluate proposals submitted under this section. The committee shall consist of the following:

SB285,7,3 1. An employee of the department representing a regional office of the department who has at least 5 years of experience in the transportation construction industry.

SB285,7,6 2. Two employees of the department representing the division of the department responsible for transportation project development, each of whom have at least 5 years of experience in the transportation construction industry.

SB285,7,8 3. One person representing a state association of architectural, engineering, or design companies.

SB285,7,10 4. One person representing a state association of transportation construction companies.

SB285,7,15 (b) The secretary may not appoint to the technical review committee any person associated, as defined in s. 19.42 (2), with a design-builder. No person appointed to the technical review committee may review proposals under this section when the proposed project could benefit the appointee or the appointee's immediate family, as defined in s. 19.42 (7).

SB285,7,17 (c) A person appointed to the technical review committee is an agent of the department under s. 895.46.

SB285,7,19 (d) Except as otherwise provided in this section, all records of the technical review committee are open to public inspection and copying under s. 19.35 (1).

SB285,7,25 (4) Bids. The office shall solicit design-build proposals in 2 phases. In the first phase, the office shall solicit requests for qualifications under sub. (5) and requests for proposals under sub. (6). The technical review committee shall certify responsible bidders as provided in sub. (5) (c) and shall score technical proposals as provided in sub. (6) (b). In the 2nd phase, the office shall solicit cost proposals and the technical review committee shall evaluate cost proposals as provided in sub. (7).

SB285,8,2 (5) Request for qualifications. (a) The office shall prepare a request for qualifications that includes all of the following:

SB285,8,4 1. Minimum required qualifications for certification as a qualified bidder, which shall include all of the following:

SB285,8,8 a. The design and construction experience of the design-builder or member, personnel, and contractors who will manage the design, engineering, and construction aspects of the project. The office may not require a level of experience that will unreasonably restrict competition.

SB285,8,11 b. A requirement that the design-builder or member employ an individual who has no fewer than 5 years of experience in highway construction specific to highway improvement projects in this state.

SB285,8,13 c. A requirement that the design-builder or member be a design professional or will employ or contract with a design professional.

SB285,8,16 d. A sworn statement of the design-builder's financial ability, equipment, and experience in design-build project delivery and any other information the office determines is necessary to determine a bidder's competency.

SB285,8,18 2. Minimum required qualifications for certification as a responsible bidder, which shall include all of the following:

SB285,8,19 a. The design-builder is registered or authorized to do business in this state.

SB285,8,23 b. The design-builder submits a sworn statement that indicates that it has adequate financial resources to complete the work described in the request for qualifications, taking into account any other work the design-builder is currently under contract to complete.

SB285,9,3 c. The design-builder is bondable for the term of the proposed contract and is able to obtain a 100 percent performance bond and a separate 100 percent payment bond.

SB285,9,13 d. If the department has previously contracted with the design-builder or a member, the design-builder or member has a record of satisfactorily completing projects. In making this determination, the technical review committee shall consider if the design-builder or the member has completed all contracts in accordance with drawings and specifications, diligently pursued execution of the work and completed contracts according to the time schedule, fulfilled guarantee requirements of contracts, and complied with applicable safety program requirements. The technical review committee may not consider whether a design-builder or member exercised legal rights specified in statute or rule or under a contract with the department.

SB285,9,17 e. The design-builder or a member is not on a list maintained by the department identifying persons ineligible to bid due to suspension or debarment or on a list that the department of administration maintains for persons who violated statutory provisions or administrative rules relating to construction.

SB285,9,18 f. The design-builder or a member has been in business for at least 12 months.

SB285,9,21 g. The design-builder or a member has served as a prime contractor on no fewer than 5 projects administered by the department during the previous 5 calendar years.

SB285,9,24 h. The design-builder can provide information to the technical review committee upon request about ownership, management, and control of the design-builder.

SB285,10,3 i. The design-builder or a member has not been debarred from any government contracts and has not been found to have committed tax avoidance or evasion in any jurisdiction in the previous 10 years.

SB285,10,5 j. The design-builder has not been disciplined under a professional license in any jurisdiction in the previous 10 years.

SB285,10,8 k. No design professional employed by the design-builder or a member or that the design-builder will contract with has been disciplined in any jurisdiction under a license that is currently in use.

SB285,10,10 3. Information about bid procedures and the proposed project, including all of the following:

SB285,10,11 a. The type of contract to be awarded.