HBA-GUM, GUM, LCA C.S.S.B. 669 76(R)BILL ANALYSIS
Office of House Bill AnalysisC.S.S.B. 669
By: Ratliff
Public Education
5/19/1999
Committee Report (Substituted)
BACKGROUND AND PURPOSE
C.S.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. C.S.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, GUM C.S.S.B. 669 76(R)SECTION 1. Amends Sections 44.031(a), (b),
(f), (g), (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 (Purchasing Contracts) 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. Defines "professional services" for purposes
of this subsection.
(g) Adds language to require the notice of the time by when and place
where the bids or proposals, or the responses to a request for
qualifications, will be opened to be published in the manner provided by
this subsection. Provides that such a notice for a two-step procurement
process is not required to be published separately. Deletes existing text
authorizing the advertising on contracts involving less than $25,000 to be
limited to two successive issues of any newspaper published in a certain
specified manner.
(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, or
personal property 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.
(l) Makes a change conforming to SECTION 2.
SECTION 2. Amends Subchapter B, Chapter 44, Education Code, by adding
Sections 44.0311 and 44.0312, as follows:
Sec. 44.0311. APPLICABILITY TO JUNIOR COLLEGE DISTRICTS. Provides that
this subchapter (Purchases; Contracts) applies to junior college districts.
Defines "board of trustees" for purposes of this subchapter.
Sec. 44.0312. 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, in procuring construction services, 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 for
construction services 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 known at the time of the publication, 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 not later than the seventh day after the date
the contract is awarded. 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 to negotiate
with the selected offeror a contract. 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 selection 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 as the
proposal is opened.
(g) Requires the district to first attempt in to negotiate with the
selected offeror a contract. 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) (relating to the notice of the time and
place of the bids or proposals), 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. Adds language to require all bids or proposals to
be made public after the award of the contract or within seven days after
the date of final selection of bids or proposals, whichever is later.
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 to negotiate with the
selected offeror a contract. 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 except
as otherwise specifically provided by this subsection, Subchapter B
(Competitive Bidding on Certain Public Works Contracts), Chapter 271, Local
Government Code, does not apply to a competitive bidding process under this
suchapter, and that Sections 271.026 (Opening of Bids), 271.027(a)
(relating to the rejection of bids), and 271.0275 (Safety Record of Bidder
Considered), Local Government Code, apply to a competitive bidding process
under this subchapter. Makes conforming changes.
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 51.776(8), Education Code, to redefine
"institution" to mean an institution of higher education as defined by
Section 61.003, other than a public junior college.
SECTION 12. 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 known at the time of the publication, 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 not later than the seventh day after the date
the contract is awarded. Makes a conforming change
SECTION 13. 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 14. 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 15. 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 16. 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 17. Amends Section 51.9335(f), Education Code, to provide that
this section (Acquisition of Goods and Services) does not apply to
professional services as defined by Section 2254.002 (Definitions),
Government Code, rather than provide that this section expires September 1,
1999.
SECTION 18. Effective date: September 1, 1999.
Makes application of this Act prospective.
SECTION 19. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The substitute modifies SECTION 1 of the original (Section 44.031
(Purchasing Contracts), Education Code) as follows. In Subsection (f)
(relating to the applicability of Section 44.031) the substitute defines
"professional services" for purposes of that subsection. In Subsection (g)
the substitute adds language to require the notice of the time by when and
the place where the bids or proposals, or the responses to a request for
qualifications, will be opened , as well as received, to be published in
the manner provided by this subsection. Deletes existing text authorizing
the advertising on contacts involving less than $25,000 to be limited to
two successive issues of any newspaper published in a certain specified
manner. In Subsection (h) the substitute adds language to authorize the
board, if it determines that a delay posed by the procurement 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 personal
property is destroyed or severely damaged.
The substitute modifies SECTION 2 of the original to add new Section
44.0311 (Applicability to Junior College Districts) to provide that
Subchapter B (Purchases; Contracts), Chapter 44, Education Code, applies to
junior college districts, and to redefine "board of trustees" for purposes
of that subchapter. The substitute redesignates proposed Section 44.0311
(Delegation) to Section 44.0312. In Section 44.0312 the substitute
specifies that the district is required 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 in procuring construction
services, and makes a conforming change.
The substitute modifies SECTION 4 and redesignated SECTION 12 (Section
44.035 (Evaluation of Bids and Proposals for Construction Services) and
51.779 (Evaluation of Bids and Proposals for Construction Services),
Education Code) to require 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 known at the time of the
publication, rather than if any, given to the criteria. The substitute also
modifies those sections to require the district to make the evaluations
public not later than the seventh day after the date the contract is
awarded, rather than on or before the award of the day after the date the
contract is awarded.
The substitute modifies SECTIONS 6 and 8, and redesignated SECTIONS 14 and
16 (Sections 44.036, 44.038, 44.039, 51.780, 51.782, and 51.783, Education
Code) to delete proposed text specifying that a required negotiation of a
contract with the selected offeror by the district is in good faith and
that the contract is on fair and reasonable terms. The substitute also
modifies SECTIONS 8 and 16 (Sections 44.038 (Contracts for Facilities:
Construction Manager-at-Risk) and 51.782 (Contracts for Facilities:
Construction Manager-at-Risk), Education Code, to provide that the the
district is required to read aloud the fees and prices stated in each
proposal as the proposal is opened. In addition, the substitute modifies
those sections to provide that the bids or proposals are required to be
made public after the award of the contract or within seven days after the
date of final selection of bids or proposals, whichever is later.
The substitute modifies SECTION 9 (Section 44.040(b), Education Code) of
the original to provide that except as otherwise specifically provided by
that section, Subchapter B (Competitive Bidding on Certain Pubic Works
Contracts), Chapter 271, Local Government Code, does not apply to a
competitive bidding process under Subchapter B (Purchases; Contracts),
Education Code, and that Sections 271.026 (Opening of Bids), 271.027(a)
(relating to the rejection of bids), and 271.0275 (Safety Record of Bidder
Considered), Local Government Code, apply to a competitive bidding process
under Subchapter B, Education Code, and to make conforming changes.
The substitute adds new SECTIONS 11 and 17, and renumbers the subsequent
SECTIONS accordingly. New SECTION 11 amends Section 51.776(8), Education
Code, to redefine "institution." New SECTION 17 amends Section 51.9335(f),
Education Code, to provide that Section 51.9335 (Acquisition of Goods and
Services), Education Code, does not apply to professional services as
defined by Section 2254.002 (Definitions), Government Code, rather than to
provide that Section 51.9335 expires September 1, 1999.