HB3563 - Relating to the method used to select engineers and general contractors for certain transportation-related construction projects.

  89R5624 SRA-F     By: Paul H.B. No. 3563       A BILL TO BE ENTITLED   AN ACT   relating to the method used to select engineers and general   contractors for certain transportation-related construction   projects.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 223, Transportation Code, is amended by   adding Subchapter G to read as follows:   SUBCHAPTER G. CONSTRUCTION MANAGER-GENERAL CONTRACTOR METHOD           Sec.   223.301.     DEFINITION. In this subchapter,   "construction manager-general contractor method" means a delivery   method by which the department contracts with an engineer for   design and construction phase services and contracts separately   with a construction manager to serve as the general contractor and   to provide consultation during the design and construction of a   state highway.           Sec.   223.302.     USE OF CONSTRUCTION MANAGER-GENERAL   CONTRACTOR METHOD.   Notwithstanding any other law requiring a   particular procurement procedure, including Subchapter A of this   chapter, the department may use the construction manager-general   contractor method to select a general contractor for a state   highway project as provided by this subchapter.           Sec.   223.303.     CONSTRUCTION MANAGER. (a)   For purposes of   this subchapter, a construction manager may be a sole   proprietorship, partnership, corporation, or other legal entity.           (b)     A construction manager serves as the general contractor   for a state highway project and assumes the risk for the   construction of the state highway at the contracted price.           (c)     A construction manager shall provide consultation to   the department regarding construction of a state highway project   during and after the design of the project, including consultation   regarding preconstruction services such as scheduling, pricing,   phasing, technical innovations, site investigation, and risk   mitigation.           (d)     The contracted price may be a guaranteed maximum price   or converted to a lump sum.           Sec.   223.304.     USE OF ENGINEER. (a)   On or before the   selection of a construction manager, the department shall select an   engineer to prepare the construction documents for the state   highway project.           (b)     The engineer selected for a state highway project under   Section 223.041 may not serve, alone or in combination with another   person, as the construction manager for that project.           (c)     Subsection (b) does not prohibit the engineer from   providing customary construction phase services under the   engineer's contract with the department in accordance with   applicable licensing laws.           Sec.   223.305.     ADOPTION OF CRITERIA AND RULES. (a)   The   department shall adopt weighted selection criteria and rules for   the selection process and award of contracts under this subchapter,   which may include interviews with top-ranked offerors.             (b)     The rules adopted under Subsection (a) must address the   selection process applicable to the award of a contract for   preconstruction services and for construction management and   construction services, including the process for contract   negotiations with the construction manager for construction of the   project or work packages associated with the project in accordance   with contract documents.           Sec.   223.306.     EVALUATION TEAM. (a)   Before preparing a   request under Section 223.307 for a state highway project, the   director shall appoint a team of at least three members to assist   the department in evaluating proposals and qualifications received   by the department.   The members may be department employees or   outside consultants.           (b)     At least one-half, or as near one-half as possible, of   the team members must be engineers registered in this state. An   engineer who serves on the team and is not a department employee may   not otherwise be involved in the project for which the request is   prepared under Section 223.307.           (c)     The team must include at least one person who is a senior   management employee of a general contractor that:                 (1)     is registered as a prequalified general contractor   under department rules;                 (2)     is not involved in the project for which the   request is prepared under Section 223.307; and                 (3)     has no other conflict of interest as determined by   the department.             Sec.   223.307.     SELECTION PROCESS. (a)   The department may   select the construction manager in a one-step or two-step process.           (b)     The department shall prepare a single request for   proposals, in the case of a one-step process, and an initial request   for qualifications followed by a request for proposals and any   required interviews, in the case of a two-step process. A request   prepared under this subsection must include:                 (1)     a statement as to whether the selection process is   a one-step or two-step process;                 (2)     information regarding the project's location,   scope, and limits;                 (3)     publicly available cost estimates and a budget for   the project;                 (4)     information regarding funding that may be   available for the project;                 (5)     the selection criteria adopted under Section   223.305 and the relative weighted value for each criterion;                 (6)     the time and place for receipt of qualifications   or proposals, as applicable; and                 (7)     any other information that may assist the   department in the selection of a construction manager.           (c)     If a one-step process is used, the department may   request, as part of the offeror's proposal, the offeror's:                 (1)     proposed billable rates for preconstruction   services personnel;                 (2)  proposed fee for home office overhead; and                 (3)     profit fee on the negotiated construction price   for performing construction services.           (d)     If a two-step process is used, the department may not   request proposed billable rates, fees, or prices in step one. In   step two, the department may request that five or fewer offerors,   selected on the basis of qualifications, experience, technical   competence, and ability to develop the project, provide additional   information, including the offeror's:                 (1)     proposed billable rates for preconstruction   services and general conditions personnel;                 (2)  proposed fee for home office overhead; and                   (3)     profit fee on the negotiated construction price   for performing construction services.           (e)     If a one-step process is used, proposed billable rates   for general conditions personnel must be negotiated on selection of   the construction manager.           Sec.   223.308.     SELECTION OF CONSTRUCTION MANAGER. (a)   The   department shall:                 (1)     rank the offerors in accordance with the selection   criteria provided in the request for proposals under Section   223.307(b)(5); and                 (2)     select the offeror that submits the proposal with   the highest ranking.           (b)     The award of a preconstruction services contract under   Subsection (a) authorizes the construction manager to:                 (1)     provide consultation to the department and project   engineer; and                 (2)     enter into open and transparent negotiations with   the department during the design phase of the project to refine the   project's cost and schedule for the construction management and   construction services contract.           (c)     The department shall use the services of an independent   cost estimator for each work package associated with the project to   validate the negotiated costs for the construction management and   construction services contract.   The independent cost estimator   shall follow procedures outlined in the Federal Highway   Administration Major Project Program Cost Estimating Guidance, as   it existed on September 1, 2025, and as adapted by the department.           (d)     On successful negotiations under Subsection (b)(2), the   department shall execute a construction management and   construction services contract with the construction manager for   either construction of the project or selected work packages   associated with the project.           (e)     Negotiations under Subsection (b)(2) shall be   terminated if the department is unable to reach a price agreement   with the construction manager.   If negotiations are terminated, the   department may competitively bid the construction of the project in   accordance with the department's procedures under Subchapter A.           (f)     Not later than the seventh day after the date a   preconstruction services contract is awarded under this section,   the department shall make public the selection rankings determined   under Subsection (a).           Sec.   223.309.     PERFORMANCE OF WORK. (a) A construction   manager shall perform a minimum percentage of construction work,   excluding general conditions work, as required by the department's   rules regarding standard specifications for highway and bridge   construction.           (b)     A construction manager shall publicly advertise for   bids or proposals and receive bids or proposals from subcontractors   for the performance of the remaining construction work.           Sec.   223.310.     PERFORMANCE OR PAYMENT BOND. The   construction manager shall deliver any performance and payment   bonds not later than the 10th day after the date the construction   manager is awarded a preconstruction services contract under   Section 223.308 unless the construction manager furnishes a bid   bond or other financial security acceptable to the department to   ensure that the construction manager will furnish the required   performance and payment bonds when a guaranteed maximum price is   established.          SECTION 2.  Chapter 370, Transportation Code, is amended by   adding Subchapter L to read as follows:   SUBCHAPTER L. CONSTRUCTION MANAGER-GENERAL CONTRACTOR METHOD           Sec.   370.451.     DEFINITION. In this subchapter,   "construction manager-general contractor method" means a delivery   method by which an authority contracts with an engineer for design   and construction phase services and contracts separately with a   construction manager to serve as the general contractor and to   provide consultation during the design and construction of a   transportation project.           Sec.   370.452.     USE OF CONSTRUCTION MANAGER-GENERAL   CONTRACTOR METHOD. Notwithstanding any other law requiring a   particular procurement procedure, including [Text truncated for display. Full text available on Congress.gov.]