2014 -- S 2344 SUBSTITUTE A

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LC004107/SUB A/2

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS

     Introduced By: Senators Lombardi, McCaffrey, Lombardo, Conley, and Jabour

     Date Introduced: February 12, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 37-2-27.1, 37-2-27.2, 37-2-27.3 and 37-2-27.4 of the General

Laws in Chapter 37-2 entitled "State Purchases" are hereby amended to read as follows:

     37-2-27.1. Procurement of construction manager at-risk services -- Written

determination. -- (a) Prior to procuring construction manager at-risk services, the chief

purchasing officer must sign a written determination documenting the following:

      (1) That in accordance with section 37-2-18, the factors set forth in subsection (c) below,

the a general contractor selected as the lowest responsive bidder based on a lump-sum, fixed fee

contract method of construction management as provided under § 37-2-18 is not practicable for

the construction of the project and or will not result in the best value for the state;

      (2) That the using agency has clearly identified in writing why the use of construction

management at-risk services method of construction management as defined under § 37-2-7(30)

is appropriate for the building project;

      (3) That the building project has an estimated construction value of five million dollars

($5,000,000) or more;

      (4) That the using agency has in place written procedures to ensure fairness in

competition, evaluation, and reporting of results at every stage in the procurement process;

      (5) That the using agency has the capacity, a detailed plan, and procedures in place to

effectively procure and manage construction management at-risk services for the specific project

and has procured the services of a qualified owner's program manager pursuant to chapter 37-2

for the project, as set forth in § 37-2-7(32); and

      (6) That the using agency has a detailed, written plan with clearly identified procedures

to monitor and approve all reimbursable costs for the project.

      The chief purchasing officer shall file copies of the written determination with the

president of the senate, the speaker of the house, the senate fiscal advisor and the house fiscal

advisor no later than three (3) business days after executing the written determination.

      (b) Except for § 37-2-27.1(d) Notwithstanding notwithstanding any other provision to

the contrary, including any provision exempting any entity from the requirements of this chapter,

the chief executive officer of a public corporation as defined in subdivision § 35-20-5(4), or the

chief executive officer of a quasi-public agency as defined in § 37-2-7(16), prior to procuring

construction manager at-risk services, shall sign a written determination documenting the

following:

      (1) That in accordance with section 37-2-18, the factors set forth in subsection (c) below,

a the general contractor selected as the lowest responsive bidder based on a lump-sum, fixed fee

contract method of construction management is not practicable for the construction of the project

and or will not result in the best value for the state public corporation or the public agency;

      (2) Why the use of construction management at-risk services method of construction

management is appropriate for the building project;

      (3) That the building project has an estimated construction value of five million dollars

($5,000,000) or more;

      (4) That there is the public corporation or public agency has in place written procedures

to ensure fairness in competition, evaluation, and reporting of results at every stage in the

procurement process;

      (5) That the public corporation or quasi-public agency has the capacity, a detailed plan,

and procedures in place to effectively procure and manage construction management at-risk

services for the specific project and has procured the services of a qualified owner's program

manager, as set forth in subdivision 37-2-7(32) for the project as set forth in § 37-2-7(32); and

      (6) That there is a detailed, written plan with clearly identified procedures to monitor and

approve all reimbursable costs for the project.

     The chief executive officer shall file copies of the written determination with the

president of the senate, the speaker of the house, the senate fiscal advisor, and the house fiscal

advisor no later than three (3) business days after executing the written determination.

     (c) When evaluating the procurement of construction manager at-risk services, the factors

that may be considered in determining whether the general contractor method of construction

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management is not practicable or will not result in the best value for the state , public corporation,

or public agency shall include:

     (1) Whether specifications can be prepared that permit award on the basis of either the

lowest bid or the lowest-evaluated bid price;

     (2) Whether the available sources, the time and place of performance, and other relevant

circumstances exist as are appropriate for the use of competitive sealed bidding;

     (3) The complexity of the project, including the existing or proposed infrastructure or

structures, required demolition or abatement, adjacency to other structures or abutters, site

constraints, building systems, uniqueness of design elements, or environmental implications;

     (4) The size, scope, and estimated cost of the project;

     (5) The adequacy of available documentation regarding the existing site, buildings, or

structures; abutter infrastructure, buildings, or structures; or other documentation of as-built

conditions;

     (6) Phasing or logistical challenges arising out of the need to maintain existing

occupancy, continue existing operations, provide phased occupancy, or achieve more favorable

project financing terms;

     (7) The anticipated impact of fast-tracked design and construction on project cost or

schedule;

     (8) Potential to achieve optimal minority or woman business enterprise or other

subcontractor or vendor participation required in accordance with any applicable state or federal

laws;

     (9) The amount and type of financing available for the project, including whether the

budget is fixed and the source of funding, for example, general or special appropriation, federal

assistance monies, general obligation bonds or revenue bonds;

     (10) The administration or implementation of procedures required to comply with

applicable regulations or statutes; and

     (11) Mitigating the potential claims against the state arising from the inherent risks

associated with factors noted in subdivisions (3) through (10) of this subsection.

     (d) The provisions of §§ 37-2-27.1 through 37-2-27.5 shall not apply to highway or heavy

construction projects that are procured by either the Rhode Island department of transportation, a

public corporation, a public agency, or any city or town in Rhode Island.

     37-2-27.2. Procurement of construction manager at-risk services -- Owner's

program manager. -- (a) In order to bring the experience and knowledge necessary to maximize

the benefits of the construction manager at-risk services method of construction management, a

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using agency shall procure an owner's program manager as set forth in subdivision §37-2-7(32)

prior to procuring a construction manager at-risk. The owner's program manager shall have at

least seven (7) years experience in the construction and supervision of the construction of

buildings of similar size and complexity. The owner's program manager shall not have been

employed during the preceding year by the design firm, the construction management at-risk

firm, and/or the subcontractors associated with the project.

      (b) Notwithstanding any other provision of this section or of the general or public laws to

the contrary, including any provision exempting any entity from the requirements of this chapter,

all public corporations as defined in subdivision § 35-20-5(4) and quasi-public agencies as

defined in § 37-2-7(16), shall be subject to and shall comply with the terms of this section.

     37-2-27.3. Procurement of construction manager at-risk services -- Technical review

subcommittee Procurement of construction manager at-risk services -- Technical review

committee. -- (a) When procuring a construction manager at-risk, services for a using agency,

other than a public corporation or a public agency, a technical review subcommittee committee of

the architectural, engineering and consulting selection committee, as set forth in sections 37-2-59

-- 37-2-63, shall be appointed by the chief purchasing officer created to evaluate the statements of

qualifications, performance data, and cost proposals submitted and any other relevant

information. The technical review subcommittee committee shall be comprised of five (5)

members with one member from the division of legal services at the department of

administration,; one member from the department of administration with experience in the

procurement of construction manager at-risk services construction of capital projects; the owner's

program manager, one member from the division of purchases; and no more than two (2)

members from the using agency. The using agency's owner's program manager shall advise and

assist the technical review committee as necessary. The members of a technical review committee

of a public corporation or a public agency shall be determined in accordance with their own

policies and procedures.

      (b) Prior to opening the cost or pricing data, the technical review subcommittee

committee shall prequalify at least two (2) firms as professionally and technically qualified. If

unable to prequalify two (2) firms, then the technical review subcommittee committee may either

re-advertise the request for proposals or may complete the project through the procurement of a

general contractor recommend to the chief purchasing officer that the general contractor method

of construction management be utilized on the project. If the technical review committee is

unable to prequalify at least two (2) firms after the second advertising of the request for proposals

for construction manager at-risk services, the using agency shall complete the project through the

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procurement of a general contractor then the chief purchasing officer shall require the using

agency to utilize the general contractor method of construction management for the project.

     (c) The technical review subcommittee shall draft and evaluate the request for proposals

used to procure the construction manger at-risk. The department of administration's division of

capital projects, in conjunction with the division of purchases, shall assist the using agency in

drafting the request for proposals used to procure the construction manager at-risk services,

provided that such assistance is not mandatory for a public corporation or a public agency which

may develop the request for proposals without such assistance.

      (1) If federal restrictions do not prohibit the consideration of cost in the selection

process, then the request for proposals shall require that the proposals submitted itemize the

following:

      (i) The fee for pre-construction services;

      (ii) The fee for construction services with the profit and overhead separately itemized;

and

      (iii) The estimated cost of the general conditions.

      (2) The request for proposals shall include a standardized contract for construction

manager at-risk services in a form acceptable to the chief purchasing officer. Firms responding to

the request for proposals shall submit proposed changes to the contract language in writing as part

of their proposal. The technical review subcommittee committee shall consider the favorability to

the state of any proposed changes to the standardized contract as a criteria for evaluating and

ranking the firms.

      (3) The technical review subcommittee may conduct written or oral discussions

negotiations concerning proposed changes to the standardized contract with all offerors

determined in writing to be reasonably susceptible to being selected for award. Any discussions

negotiations conducted must be clearly memorialized through the detailed documentation of the

decisions made and the reasons for those decisions.

      (4) The technical review subcommittee committee shall submit its final recommendation

written recommendations of eligible construction management at-risk firms to the chief

purchasing officer. for selection to the architectural, engineering and consultant services selection

committee, as set forth in sections 37-2-59 -- 37-2-63.

     (5) The chief purchasing officer must determine through signature that all the terms of the

contract are fair and reasonable to the state. The chief purchasing officer shall issue a written

determination selecting a construction management at-risk firm for the project that includes

findings that all the terms of the proposed contract are fair and reasonable to the state.

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      (6) The construction management at-risk firm selected for the project may not be

reimbursed or paid for any services provided prior to the execution of the contract through

signature by the chief purchasing officer, a representative of the using agency, and a

representative of the construction manager at-risk firm and the issuance of a purchase order.

      (d) The technical review subcommittee chief purchasing officer shall negotiate the

guaranteed, maximum price as an amendment to the contract executed pursuant to subsection (c)

of this section when the design documents are no less than sixty percent (60%) complete. The

guaranteed, maximum price shall represent the maximum amount to be paid by the using agency

for the building project, including the cost of the work, the general conditions, and the fee

payable to the construction management at-risk firm.

      (1) The guaranteed maximum price shall itemize:

      (i) The amount of any construction manger manager at-risk contingency;

      (ii) The amount of the general conditions;

      (iii) Any fees, including fees incurred prior to the guaranteed maximum price;

      (iv) Each allowance with a statement of its basis;

      (v) A breakdown of costs by trade;

      (vi) The dates for substantial and final completion upon which the guaranteed, maximum

price is based;

      (vii) A schedule of applicable alternates and the unit prices; and

      (viii) The drawings, specifications, and other information on which the price is based.

      (2) The chief purchasing officer must determine through signature shall issue a written

determination that all the terms of the guaranteed, maximum price amendment are fair and

reasonable to the state.

      (3) The project may not proceed to the construction phase without the execution of the

guaranteed, maximum price amendment to the contract through signature by the chief purchasing

officer, a representative of the using agency, and a representative of the construction management

at-risk firm and issuance of an approved change order; provided, nevertheless, the chief

purchasing officer may authorize the commencement of preliminary investigatory, site, or other

construction if the chief purchasing officer issues a written determination that such preliminary

construction is advantageous to, and in the best interest of, the state, public corporation, or public

agency, and the remaining requirements for the commencement of construction set forth above

are satisfied as it relates to the proposed preliminary construction.

      (4) If the technical review subcommittee is unable to obtain a guaranteed maximum price

amendment that is fair and reasonable to the state or if the construction management at-risk firm

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is unable to provide all necessary bonds within five (5) days of the execution of the amendment,

the contract shall be terminated in writing and the project shall be completed through the

procurement of a general contractor. If the chief purchasing officer is unable to obtain a

guaranteed, maximum-price amendment that is fair and reasonable to the state or if the

construction management at-risk firm is unable to provide all necessary bonds within ten (10)

days of the execution of the amendment, then the chief purchasing officer may terminate the

construction management at-risk contract and:

     (i) Negotiate a new construction management at-risk contract and guaranteed, maximum-

price agreement with the next-most qualified construction management at-risk firm as determined

by the technical review committee; or

     (ii) Order that the project shall be completed through the utilization of the general

contractor method of construction management.

      (e) No provision of this section is intended to require a party to breach a contract

disclosed to the using agency and executed prior to the award of the CMAR construction manager

at-risk contract.

     37-2-27.4. Procurement of construction manager at-risk services -- Bidding of

subcontracts. -- (a) In order to promote transparency and the fair and equitable treatment of all

persons who deal with the procurement system, when using the construction manager at-risk

(CMAR) delivery method of construction management on a project, all subcontract work and

subcontractors, equipment, and material purchases shall be procured pursuant to the following:

      (1) All potential vendors shall be prequalified as a responsible bidder or offeror bidders

or offerors as defined in subdivision § 37-2-15(6);

      (2) All subcontract work and equipment and material purchases shall be procured

through the Rhode Island vendor information program (RIVIP); The construction management at-

risk firm shall be provided with access to the Rhode Island Vendor Information Program

("RIVIP") and/or the relevant portion of the program or information thereon in such direct or

indirect manner as the director of the department of administration may determine for the purpose

of issuing solicitations to pre-qualified vendors for subcontracts, equipment, and materials

necessary for the project. The construction manager at-risk shall use the RIVIP for solicitation of

bids for all subcontractors, equipment, and material necessary for the project;

      (3) All bids shall be opened in public at the time and place designated in the invitation

solicitation for bids and each bid, together with the name of the bidder, shall be recorded and an

abstract made available for public inspection;

      (4) The three (3) lowest responsive bids, as defined in subdivision 37-2-15(7), shall be

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forwarded to the CMAR who The construction manager at-risk shall evaluate the bids bid

proposals and conduct further negotiations with vendors where appropriate;

      (5) Prior to the awarding of a bid project-related contract by the construction manager at-

risk, the using agency shall provide its written approval of the final award;

      (6) The final award shall be awarded construction manager at-risk shall award all

project-related contracts with reasonable promptness after approval by the using agency.

      (b) When using the construction manager at-risk (CMAR) delivery method of

construction management, all subcontract work, and equipment, and material purchases shall be

memorialized by the construction management at-risk firm and the using agency through the

detailed documentation of the decisions made and the reasons for those decisions.

      (c) All bid documents, bid abstracts, and documents referring to the bid process shall be

public in accordance with the provisions of chapter 38-2 of title 38, the Access to Public Records

Act. The burden to identify trade secrets, commercial or financial information, or other records

not subject to public disclosure pursuant to chapter 38-2 of title 38 shall rest with the bidder or

offeror.

      Any person or entity denied the right to inspect records may appeal the denial in

accordance with the provisions of chapter 38-2 of title 38, the Access to Public Records Act.

      (d) No provision of this section is intended to require a party to breach a contract

disclosed to the using agency and executed prior to the award of the CMAR construction

management at-risk contract.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS

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     This act would amend the provisions of the written determination of procurement of

construction manager at-risk services by delineating those conditions or situations when

competitive sealed bidding is not practicable or will not result in the best values for the state.

     This act would take effect upon passage.

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