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:

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

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

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

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

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purchasing officer must sign a written determination documenting the following:

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

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

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

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

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

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

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is appropriate for the building project;

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

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($5,000,000) or more;

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

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

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

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

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

 

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

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

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to monitor and approve all reimbursable costs for the project.

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

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

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

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

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

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

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

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

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following:

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

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

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

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

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

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management is appropriate for the building project;

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

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($5,000,000) or more;

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

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

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procurement process;

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

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

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

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

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

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approve all reimbursable costs for the project.

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

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

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

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

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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,

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or public agency shall include:

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

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lowest bid or the lowest-evaluated bid price;

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

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

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

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

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

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

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

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

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conditions;

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

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

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project financing terms;

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

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schedule;

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

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

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laws;

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

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

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assistance monies, general obligation bonds or revenue bonds;

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

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applicable regulations or statutes; and

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

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

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

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

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

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

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

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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)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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policies and procedures.

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

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

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

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

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

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

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

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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

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

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

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

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

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

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

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may develop the request for proposals without such assistance.

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

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

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following:

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      (i) The fee for pre-construction services;

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

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and

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      (iii) The estimated cost of the general conditions.

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

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

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

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

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

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ranking the firms.

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

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negotiations concerning proposed changes to the standardized contract with all offerors

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

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

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decisions made and the reasons for those decisions.

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

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

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

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

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

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

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

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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

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

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

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

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

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

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

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

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

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payable to the construction management at-risk firm.

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      (1) The guaranteed maximum price shall itemize:

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

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      (ii) The amount of the general conditions;

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

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

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      (v) A breakdown of costs by trade;

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

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price is based;

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

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

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

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

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reasonable to the state.

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

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

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

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

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

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

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

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

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are satisfied as it relates to the proposed preliminary construction.

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

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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,

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

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

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

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

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

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construction management at-risk contract and:

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

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

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by the technical review committee; or

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

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contractor method of construction management.

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

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

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at-risk contract.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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abstract made available for public inspection;

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      (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

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proposals and conduct further negotiations with vendors where appropriate;

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

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

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

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

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

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

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

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

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

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

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

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

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offeror.

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

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

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

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

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management at-risk contract.

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     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

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

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

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     This act would take effect upon passage.

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