Chapter 385

2011 -- H 6197

Enacted 07/13/11

 

A N A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- STATE PURCHASES

 

     Introduced By: Representative John J. McCauley

     Date Introduced: May 26, 2011

 

It is enacted by the General Assembly as follows:

 

     SECTION 1. Section 37-2-7 of the General Laws in Chapter 37-2 entitled "State

Purchases" is hereby amended to read as follows:

 

     37-2-7. Definitions. -- The words defined in this section have the meanings set forth

below whenever they appear in this chapter, unless the context in which they are used clearly

requires a different meaning or a different definition is prescribed for a particular section, group

of sections, or provision:

      (1) "Business" means any corporation, partnership, individual, sole proprietorship, joint

stock company, joint venture, or any other legal entity through which business is conducted.

      (2) "Change order" means a written order signed by the purchasing agent or contractor

directing or allowing the contractor to make changes which the changes clause of the contract

authorizes the purchasing agent or contractor to order without the consent of the contractor or

purchasing agent authorization signed by the purchasing agent directing or allowing the

contractor to proceed with changes, alterations, or modifications to the terms, conditions, or scope

of work on a previously awarded contract.

      (3) "Chief purchasing officer" shall mean: (i) for a state agency, the director of the

department of administration, and (ii) for a public agency, the executive director or the chief

operational officer of the agency.

      (4) "Construction" means the process of building, altering, repairing, improving, or

demolishing any public structures or building, or other public improvements of any kind to any

public real property. It does not include the routine maintenance or repair of existing structures,

buildings, or real property performed by salaried employees of the state of Rhode Island in the

usual course of their jobs.

      (5) "Contract" means all types of agreements, including grants and orders, for the

purchase or disposal of supplies, services, construction, or any other item. It includes awards;

contracts of a fixed-price, cost, cost-plus-a-fixed-fee, or incentive type; contracts providing for

the issuance of job or task orders; leases; letter contracts; purchase orders; and construction

management contracts. It also includes supplemental agreements with respect to any of the

foregoing. "Contract" does not include labor contracts with employees of state agencies.

      (6) "Contract amendment" means any written alteration in the specifications, delivery

point, rate of delivery, contract period, price, quantity, or other contract provisions of any existing

contract, whether accomplished by unilateral action in accordance with a contract provision, or by

mutual action of the parties to the contract. It includes bilateral actions, such as supplemental

agreements, and unilateral actions, such as change orders, administrative changes, notices of

termination, and notices of the exercise of a contract option.

      (7) "Contractor" means any person having a contract with a governmental body.

      (8) "Data" means recorded information, regardless of form or characteristic.

      (9) "Designee" means a duly authorized representative of a person holding a superior

position.

      (10) "Employee" means an individual drawing a salary from a state governmental entity.

      (11) "State governmental entity" means any entity created as a legislative body or a

public or state agency by the general assembly or constitution of this state, except for municipal,

regional, or county governmental entities.

      (12) "May" means permissive.

      (13) "Negotiation" means contracting by either the method set forth in section 37-2-19,

37-2-20, or 37-2-21.

      (14) "Person" means any business, individual, organization, or group of individuals.

      (15) "Procurement" means the purchasing, buying, renting, leasing, or otherwise

obtaining of any supplies, services, or construction. It also includes all functions that pertain to

the obtaining of any supply, service, or construction item, including a description of

requirements, selection and solicitation of sources, preparation, and award of contract, and all

phases of contract administration.

      (16) "Public agency" shall mean the Rhode Island industrial recreational building

authority, the Rhode Island economic development corporation, the Rhode Island industrial

facilities corporation, the Rhode Island refunding bond authority, the Rhode Island housing and

mortgage finance corporation, the Rhode Island resource recovery corporation, the Rhode Island

public transit authority, the Rhode Island student loan authority, the Howard development

corporation, the water resources board corporate, the Rhode Island health and education building

corporation, the Rhode Island higher education assistance authority, the Rhode Island turnpike

and bridge authority, the Blackstone Valley district commission, the Narragansett Bay water

quality management district commission, the Rhode Island telecommunications authority, the

convention center authority, the Channel 36 foundation, the Rhode Island lottery commission

their successors and assigns, any other body corporate and politic which has been or will be

created or established within this state excepting cities and towns, and the board of governors for

higher education for all purchases which are funded by restricted, sponsored, or auxiliary monies.

      (17) "Purchase request" or "purchase requisition" means that document whereby a using

agency requests that a contract be entered into to obtain goods and/or services for a specified

need, and may include, but is not limited to, the technical description of the requested item,

delivery requirements, transportation mode request, criteria for evaluation of proposals, and/or

preparation of suggested sources of supply, and information supplied for the making of any

written determination and finding required by section 37-2-6.

      (18) "Purchasing agency" means any state governmental entity which is authorized by

this chapter, its implementing regulations, or by way of delegation from the chief purchasing

officer to contract on its own behalf rather than through the central contracting authority of the

chief purchasing officer.

      (19) "Purchasing agent" means any person authorized by a governmental entity in

accordance with procedures prescribed by regulations, to enter into and administer contracts and

make written determinations and findings with respect to contracts. The term also includes an

authorized representative acting within the limits of authority. "Purchasing agent" also means the

person appointed in accordance with section 37-2-1.

      (20) "Services" means the rendering, by a contractor, of its time and effort rather than the

furnishing of a specific end product, other than reports which are merely incidental to the required

performance of services. "Services" does not include labor contracts with employees of state

agencies.

      (21) "Shall" means imperative.

      (22) "State" means the state of Rhode Island and any of its departments or agencies and

public agencies.

      (23) "Supplemental agreement" means any contract modification which is accomplished

by the mutual action of the parties.

      (24) "Supplies" means all property, including, but not limited to, leases of real property,

printing, and insurance, except land or permanent interest in land.

      (25) "Using agency" means any state governmental entity which utilizes any supplies,

services, or construction purchased under this chapter.

      (26) As used in section 37-2-59, "architect" or "engineer" services means those

professional services within the scope of practice of architecture, professional engineering, or

registered land surveying pertaining to construction, as defined by the laws of this state.

"Consultant" means any person with whom the state and/or a public agency has a contract which

contract provides for the person to give direction or information as regards a particular area of

knowledge in which the person is a specialist and/or has expertise.

      (27) For purposes of sections 37-2-62 -- 37-2-70, "directors" means those members of a

public agency appointed pursuant to a statute who comprise the governing authority of the board,

commission, authority, and/or corporation.

      (28) "State agency" means any department, commission, council, board, bureau,

committee, institution, or other governmental entity of the executive or judicial branch of this

state not otherwise established as a body corporate and politic, and includes, without limitation,

the board of governors for higher education except for purchases which are funded by restricted,

sponsored, or auxiliary moneys and the board of regents for elementary and secondary education.

      (29) "Governmental entity" means any department, commission, council, board, bureau,

committee, institution, legislative body, agency, or government corporation of the executive,

legislative, or judicial branches of state, federal, and/or local governments.

     (30) "Construction management at-risk" or "construction management at-risk services" or

"construction management at-risk delivery method" is a construction method wherein a

construction manager at-risk provides a range of preconstruction services and construction

management services which may include cost estimation and consultation regarding the design of

the building project, the preparation and coordination of bid packages, scheduling, cost control,

and value engineering, acting as the general contractor during the construction, detailing the trade

contractor scope of work, holding the trade contracts and other contracts, evaluating trade

contractors and subcontractors, and providing management and construction services, all at a

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

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

payable to the construction management at-risk firm.

     (31) "Construction manager at-risk" or "construction management at-risk firm" is a

person or business experienced in construction that has the ability to evaluate and to implement

drawings and specifications as they affect time, cost and quality of construction and the ability to

coordinate and deliver the construction of the project within a guaranteed maximum price, which

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. The construction manager at-risk provides consultation services during

the preconstruction and construction phases of the project. The project engineer, architect or

owner's program manager may not serve as the construction manager at-risk.

     (32) "Owner's program manager" shall be an entity engaged to provide project

management services on behalf of a state agency for the construction and supervision of the

construction of a building project. The owner's program manager acts as the owner's agent in all

aspects of the construction project, including, but not limited to, architectural programming,

planning, design, construction, and the selection and procurement of an appropriate construction

delivery method. The owner's program manager shall have at least seven (7) years experience in

the construction and supervision of 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 firm, and/or the subcontractors associated with the project.

 

     SECTION 2. Chapter 37-2 of the General Laws entitled "State Purchases" is hereby

amended by adding thereto the following sections:

 

     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, a general contractor selected as the lowest

responsive bidder based on a lump-sum, fixed fee contract is not practicable for the construction

of the project and 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 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;

and

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

monitor and approve all reimbursable costs.

     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) 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, 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, a general contractor selected as the lowest

responsive bidder based on a lump-sum, fixed fee contract is not practicable for the construction

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

     (2) Why the use of construction management at-risk services 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 in place written procedures to ensure fairness in competition, evaluation

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

     (5) That the 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); and

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

approve all reimbursable costs.

     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.

 

     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, a 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, 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. -- (a) When procuring a construction manager at-risk, a technical review

subcommittee of the architectural, engineering and consulting selection committee, as set forth in

sections 37-2-59 through 37-2-63, shall be created to evaluate the statements of qualifications,

performance data and cost proposals submitted and any other relevant information. The technical

review subcommittee 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, the

owner's program manager, and no more than two (2) members from the using agency.

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

prequalify at least two (2) firms as professionally and technically qualified. If unable to

prequalify two (2) firms, the technical review subcommittee may re-advertise the request for

proposals or may complete the project through the procurement of a general contractor. If 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

procurement of a general contractor.

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

used to procure the construction manger at-risk.

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

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. 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 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

concerning proposed changes to the standardized contract with all offerors determined in writing

to be reasonably susceptible to being selected for award. Any discussions conducted must be

clearly memorialized through the detailed documentation of the decisions made and the reasons

for those decisions.

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

selection to the architectural, engineering and consultant services selection committee, as set forth

in sections 37-2-59 through 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.

     (6) The firm selected 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.

     (d) The technical review subcommittee 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 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 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.

     (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

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.

     (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 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 all subcontract work and equipment and material purchases shall be

procured pursuant to the following:

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

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

forwarded to the CMAR who shall evaluate the bids and conduct further negotiations where

appropriate;

     (5) Prior to the awarding of a bid, the using agency shall provide written approval of the

final award;

     (6) The final award shall be awarded with reasonable promptness.

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

subcontract work and equipment and material purchases shall be memorialized 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, 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 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, 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 contract.

 

     37-2-27.5. Procurement of construction manager at-risk services - Public records. --

(a) All documents related to a construction project delivered through a construction manager at-

risk, including, but not limited to, design documents, construction documents, bid documents,

financial documents and contract documents, shall be considered public records and be made

available for public inspection in accordance with chapter 38-2, entitled the Access to Public

Records Act. Information may only be withheld from public inspection if the construction

manager at-risk firm or the relevant subcontractor specifically states in writing a description of

the data or materials to be protected and the reasons why protection is necessary, and if the chief

purchasing officer determines through a written determination that the records are not public

pursuant to chapter 38-2 access to public records law. The burden to identify trade secrets,

commercial or financial information, or other information not subject to public disclosure

pursuant to chapter 38-2 shall rest with the construction manager at-risk or the relevant

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

accordance with chapter 38-2, the Access to Public Records law.

     (b) Notwithstanding any other provision 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, shall be subject to and shall comply with the

terms of this section.

 

     SECTION 3. This act shall take effect upon passage.

     

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LC02746

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