Assigned to GR AS PASSED BY THE SENATE

ARIZONA STATE SENATE

Phoenix, Arizona
FINAL REVISED

FACT SHEET FOR H.B. 2651
HURF simplification; hold harmless (NOW: design-build pilot programs)

Purpose

Extends the Arizona Department of Transportation's (ADOT) design-build contracting pilot program for four more years and enables the Department of Administration (DOA), Maricopa County, Pima County and the cities of Phoenix, Tucson and Mesa to use the design-build contracting process on a limited basis.

Background

Laws 1996, Chapter 146 (S.B. 1253) authorized ADOT to utilize the design-build process for one project in Maricopa County and one project in Pima County. The 1996 legislation also authorized Maricopa County to utilize design-build for one public works project.

In July 1997, ADOT awarded a design-build contract to reconstruct the road ramps, frontage roads and the crossroad at Interstate 10 and Cortaro Road as its Pima County pilot project. The estimated cost of the project is $3 million and the Department estimates that the project will be completed four to six months earlier than originally planned due to the design-build contracting process. On December 16, 1997, ADOT selected the construction of HOV lanes and associated overpass upgrades to Interstate 17 from Thomas Road to Dunlap Road as the Department's design-build pilot project in Maricopa County. The cost of the project is estimated to be $70 million and ADOT anticipates that the entire project will be completed 2 to 2 ½ years ahead of schedule by utilizing the design-build process.

In March 1997, Maricopa County Department of Transportation (MCDOT) selected the reconstruction of the 51st Avenue Bridge crossing over the Salt River as the County's one design-build pilot project. MCDOT expects to award the contract for this $16.1 million project by October 1998. The County estimates that this project will be completed by 12 months sooner using the design-build process compared to the conventional design-bid-build process.

H.B. 2651 requires each authorized governmental entity (purchasing agency) to follow the same two-phase solicitation procedure for awarding a design-build contract. In order to qualify for the design-build procedure, a project must cost at least $10 million.

FACT SHEET H.B. 2651 - Final Revised Page

Due to the provision that requires ADOT to pay a stipulated fee to the two unsuccessful bidders that make the short list of qualifying bids, there will be a short-term negative impact to the state highway fund as a result of this legislation. According to ADOT, the cost savings of utilizing the design-build process compared to the design-bid-build process should more than offset the cost of the stipulated fees.

Provisions

1. Authorizes ADOT to use the design-build contracting procedure on three additional projects throughout the state. Enables DOA to use the design-build contracting procedure on two building projects.

2. Allows Maricopa County, Pima County and the cities of Mesa, Phoenix and Tucson to use the design-build procedure for one pilot project.

3. Sets a minimum cost of $10 million for each design-build project authorized by this legislation. Specifies that all environmental, right-of-way and condemnation costs remain with the purchasing agency. If the project involves a railroad facility, the purchasing agency must obtain the railroad's approval for the design-build concept before the purchasing agency can award a contract.

4. Specifies the criteria that must be used by a purchasing agent to determine if the design-build process is appropriate for a project. Stipulates that the purchasing agency must establish a two-phase competitive bid process for awarding design-build contracts.

5. Requires the purchasing agency, during the first phase, to appoint a selection team that must: 1) prepare documents for a request for qualifications; 2) evaluate the FACT SHEET H.B. 2651- Final Revised Page

design-build qualifications of responding firms; and 3) compile a short list of three firms in accordance with a technical and qualifications-base criteria.

6. Requires the purchasing agent, during the second phase, to issue a two-part request for proposals from the design-builders on the short list. Specifies what must be included in the technical proposal and the price proposal for a design-build project.

7. Prescribes the procedures the purchasing agency must follow after reviewing the proposals, including the payment of a stipulated fee to each short list proposer who provides a responsive, but unsuccessful proposal. The stipulated fee is equal to two-tenths of one per cent of the total design-build contract. Enables the stipulated fee to apply to the remaining design-build project contract that ADOT has not yet awarded pursuant to the 1996 design-build legislation.

8. Repeals the session law that established the 1996 Design-Build Study Committee and creates a new six-member Joint Legislative Study Committee on Design-Build Contracting to receive testimony and other information on the cost-effectiveness of the design-build process and design-build liability issues.

9. Moves back the Auditor General's reporting date to December 1, 1999 regarding ADOT's utilization of a "time factor" in awarding contracts and making minor "change orders" to projects.

10. Repeals Section 28-7326, which inadvertently provided ADOT design-build authority in statute along with the temporary 1996 session law.

11. Repeals the design-build pilot project program from and after December 31, 2002.

12. Contains an emergency clause.

Senate Action House Action

GR 4/27/98 DPA/SE 7-0-1-0 Final Read 5/19/98 51-0-9-0

3rd Read 5/4/98 28-1-1-0

Signed by Governor 5/29/98

Chapter 278

Prepared by Senate Staff

June 11, 1998

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