ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

First Regular Session

House: TRANS DP 12-0-0-0

HB 2876: government contracts; public-private partnerships

Sponsor: Representative Carroll, LD 22

House Engrossed

Overview

Requires public-private partnership agreements with the Arizona Department of Transportation (ADOT) to include provisions relating to recovery of damages for an unreasonable delay by the department and reasonable compensation for relocation or adjustment of utility facilities.

History

In any public-private partnership or other agreement for any eligible facility, ADOT may include provisions that: 1) Authorize ADOT or the private partner to establish and collect service charges; 2) Authorize ADOT to continue or cease collection of user charges, tolls, fares or similar charges after the end of the term of the agreement; 3) Allow ADOT to accept payments of monies and share revenues with the private partner; 4) Address how the partners will share management of risks of the project; 5) Specify how the partners will share the cost of development of the project; 6) Allocate financial responsibility for cost overruns; 7) Establish the damages to be assessed for nonperformance; 8) Establish performance criteria or incentives, or both; 9) Address the acquisition of right-of-way and other property interests, including eminent domain; 10) Establish recordkeeping, accounting and auditing standards to be used for the project; 11) Address responsibility for reconstruction or renovations in order for a facility to meet all applicable government standards for a project that reverts to public ownership; 12) Provide for patrolling and law enforcement on public facilities; 13) Identify any ADOT specifications that must be satisfied, including provision for the private partner to deviate from specification on a satisfactory showing to ADOT; 14) Require acceptable forms of security that meet a certain threshold; 15) Authorize the private partner in any concession agreement to establish and collect service charges to cover costs and the partner's investment; 16) Specify remedies and dispute procedures, including legal proceedings; and 17) Allow ADOT to acquire real property that is needed and related to eligible facilities (A.R.S. § 28-7705).

For design-build construction services only, an agent is required to award a stipulated fee equal to a percentage of the agent's project final budget for design and construction, as prescribed in the request for proposal, but not less than 0.2 % of the project final budget to each final list offeror who provides a responsive but unsuccessful proposal (A.R.S. § 34-603).

Provisions

1. Requires the public-private partnership agreement to contain a provision that provides for negotiations between ADOT and the private partner for the private partner to recover all damages incurred for a delay:

a) For which ADOT is responsible,

b) That is unreasonable under the circumstances and

c) That was not within the contemplation of the parties to the contract. (Sec. 1)

2. States that this requirement does not void any provision in the contract that requires notice claims or delays, provides for arbitration or any other procedure for settlement or provides for liquidated damages. (Sec. 1)

3. Requires the public-partner partnership agreement to contain a provision that requires ADOT to pay the private partner reasonable compensation for all work performed by the private partner to relocate or adjust utility facilities that are:

a) Located either within or outside the project right-of-way; and

b) Required to be relocated or adjusted in order to construct the work contracted to the private partner. (Sec. 1)

4. States that any provision in the agreement that imposes the risk of utility relocation or adjustment expenses on the private partner is void. (Sec. 1)

5. Requires that, for a design-build construction service request for proposal, that a stipulated fee of at least an unspecified percent, rather than not less than 0.2 % , of a project's final budget be awarded to each final list offeror who provides a responsive, but unsuccessful, proposal. (Sec. 2)

6. Makes technical changes. (Sec. 1)

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10. HB 2876

11. Initials JT Page 0 House Engrossed

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