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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
REVISED
AMENDED
government contracts; public-private partnerships
Purpose
Increases, from two-tenths of a percent to four-tenths of a percent, the stipulated fee that the Arizona Department of Transportation (ADOT) or an agent must award an unsuccessful offeror for a design-build construction services proposal.
Background
In any public-private partnership or other agreement for any eligible facility, ADOT may include provisions that, among other specifications: 1) authorize either ADOT or the private partner to establish and collect user charges, tolls, fares, rents or other similar charges; 2) address how the partners will share management of project risks; 3) specify how the partners will share project development costs; 4) allocate financial responsibility for cost overruns; and 5) address the acquisition of rights-of-way. Agreements must also contain provisions that include property tax exemptions, provisions relating to injunctive relief and concession agreements (A.R.S. § 28-7705).
Statute outlines an alternative process to professional service negotiations by which an agent may award a single contract for design-build construction services or job-order-contracting construction services. For design-build construction services only, an agent is required to award a stipulated fee equal to a percentage of the agent's final project budget to each final list offeror who provides a responsive yet unsuccessful proposal. The stipulated fee percentage is prescribed in the request for proposals, and cannot be less than two-tenths of a percent of the final project budget for design and construction (A.R.S. § 34-603).
The Joint Legislative Budget Committee fiscal note estimates that H.B. 2876 could increase costs to ADOT associated with stipulated fees for design-build projects by about $2.2 million annually. Increasing the minimum stipulated fee percentage is also expected to at least double the costs to local governments for design-build projects, but the impact cannot be estimated in advance (JLBC Fiscal Note).
Provisions
2. Applies the same requirements and specifications relating to the award of a stipulated fee for unsuccessful offerors to statute governing the contents of public-private partnership agreements.
3. Makes technical changes.
4. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Removes the requirement that a public-private partnership agreement contain provisions relating to recovery of damages by a private partner and utility facility relocation or adjustment.
2. Replaces the unspecified percentage with four-tenths of a percent.
3. Requires ADOT to award a stipulated fee of at least four-tenths of a percent, rather than not less than two-tenths of a percent, of the project's final budget to each final list offeror who provides a responsive yet unsuccessful proposal.
4. Applies the same requirements and specifications relating to the award of a stipulated fee to statute governing the contents of public-private partnership agreements.
Revisions
· Updates the fiscal impact statement.
House Action Senate Action
TRANS 2/17/21 DP 12-0-0-0 TAT 3/22/21 DPA 8-0-1
3rd Read 2/24/21 56-3-1
Prepared by Senate Research
April 13, 2021
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