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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
progressive design-build; ADOT
Purpose
Allows, until December 31, 2025, the Arizona Department of Transportation (ADOT) to use the progressive design-build method of project delivery, procure progressive design-build and construction services and initiate progressive design-build projects, as prescribed.
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 (A.R.S. § 28-7363). A design-build is the process of entering into and managing a contract between ADOT and another party in which the other party agrees to both design and build a highway, structure, facility or other items specified in the contract.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Method of Project Delivery
1. Allows ADOT to use the design-build or progressive design-build method of project delivery if ADOT determines in writing that it is appropriate and in the best interest of ADOT, except:
a) ADOT may not enter into a contract to operate any structure, facility or other item; and
b) each design-build or progressive design-build project must be a specific single project.
2. Prohibits ADOT from commencing any design-build or progressive design-build project after December 31, 2025.
3. Allows a design-build or progressive design-build contract to be executed and the services and construction to be rendered in whole or part after December 31, 2025, if ADOT solicits the contract on or before December 31, 2025.
4. Requires a railroad to approve the use of the design-build or progressive design-build delivery method before ADOT awards a contract for a project involving railroad facilities.
5. Allows the Director of ADOT (Director) to adopt procedures for procuring a project using the design-build or progressive design-build method of project delivery.
6. Applies, to ADOT design-build or progressive design-build projects for transportation facilities, requirements relating to bid, performance and payment bonds and change orders, progress payments, contract retentions, definitions and authority to award contracts.
7. Requires ADOT to use the following criteria as the minimum basis for determining when to use the design-build or progressive design-build method of project delivery:
a) the extent to which it can adequately define the project requirements;
b) the time constraints for delivery of the project;
c) the capability and experience of potential teams with the design-build or progressive design-build method of project delivery;
d) the suitability of the project for use of the design-build or progressive design-build method of project delivery in the areas of time, schedule, costs and quality;
e) the capability of ADOT to manage the project, including the employment of experienced personnel or outside consultants, and oversee the project with persons who are familiar with the design-build or progressive design-build method of project delivery; and
f) other criteria ADOT deems relevant.
Design Services and Construction Services
8. Allows ADOT to procure progressive design-build design services and construction services.
9. Requires ADOT to provide notice of each procurement of design services or construction services or both design services and construction services.
10. Requires ADOT to award contracts on the basis of demonstrated competence and qualifications for the type of design services or construction services or both design services and construction services.
11. Requires ADOT, in the procurement of design services or construction services or both design services and construction services, to:
a) issue a request for qualifications for each contract and publish notice of the request for qualifications;
b) initiate a selection team for each request for qualification; and
c) not request or consider fees, price, man-hours or any other cost information at any point in the selection process.
12. Limits, to a specific single project, the contract under a request for qualifications solicitation for progressive design-build design services and construction services.
13. Requires ADOT to enter into negotiations for the contract with the highest qualified person or firm on the final list for the design services or the construction services or both the design services and construction services, as prescribed.
14. Requires ADOT, if the contract is for progressive design-build design services and construction services and includes design services or preconstruction services or both design services and preconstruction services by the contractor, to:
a) enter into a written contract with the contractor for design services or both design services and preconstruction services; and
b) pay the contractor a fee for design services or preconstruction services or both design services and preconstruction services in an amount agreed by ADOT and the contractor.
15. Prohibits ADOT, until after ADOT has entered into the written contract for design services, preconstruction services or both design and preconstruction services and a design services or preconstruction services fee, from:
a) requesting or obtaining a fixed price or a guaranteed maximum price for design services or construction services or both design and construction services from the contractor; or
b) entering into a contract for design services, construction services or both design and construction services with the contractor.
16. Prohibits the commencement of design or constructions services until ADOT and the contractor agree in writing on either:
a) a fixed price that ADOT will pay for the design services or construction services to be commenced; or
b) a guaranteed maximum price for the design services or construction services to be commenced.
17. Requires the contractor for progressive design-build design services and construction services to be licensed to perform construction.
18. Requires the licensed contractor performing the contract to perform, with the contractor's own organization, construction work that amounts to at least 40 percent of the total contract price for construction.
19. Limits each procurement and request for qualifications to a single contract for progressive design-build design services and construction services.
20. Prohibits ADOT from procuring any construction using the progressive design-build design services and construction services method of project delivery after December 31, 2025.
21. Prohibits ADOT from entering into a contract as contractor to provide progressive design-build design services and construction services.
22. Requires each contract to contain a description of each separate location at which the construction will be performed and a requirement that the contractor include in each of the contractor subcontracts the same location description.
Miscellaneous
23. Defines progressive design-build as the process of entering into and managing a contract between ADOT and another party in which the other party:
a) agrees to both design and build a highway, structure, facility or any other items specified in the contract; and
b) at the
earliest feasible stage of the process, is selected through the use of
qualifications-based selection.
24. Specifies that a design-build contract involves two parties that agree to design and build a highway, structure facility or any other items specified in the contract.
25. Makes technical and conforming changes.
26. Becomes effective on the general effective date.
Prepared by Senate Research
February 9, 2023
KJA/sr