Gervin-Hawkins Construction Bill Puts Winning Bids Beyond Audit

The text as introduced · 1,214 words

89R6375 JCG-D

By: Gervin-Hawkins
H.B. No. 2148

A BILL TO BE ENTITLED

AN ACT

relating to the construction manager-at-risk and design-build

methods of project delivery for a public work contract.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2269.253, Government Code, is amended by

amending Subsections (d) and (e) and adding Subsection (e-1) to

read as follows:

(d) If a one-step process is used, the governmental entity

shall [ may ] request, as part of the offeror's proposal :

(1) [ , ] proposed fees and prices for fulfilling the

general conditions ; and

(2) proposed prices and methods for preventing and

managing the risk of default by a trade contractor or

subcontractor .

(e) If a two-step process is used, the governmental entity

may not request fees or prices in step one. In step two, the

governmental entity shall [ may ] request that five or fewer

offerors, selected solely on the basis of qualifications, provide

additional information, including the construction

manager-at-risk's :

(1) proposed fee and prices for fulfilling the general

conditions ; and

(2) proposed prices and methods for preventing and

managing the risk of default by a trade contractor or

subcontractor .

(e-1) A governmental entity's request for proposals in a

one-step process or request for qualifications in a two-step

process must clearly provide that the proposed prices for

fulfilling the general conditions and the proposed prices for

preventing and managing risk of default by a trade contractor or

subcontractor are allowable costs for all purposes of the

construction contract, including for the purpose of calculating the

construction manager-at-risk's fee. A provision of a request for

proposals, a request for qualifications, or a construction contract

entered into under this subchapter that conflicts with the

requirements of this subsection has no effect.

SECTION 2. Section 2269.255, Government Code, is amended by

adding Subsections (c), (d), (e), (f), and (g) to read as follows:

(c) Except as provided by Subsection (d), if the

governmental entity determines that the construction

manager-at-risk's bid or proposal provides the best value under

Subsection (b)(2) and that bid or proposal is selected, the

governmental entity shall compensate the construction

manager-at-risk for the performance of that work in the same manner

that the governmental entity would have compensated one of the

other competing trade contractors or subcontractors that submitted

a bid or proposal for the work, as determined by the governmental

entity.

(d) If one or more bids or proposals received under this

section offer to provide services under a stipulated sum contract

and the construction manager-at-risk's bid or proposal is selected

as described by Subsection (c):

(1) the construction manager-at-risk shall be

compensated for the work in the manner that a stipulated sum

contract would provide; and

(2) the price proposed by the construction

manager-at-risk may not be audited.

(e) A construction manager-at-risk's compensation for the

performance of work under Subsection (b) is considered an allowable

trade contractor or subcontractor cost for all purposes of the

construction contract, including for purposes of calculating the

construction manager-at-risk's fee.

(f) For purposes of Subsection (d), a "stipulated sum

contract" is a contract in which the contractor agrees to provide

services for a fixed price resulting in the contractor bearing

substantial risk for any underestimated costs to provide the

services and is also known as a lump sum contract.

(g) A provision of a request for proposals, an advertisement

for bids or proposals, or a construction contract entered into

under this subchapter that conflicts with the requirements of

Subsection (c), (d), or (e) has no effect.

SECTION 3. Section 2269.307, Government Code, is amended by

amending Subsection (e) and adding Subsection (e-1) to read as

follows:

(e) Except as provided by Subsection (e-1), the [ The ]

governmental entity may request additional information regarding

demonstrated competence and qualifications, considerations of the

safety and long-term durability of the project, the feasibility of

implementing the project as proposed, the ability of the offeror to

meet schedules, or costing methodology. As used in this

subsection, "costing methodology" means an offeror's policies on

subcontractor markup, definition of general conditions, range of

cost for general conditions, policies on retainage, policies on

contingencies, discount for prompt payment, policies and pricing

for preventing and managing the risk of default by a trade

contractor or subcontractor, and expected staffing for

administrative duties. The term does not include a guaranteed

maximum price or bid for overall design or construction.

(e-1) The governmental entity may not request a guaranteed

maximum price or bid for overall design or construction.

SECTION 4. Subchapter G, Chapter 2269, Government Code, is

amended by adding Section 2269.3065 to read as follows:

Sec. 2269.3065. PRICES AND METHODS FOR PREVENTING AND

MANAGING RISK OF DEFAULT BY TRADE CONTRACTOR OR SUBCONTRACTOR. (a)

Any request for proposals, request for qualifications, or

construction contract entered into under this subchapter must

clearly provide that:

(1) the selected design-build firm may implement the

firm's proposed methods of preventing and managing the risk of

default by a trade contractor or subcontractor; and

(2) the proposed prices for the methods described by

Subdivision (1) are allowable costs for all purposes of the

construction contract, including for purposes of calculating the

selected design-build firm's fee.

(b) A provision of a request for proposals, a request for

qualifications, or a construction contract entered into under this

subchapter that conflicts with the requirements of Subsection (a)

has no effect.

SECTION 5. Subchapter G, Chapter 2269, Government Code, is

amended by adding Section 2269.312 to read as follows:

Sec. 2269.312. PERFORMANCE OF WORK. (a) A contract entered

into under this subchapter must allow the design-build firm to

perform portions of the construction work required by the contract

instead of contracting with another person to perform that work.

(b) The governmental entity may select the design-build

firm to perform portions of the construction work required by the

contract if:

(1) the design-build firm publicly advertises for bids

or proposals for the performance of the construction work required

by the contract;

(2) the design-build firm receives bids or proposals

from trade contractors or subcontractors for that work;

(3) the design-build firm submits a bid or proposal

for that work; and

(4) the governmental entity determines that the

design-build firm provides the best value for the governmental

entity.

(c) Sections 2269.255(c), (d), (e), (f), and (g) apply to

the compensation of the design-build firm and the construction

contract entered into under this subchapter in the same manner as

those laws apply to a construction manager-at-risk's compensation

and a construction contract entered into under Subchapter F.

(d) A provision of a request for proposals, an advertisement

for bids or proposals, or a construction contract entered into

under this subchapter that conflicts with this section has no

effect.

SECTION 6. Subchapters F and G, Chapter 2269, Government

Code, as amended by this Act, apply only to a request for

qualifications or proposals first advertised on or after the

effective date of this Act. A request for qualifications or

proposals first advertised before the effective date of this Act is

governed by the law in effect on the date the request for

qualifications or proposals was first advertised, and the former

law is continued in effect for that purpose.

SECTION 7. This Act takes effect September 1, 2025.