Understanding NC House Bill 857 Design Build and Public-Private Partnerships

Transcription

1 Understanding NC House Bill 857 Design Build and Public-Private Partnerships Ted Edwards 434 Fayetteville Street, Suite 2800 Raleigh, NC T: E:

2 Elements of House Bill 857 Design-Build Design-Build Bridging Public-Private Partnership

3 Design-Build and Design-Build Bridging requirements A design-builder is defined as an appropriately licensed person or entity that, under a single contract offers to provide design services and general contracting services which are within the scope of the practice of professional engineering or architecture and the scope of general contracting. Design-build bridging is defined as a design and construction delivery process whereby a governmental entity contracts for design criteria services under a separate agreement from the construction phase services of the design-builder.

4 New Design-Build/Public-Private Partnership law House Bill 857 (NC Gen. Stat (a1)) authorizes the use of design-build, design-build bridging, and public-private partnership contracts on public projects. The statute requires state agencies to select firms qualified to provide [design-build services and public-private partnership construction services] on the basis of demonstrated competence and qualification for the type of professional services required without regard to fee other than unit price information and thereafter to negotiate a contract for those services at a fair and reasonable fee with the best qualified firm.

5 New Design-Build/Public Partnership law The statute also provides that a resident firm shall be given preference over a nonresident firm. The statute (NC Gen. Stat (b)(5)) requires a detailed explanation of why the design-build or public private partnership was used instead of one of the other delivery methods and the anticipated benefits to the public entity. Proposed projects with estimated fees of less than $50,000 can be exempted.

6 Design-Build and Design-Build Bridging requirements Design-build bridging allows the governmental entity to select either a staff design professional or an independent design professional who is independent of the design-builder to act as its design criteria professional as its representative for the procurement process and for the duration of the design and construction. If the design professional is not a full-time employee, the governmental entity shall select the design professional on the basis of demonstrated competence and qualifications as provided by G.S

7 Design-Build and Design-Build Bridging requirements The design professional is not eligible to respond to the request for proposals nor provide design input to a design-build response to the request for proposals. The design professional shall provide a design criteria package equal to 35% of the completed design documentation for the entire construction project.

8 Design-Build and Design-Build Bridging requirements The design criteria package shall include: Programmatic needs, interior space requirements, intended space utilization and other capacity requirements. Information on the physical characteristics of the site, such as a topographic survey. Material quality standards or performance criteria. Special material requirements. Parking requirements. The type, size and location of adjacent structures. Preliminary or conceptual drawings sufficient in detail to allow the designbuilder to make a responsive proposal. Notice of any ordinances, rules or goals adopted by the governmental entity.

9 Design-Build and Design-Build Bridging requirements A governmental entity wishing to utilize the design-build method must create a written criteria for determining when it is appropriate to utilize the design-build method. NC Gen. Stat A(b) sets out the minimum criteria for use of the design-build method: The extent to which the governmental entity can adequately define the project requirements prior to the issuance of the request for qualifications. The project delivery time constraints. The ability to ensure that a quality project can be delivered. The governmental entity s capability to manage the project including the availability of staff or consultants who are experienced with design-build projects.

10 Design-Build and Design-Build Bridging requirements A good-faith effort to comply with G.S , G.S and to recruit and select small business entities. The criteria utilized by the governmental entity, including a comparison of the costs and benefits of using the design-build delivery method in lieu of the previous delivery methods.

11 Design-Build and Design-Build Bridging requirements Once the governmental entity receives responses to its request for qualifications, the 3 most highly qualified design-bidders shall be ranked. Entity may conduct interviews if it deems them necessary. Process must be repeated if governmental entity doesn t receive 3 responses from qualified design-builders. Each design-builder shall certify to the governmental entity that each licensed design professional, including subconsultants, was selected based upon demonstrated competence and qualifications. The design-builder must provide a performance and payment bond to the governmental entity and obtain written approval before changing key personnel on the project.

12 Design-Build and Design-Build Bridging requirements The public notice for the request for qualifications must include: The project site and the project scope. The anticipated project budget. The project schedule. Selection criteria and weighting factors. Notice of any rules or goals, including participation minority and/or small business participation goals. Other information provided by the owner to potential design-builders. Notice that each design-builder must submit a list of licensed design professionals that would work on the project and an outline of contractor selection strategy.

13 Public-private partnership construction contracts NC Gen. Stat C(a)(8) defines a public-private project as a capital improvement project undertaken for the benefit of a governmental entity and a private developer pursuant to a development contract that includes development of a public facility or other improvements and may include both public and private facilities. In order to engage in a public-private project, the governmental entity must determine in writing that it has a critical need for a capital improvement project. The governmental entity shall determine its programming requirements and shall determine the form in which private developers may submit their qualifications. The governmental entity shall advertise a notice for interested private developers to submit qualifications in a newspaper having general circulation in the county where the governmental entity is located.

14 Public-private partnership construction contracts Before receiving qualifications from developers, the governmental entity shall make available the programming requirements for facilities included in the public-private project. Any developer submitting qualifications shall include the following: Evidence of financial stability. Experience with similar projects. Explanation of project team selection (either by listing licensed contractors, subcontractors and design professionals that will be used or by outlining a selection strategy). Statement of availability to undertake the public-private project and the projected time line for project completion. Any other information required by the governmental entity.

15 Public-private partnership construction contracts The governmental entity may select one or more private developers with whom to negotiate the terms and conditions of a contract to perform the public-private project. The governmental entity must advertise the terms of the proposed contract in a newspaper having general circulation in the county where the governmental entity is located at least 30 days prior to entering into the development contract. Leases by local governments which are longer than 5 years and exceed $500,000 are subject to approval by the Local Government Commission. Leases by State entities that require payments from the General Fund or other funds from the general revenues of the State are subject to the approval procedures of N.C. Gen. Stat and

16 Public-private partnership construction contracts The governmental entity may enter into a development contract with a private developer to acquire, construct, own, lease or operate a project but the private developer must provide at least 50% of the financing for the total cost necessary to deliver the capital improvement project, whether through lease or ownership, for the governmental entity. The development contract may also provide that the governmental entity and the private developer shall use the same contractors for a public-private project. If so, the development contract must include provisions to assure that the work is done at reasonable price. If the design-build method is used, the provisions of N.C. Gen. Stat A shall apply.

17 Public-private partnership construction contracts The development contract must include the following: The property interest of the governmental entity and all other parties. The responsibilities of the governmental entity and all other parties. The financing responsibilities of the governmental entity and all other parties. The responsibilities to put forth a good faith effort to comply with N.C. Gen. Stat , and to recruit and select small business entities.

18 Public-private partnership construction contracts The development contract may provide that the private developer is responsible for any of the following: Construction, reconstruction or repair of the entire publicprivate project or any addition to it. Renovation of the public-private project. Purchase of the apparatus, supplies, materials or equipment for the public-private project. A good faith effort to comply with N.C. Gen. Stat , and to recruit and select small business entities.

19 Public-private partnership construction contracts A payment bond for 100% of the total anticipated amount of the construction contracts between the governmental entity and the private developer is required. The payment bond shall be solely for the protection of the subcontractors and suppliers. The development contract may provide for the requirement of a performance bond.

20 How will the new lien law affect the way we do business?

21 Ted Edwards Smith Moore Leatherwood LLP 434 Fayetteville Street, Suite 2800 Raleigh, North Carolina (919)