AB820: Bill Text

Analysis by the Legislative Reference Bureau

This bill makes numerous changes to the design-build method that the Department of Transportation is currently authorized to use for projects.

Under current law, the design and construction of projects are generally two distinct phases. Under this method, often referred to as “design-bid-build,” DOT has broad authority to accomplish the design of a project. The construction of a project must be executed by contract based on bids, with DOT awarding the contract to the lowest responsible bidder.

Under current law, DOT is also authorized to use a design-build method under which design, engineering, construction, and related services are procured through a single contract with a single entity capable of providing the services. Current law specifies the contents of requests for qualifications and requests for proposals solicited by DOT for design-build projects.

Under the bill, DOT must award six contracts for design-build projects every six years. The bill creates requirements for the evaluation of proposals and the awarding of design-build contracts. Under the bill, DOT must develop a design-build procurement manual. DOT must also prepare a report for the transportation projects commission and the legislature evaluating the success of the design-build program and the Joint Committee on Finance must make a recommendation as to whether the program should continue.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB820,1 Section 1 . 84.062 (1) (f) of the statutes is created to read:

AB820,2,3 84.062 (1) (f) “Design professional” means a person registered under s. 443.03 or 443.04 or a firm, partnership, or corporation registered under s. 443.08.

AB820,2 Section 2 . 84.062 (1) (j) of the statutes is created to read:

AB820,2,6 84.062 (1) (j) “Member” means a private legal entity that is a member of a consortium or joint venture that is a design-builder.

AB820,3 Section 3 . 84.062 (1) (k) of the statutes, as created by 2019 Wisconsin Act 9, is repealed.

AB820,4 Section 4 . 84.062 (1) (L) of the statutes is created to read:

AB820,2,11 84.062 (1) (L) “Project” means a project involving a highway improvement, as defined in s. 84.06 (1) (a).

AB820,5 Section 5 . 84.062 (1) (m) of the statutes, as created by 2019 Wisconsin Act 9, is amended to read:

AB820,3,3 84.062 (1) (m) “Qualified responsible bidder” means a design-builder responding to a request for qualifications and that is certified by the technical review committee.

AB820,6 Section 6 . 84.062 (1) (p) of the statutes is created to read:

AB820,3,6 84.062 (1) (p) “Technical review committee” means the committee appointed under sub. (3).

AB820,7 Section 7 . 84.062 (2) of the statutes, as created by 2019 Wisconsin Act 9, is renumbered 84.062 (2) (a) and amended to read:

AB820,3,11 84.062 (2) (a) The department shall administer a program for design-build projects. The department may not designate a project as a design-build project unless the department is able to clearly define the scope of work.

AB820,8 Section 8 . 84.062 (2) (b) of the statutes is created to read:

AB820,3,22 84.062 (2) (b) The department shall award 6 design-build contracts every 6 years, beginning on the effective date of this paragraph .... [LRB inserts date]. During each 6-year period, the department shall award at least one low bid design-build contract, one best value design-build contract, and one fixed price variable scope design-build contact and 3 additional contracts that may be any combination of low bid design-build, best value design-build, and fixed price variable scope design-build contracts. The combined cost of the 6 design-build contracts awarded under this paragraph in each 6-year period may not exceed $250,000,000 and the combined cost of all low bid design-build contracts awarded under this paragraph in each 6-year period may not exceed $25,000,000.

AB820,9 Section 9 . 84.062 (2) (c) of the statutes is created to read:

AB820,4,2 84.062 (2) (c) For each project designated under par. (a), the department shall solicit requests for qualifications, requests for proposals, and cost proposals as provided in this section and, subject to sub. (7) (c) and (d), let each project by contract to a qualified responsible bidder.

AB820,10 Section 10 . 84.062 (2) (d) of the statutes is created to read:

AB820,4,15 84.062 (2) (d) No more than 6 months following the completion of a design-build project designated under this subsection, the department shall prepare a report, with input from the design-builder and the technical review committee, detailing the project, the decision to designate the project as a design-build project, the type of design-build contract let, and recommendations for statutory changes, if any. The department shall provide this report to the transportation projects commission, the joint committee on finance, and the senate and assembly standing committees having jurisdiction over transportation matters. The senate and assembly standing committees having jurisdiction over transportation matters shall schedule a hearing on the report not more than 30 days following distribution of the report by the chief clerks of the senate and the assembly. This paragraph does not apply to projects awarded after December 31, 2026.

AB820,11 Section 11 . 84.062 (3) of the statutes is created to read:

AB820,4,19 84.062 (3) Technical review committee. (a) The secretary shall appoint 5 individuals to a technical review committee to evaluate proposals submitted under this section. The committee shall consist of the following:

AB820,4,20 1. Three employees of the department.

AB820,4,24 2. Two individuals who are not employees of the department and who are chosen in compliance with a memorandum of understanding entered into by the department with a state association of architectural, engineering, or design companies and a state association of transportation construction companies.

AB820,5,5 (b) The secretary may not appoint to the technical review committee any person associated, as defined in s. 19.42 (2), with a design-builder. No person appointed to the technical review committee may review proposals under this section when the proposed project could benefit the appointee or the appointee's immediate family, as defined in s. 19.42 (7).

AB820,5,7 (c) A person appointed to the technical review committee is an agent of the department under s. 895.46.

AB820,5,9 (d) Except as otherwise provided in this section, all records of the technical review committee are open to public inspection and copying under s. 19.35 (1).

AB820,12 Section 12 . 84.062 (4) of the statutes is created to read:

AB820,5,17 84.062 (4) Selection. The department shall solicit design-build proposals in 2 phases. In the first phase, the department shall solicit requests for qualifications under sub. (5) and requests for proposals under sub. (6). The technical review committee shall certify responsible bidders as provided in sub. (5) (c) and shall score technical proposals as provided in sub. (6) (b). In the 2nd phase, the department shall solicit cost proposals and the technical review committee shall evaluate cost proposals as provided in sub. (7).

AB820,13 Section 13 . 84.062 (5) (a) 1. a. of the statutes, as created by 2019 Wisconsin Act 9, is amended to read:

AB820,5,23 84.062 (5) (a) 1. a. The design and construction experience of the design-builder or member, personnel, and contractors who will manage the design, engineering, and construction aspects of the project. The department may not require a level of experience that will unreasonably restrict competition.

AB820,14 Section 14 . 84.062 (5) (a) 2. d. of the statutes, as created by 2019 Wisconsin Act 9, is repealed.

AB820,15 Section 15. 84.062 (5) (a) 2. f. of the statutes is created to read:

AB820,6,3 84.062 (5) (a) 2. f. The design-builder or a member has been in business for at least 12 months.

AB820,16 Section 16 . 84.062 (5) (a) 2. h. of the statutes, as created by 2019 Wisconsin Act 9, is amended to read:

AB820,6,8 84.062 (5) (a) 2. h. The design-builder can provide information to the technical review committee upon request about ownership, management, and control of the design-builder.

AB820,17 Section 17 . 84.062 (5) (a) 2. i. of the statutes, as created by 2019 Wisconsin Act 9, is amended to read:

AB820,6,13 84.062 (5) (a) 2. i. The design-builder or a member has not been debarred from any government contracts and has not been found to have committed tax avoidance or evasion in any jurisdiction in the previous 10 5 years.

AB820,18 Section 18 . 84.062 (5) (a) 2. k. of the statutes, as created by 2019 Wisconsin Act 9, is amended to read:

AB820,6,20 84.062 (5) (a) 2. k. No design professional employed by the design-builder or a member or who is assigned to the design-build project and no design professional that the design-builder will contract with for the design-build project has been disciplined in any jurisdiction in the previous 5 years under a license that is currently in use.

AB820,19 Section 19 . 84.062 (5) (b) of the statutes, as created by 2019 Wisconsin Act 9, is amended to read:

AB820,6,24 84.062 (5) (b) The office department shall advertise the request for qualifications.

AB820,20 Section 20 . 84.062 (5) (c) of the statutes is created to read:

AB820,7,5 84.062 (5) (c) The technical review committee shall certify at least 2 but not more than 5 design-builders as qualified responsible bidders. If the department does not receive at least 2 responses to the request for qualifications or if the technical review committee certifies only one design-builder as a qualified responsible bidder, the department may re-advertise or cancel the project.

AB820,21 Section 21 . 84.062 (5) (d) of the statutes is created to read:

AB820,7,9 84.062 (5) (d) In making determinations under this subsection, the technical review committee may not consider whether a design-builder or member exercised legal rights specified in statute or rule or under a contract with the department.

AB820,22 Section 22 . 84.062 (6) (a) 11. of the statutes, as created by 2019 Wisconsin Act 9, is amended to read:

AB820,7,12 84.062 (6) (a) 11. Amount of stipend, if any.

AB820,23 Section 23 . 84.062 (6) (a) 14. of the statutes is created to read:

AB820,7,17 84.062 (6) (a) 14. A requirement that the design-builder perform not less than 30 percent of the construction services under the contract with labor provided by employees of the design-builder or member and equipment owned or rented by the design-builder or member.

AB820,24 Section 24 . 84.062 (6) (b) of the statutes is created to read:

AB820,7,21 84.062 (6) (b) The technical review committee shall evaluate each technical proposal, which may include a confidential interview, and shall assign points in accordance with the request for proposals and subject to all of the following:

AB820,7,25 1. For a project that will be awarded as either a low bid design-build contract or a fixed price variable scope design-build contract, the technical review committee shall determine whether technical proposals are responsive to the request for proposals without ranking or scoring the proposals.

AB820,8,10 2. For a project that will be awarded as a best value design-build contract, the technical review committee shall determine whether technical proposals are responsive to the request for proposals and score each responsive technical proposal as required by the request for proposals. The technical review committee may award not more than 20 percent of the points awarded to a technical proposal based on the design-builder's qualifications and ability to design, contract, and deliver the project in accordance with any deadline established in the request for proposals. The technical review committee may award a technical proposal not less than 25 percent and not more than 60 percent of the maximum number of combined points that may be awarded to a technical proposal and cost proposal.

AB820,25 Section 25 . 84.062 (6) (c) of the statutes is created to read:

AB820,8,15 84.062 (6) (c) The department shall allow design-builders to include alternative technical concepts and value engineering changes in their proposals by describing the process for submission and evaluation of alternative technical concepts and value engineering changes in the request for proposals.

AB820,26 Section 26 . 84.062 (6) (d) of the statutes is created to read:

AB820,8,22 84.062 (6) (d) The technical review committee may not consider a proposal responsive unless the proposal includes a conceptual design, critical path method, bar schedule of the work to be performed or similar schematic, design plans and specifications, technical reports, and all other information required by the request for proposals. The technical review committee may not consider any price or fee included in the technical proposal.

AB820,27 Section 27 . 84.062 (6) (e) of the statutes is created to read:

AB820,9,2 84.062 (6) (e) The department shall notify the design-builder for each proposal that is determined to be responsive under par. (b) that the design-builder may submit a cost proposal under par. (7). The department shall reject all proposals that are determined to be nonresponsive under par. (b).

AB820,28 Section 28 . 84.062 (6) (f) of the statutes, as created by 2019 Wisconsin Act 9, is renumbered 84.062 (7) (f).

AB820,29 Section 29 . 84.062 (7) of the statutes is created to read:

AB820,9,10 84.062 (7) Cost proposals. (a) Design-builders notified under sub. (6) (e) may submit a cost proposal and the proposal shall include a fixed cost of design, engineering, and construction services prepared by a design professional that contains all design, engineering, construction, and quality assurance and quality control costs of the project.

AB820,9,16 (b) The technical review committee may open cost proposals only after the technical proposals have been reviewed as provided in sub. (6). At the time and place specified in the request for proposals, the technical review committee shall open cost proposals, read the proposals aloud, and, for a project that will be awarded as a best value design-build contract, make public the committee's scoring of the technical proposals.

AB820,9,18 (c) Following a review of cost proposals, the department may issue a notice of intent to award a contract, subject to all of the following:

AB820,9,21 1. For a low bid design-build contract, the contract shall be awarded to the qualified responsible bidder that submitted a responsive technical proposal and also submitted the lowest responsive cost proposal.

AB820,9,24 2. For a fixed price variable scope design-build contract, the contract shall be awarded to the qualified responsible bidder that submitted a responsive technical proposal and that submitted a responsive cost proposal that provides the maximum amount of services for the maximum fixed price set by the department or for an amount that is less than the maximum fixed price.

AB820,10,14 3. For a best value design-build contract, the contract shall be awarded to the qualified responsible bidder with the highest adjusted score, which shall be calculated by adding the bidder's technical proposal score to the bidder's cost proposal score. The technical review committee shall award the lowest qualified responsible bidder the maximum number of points that may be awarded to a cost proposal under the request for proposals, but not less than 40 percent and not more than 75 percent of the maximum number of combined points that shall be awarded to a technical proposal and cost proposal. For each remaining qualified responsible bidder, the technical review committee shall calculate the score for the cost proposal by reducing the maximum number of points that may be awarded to the cost proposal by 1 percent for each percentage point by which the cost proposal exceeds the lowest cost proposal.

AB820,10,23 (d) Following a review of cost proposals, the department may reject all proposals. If the department rejects all proposals or does not execute a contract after issuing an intent to award a contract under par. (c), the department may reissue the request for proposals and allow only the qualified responsible bidders originally notified under sub. (6) (e) to submit new proposals. The department shall pay a reasonable stipulated fee to each design-builder that provides a responsive but unsuccessful proposal in response to the reissued request for proposals. If the reissued request for proposals specifies a maximum fixed price, the department may not award a stipend to a design-builder whose proposal exceeds that price.

AB820,11,3 (e) Not less than 5 working days prior to executing a design-build contract, the department shall provide notice to each unsuccessful qualified responsible bidder that a notice of intent to award a contract has been issued.

AB820,30 Section 30 . 84.062 (8) of the statutes is created to read:

AB820,11,5 84.062 (8) Contract award. (a) In this subsection:

AB820,11,8 1. “Construction services” means work necessary to construct a project, including trucking services and materials purchased regardless of whether the materials are installed by the design-builder.

AB820,11,11 2. “Specialty services” means work related to sanitary sewer systems, water main systems, staking, electrical, landscaping and erosion control, traffic control, signing, pavement marking, fencing, and other work identified by the department.

AB820,11,16 (b) No later than 10 days following the issuance of a notice of intent to award a design-build contract, the department shall verify that the design-builder will perform not less than 30 percent of the construction services under the contract with labor provided by employees of the design-builder or member and equipment owned or rented by the design-builder or member.

AB820,11,19 (c) The design-builder shall submit to the department in the form prescribed by the department documentation of the construction services the design-builder or members will perform and the dollar value of the services.

AB820,12,2 (d) The department shall calculate the percentage of total construction services identified in the contract to be performed by the design-builder or members by subtracting the value of specialty services to be performed from the total contract amount and dividing the dollar value of construction services to be performed by the design-builder or members by the difference. If the value of construction services to be performed by the design-builder or members is less than 30 percent of the value of all construction services required under the contract, the department shall cancel the contract award.

AB820,31 Section 31 . 84.062 (11) of the statutes is created to read:

AB820,12,6 84.062 (11) Stipulated fee. (a) The department shall award a stipulated fee of not less than three-tenths of 1 percent of the department's estimated cost of design and construction as follows:

AB820,12,10 1. To each qualified responsible bidder that provides a responsive but unsuccessful proposal when the department issues a notice of intent to award a contract. If the request for proposals specifies a maximum fixed price, the department may not award a fee to a proposal that exceeds the maximum fixed price.

AB820,12,12 2. To all qualified responsible bidders that provide a responsive proposal, if the department does not issue a notice of intent to award a contract.