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sb262_05_EN
(136th General Assembly)
(Amended
Senate Bill Number 262)
AN ACT
To amend sections 9.334, 153.12,
153.501, 153.503, and 153.693 of the Revised Code to require a public
authority or other party to a construction contract to note
variations from an industry standard form.
Be
it enacted by the General Assembly of the State of Ohio:
Section
1.
That
sections 9.334, 153.12, 153.501, 153.503, and 153.693 of the Revised
Code be amended to read as follows:
Sec.
9.334.
(A)(1)
Every public authority planning to contract for construction
management services with a construction manager at risk shall
evaluate the proposals submitted and select not fewer than three
construction managers at risk the public authority considers to be
the most qualified to provide the required construction management
services, except that the public authority shall select and rank
fewer than three when the public authority determines in writing that
fewer than three qualified construction managers at risk are
available.
(2)
For projects valued at less than four million dollars, the public
authority may require the construction manager at risk to submit a
proposal described in division (A)(1) of this section along with a
pricing proposal described in division (C) of this section. The
public authority shall provide each construction manager at risk who
desires to submit a proposal under this division a pre-proposal
meeting to explore the proposals further, in which the public
authority shall provide the construction manager at risk with a
description of the project, including the scope and nature of the
proposed services and potential technical approaches. The public
authority shall proceed with selection and ranking as described in
division (A)(1) of this section, based only on the proposal submitted
under that division. Once the construction managers at risk have been
selected, the public authority shall proceed to evaluate the pricing
proposals of each selected construction manager at risk as described
in division (D) of this section, continuing the selection process
from there.
(B)
(B)(1)
The public authority shall provide each construction manager at risk
selected under division (A) of this section with a description of the
project, including a statement of available design detail, a
description of how the guaranteed maximum price for the project shall
be determined, including the estimated level of design detail upon
which the guaranteed maximum price shall be based, the form of the
construction management contract, and a request for a pricing
proposal.
(2)
When utilizing an industry standard published construction management
contract form, the public authority shall provide the contract form
in a manner that indicates any alteration to the standard form by
striking through and underlining any changes to the original language
of the standard form
,
by
cross-referencing conditions that are supplemental to the standard
form
,
or by including conditions that are supplemental to the standard form
that cross-reference the section or sections of the standard form
being altered
.
Failure to indicate an alteration to the original language of the
standard form in the manner required above results in the alteration
being void and without effect such that the original language
prevails.
(C)
The pricing proposal of each construction manager at risk shall
include at least the following regarding the construction manager at
risk:
(1)
A list of key personnel for the project;
(2)
A statement of the general conditions and contingency requirements;
(3)
A fee proposal divided into a preconstruction fee, a construction
fee, and the portion of the construction fee to be at risk in a
guaranteed maximum price.
(D)
The public authority shall evaluate the submitted pricing proposals
and may hold discussions with individual construction managers at
risk to explore their proposals further, including the scope and
nature of the proposed services and potential technical approaches.
(E)
After evaluating the pricing proposals, the public authority shall
rank the selected construction managers at risk based on its
evaluation of the value of each pricing proposal, with such
evaluation considering the proposed cost and qualifications.
(F)
The public authority shall enter into negotiations for a construction
management contract with the construction manager at risk whose
pricing proposal the public authority determines to be the best value
under division (E) of this section. Contract negotiations shall be
directed toward:
(1)
Ensuring that the construction manager at risk and the public
authority mutually understand the essential requirements involved in
providing the required construction management services, including
the provisions for the use of contingency funds and the possible
distribution of savings in the final costs of the project;
(2)
Ensuring that the construction manager at risk will be able to
provide the necessary personnel, equipment, and facilities to perform
the construction management services within the time required by the
construction management contract;
(3)
Agreeing upon a procedure and schedule for determining a guaranteed
maximum price using an open book pricing method that shall represent
the total maximum amount to be paid by the public authority to the
construction manager at risk for the project and that shall include
the costs of all the work, the cost of its general conditions, the
contingency, and the fee payable to the construction manager at risk.
(G)(1)
If the public authority fails to negotiate a construction management
contract with the construction manager at risk whose pricing proposal
the public authority determines to be the best value under division
(E) of this section, the public authority shall inform the
construction manager at risk, in writing, of the termination of
negotiations.
(2)
Upon terminating negotiations, the public authority may enter into
negotiations as provided in this section with the construction
manager at risk that the public authority ranked next highest under
division (E) of this section. If negotiations fail, the public
authority may enter into negotiations as provided in this section
with the construction manager at risk the public authority ranked
next highest under division (E) of this section.
(3)
If a public authority fails to negotiate a construction management
contract with a construction manager at risk whose pricing proposal
the public authority determines to be the best value under division
(E) of this section, the public authority may select additional
construction managers at risk to provide pricing proposals to the
public authority pursuant to this section or may select an
alternative delivery method for the project.
(H)
If the public authority and construction manager at risk fail to
agree on a guaranteed maximum price, nothing in this section shall
prohibit the public authority from allowing the construction manager
at risk to provide the management services that a construction
manager is authorized to provide.
(I)
Nothing in this section affects a public authority's right to accept
or reject any or all proposals in whole or in part.
Sec.
153.12.
(A)
With respect to award of any contract for the construction,
reconstruction, improvement, enlargement, alteration, repair,
painting, or decoration of a public improvement made by the state, or
any county, township, municipal corporation, school district, or
other political subdivision, or any public board, commission,
authority, instrumentality, or special purpose district of or in the
state or a political subdivision or that is authorized by state law,
the award, and execution of the contract, shall be made within sixty
days after the date on which the bids are opened. The failure to
award and execute the contract within sixty days invalidates the
entire bid proceedings and all bids submitted, unless the time for
awarding and executing the contract is extended by mutual consent of
the owner or its representatives and the bidder whose bid the owner
accepts and with respect to whom the owner subsequently awards and
executes a contract. The public owners referred to in this section
shall include, in the plans and specifications for the project for
which bids are solicited, the estimate of cost. The bid for which the
award is to be made shall be opened at the time and place named in
the advertisement for bids, unless extended by the owner or its
representative or unless, within seventy-two hours prior to the
published time for the opening of bids, excluding Saturdays, Sundays,
and legal holidays, any modification of the plans or specifications
and estimates of cost for the project for which bids are solicited is
issued and mailed or otherwise furnished to persons who have obtained
plans or specifications for the project, for which the time for
opening of bids shall be extended one week, with no further
advertising of bids required. The contractor, upon request, is
entitled to a notice to proceed with the work by the owner or its
representative upon execution of the contract. No contract to which
this section applies shall be entered into if the price of the
contract, or, if the project involves multiple contracts where the
total price of all contracts for the project, is in excess of ten per
cent, in the case of a contract made by the state or a public board,
commission, authority, or instrumentality of the state, or twenty per
cent, in the case of a contract made by a county, township, municipal
corporation, school district, special purpose district, or other
political subdivision or a public board, commission, authority, or
instrumentality of the political subdivision, above the entire
estimate thereof, nor shall the entire cost of the construction,
reconstruction, repair, painting, decorating, improvement,
alteration, addition, or installation, including changes and
estimates of expenses for architects or engineers, exceed in the
aggregate the amount authorized by law.
The
unit or lump sum price stated in the contract shall be used in
determining the amount to be paid and shall constitute full and final
compensation for all the work.
Partial
payment to the contractor for work performed under the lump sum price
shall be based on a schedule prepared by the contractor and approved
by the architect or engineer who shall apportion the lump sum price
to the major components entering into or forming a part of the work
under the lump sum price.
Partial
payments to the contractor for labor performed under either a unit or
lump sum price contract shall be made at a rate of not less than
ninety-six per cent of the estimates prepared by the contractor and
approved by the architect or engineer. No subcontract shall be paid
at a rate lower than the rate being paid to the contractor by the
public authority.
The
amounts and time of payments of any public improvements contract made
by the state or any county, township, municipal corporation, school
district, or other political subdivision, or any public board,
commission, authority, instrumentality, or special purpose district
of or in the state or a political subdivision or that is authorized
by state law, except as provided in section 5525.19 of the Revised
Code, shall be governed by this section and sections 153.13 and
153.14 of the Revised Code. If the time for awarding the contract is
extended by mutual consent, or if the owner or its representative
fails to issue a timely notice to proceed as required by this
section, the owner or its representative shall issue a change order
authorizing delay costs to the contractor, which does not invalidate
the contract. The amount of such a change order to the owner shall be
determined in accordance with the provisions of the contract for
change orders or force accounts or, if no such provision is set forth
in the contract, the cost to the owner shall be the contractor's
actual costs including wages, labor costs other than wages, wage
taxes, materials, equipment costs and rentals, insurance, and
subcontracts attributable to the delay, plus a reasonable sum for
overhead. In the event of a dispute between the owner and the
contractor concerning such change order, procedures shall be
commenced under the applicable terms of the contract, or, if the
contract contains no provision for resolving the dispute, it shall be
resolved pursuant to the procedures for arbitration in Chapter 2711.
of the Revised Code, except as provided in division (B) of this
section. Nothing in this division shall be construed as a limitation
upon the authority of the director of transportation granted in
Chapter 5525. of the Revised Code.
(B)
If a dispute arises between the state and a contractor concerning the
terms of a public improvement contract let by the state or concerning
a breach of the contract, and after administrative remedies provided
for in such contract and any alternative dispute resolution
procedures provided in accordance with guidelines established by the
executive director of the Ohio facilities construction commission are
exhausted, the contractor may bring an action to the court of claims
in accordance with Chapter 2743. of the Revised Code. The state or
the contractor may request the chief justice of the supreme court to
appoint a referee or panel of referees in accordance with division
(C)(3) of section 2743.03 of the Revised Code. As used in this
division, "dispute" means a disagreement between the state
and the contractor concerning a public improvement contract let by
the state.
(C)
When utilizing an industry standard published construction management
contract form, the public authority shall provide the contract form
in a manner that indicates any alteration to the standard form by
striking through and underlining any changes to the original language
of the standard form
,
by
cross-referencing conditions that are supplemental to the standard
form
,
or by including conditions that are supplemental to the standard form
that cross-reference the section or sections of the standard form
being altered
.
Failure to indicate an alteration to the original language of the
standard form in the manner required above results in the alteration
being void and without effect such that the original language
prevails.
Sec.
153.501.
(A)
A public authority may accept a subcontract awarded by a construction
manager at risk, a design-build firm, or a general contracting firm,
or may reject any such subcontract if the public authority determines
that the bidder is not responsible.
When
utilizing an industry standard published construction management
contract form, the public authority shall provide the contract form
in a manner that indicates any alteration to the standard form by
striking through and underlining any changes to the original language
of the standard form
,
by
cross-referencing conditions that are supplemental to the standard
form
,
or by including conditions that are supplemental to the standard form
that cross-reference the section or sections of the standard form
being altered
.
Failure to indicate an alteration to the original language of the
standard form in the manner required above results in the alteration
being void and without effect such that the original language
prevails.
(B)
A public authority may authorize a construction manager at risk or
design-build firm to utilize a design-assist firm on any public
improvement project without transferring any design liability to the
design-assist firm.
(C)
If the construction manager at risk or design-build firm intends and
is permitted by the public authority to self-perform a portion of the
work to be performed, the construction manager at risk or
design-build firm shall submit a sealed bid to the public authority
for the portion of the work prior to accepting and opening any bids
for the same work, except when the public authority requests a
guaranteed maximum price proposal due at the time of selection.
Sec.
153.503.
(A)
The
Ohio facilities construction commission, pursuant to Chapter 119. of
the Revised Code, shall adopt rules to do all of the following:
(A)
(1)
Prescribe the procedures and criteria for determining the best value
selection of a construction manager at risk or design-build firm;
(B)
(2)
Set forth standards to be followed by construction managers at risk
and design-build firms when establishing prequalification criteria
pursuant to section 153.502 of the Revised Code;
(C)
(3)
Prescribe the form for the contract documents to be used by a
construction manager at risk, design-build firm, or general
contractor when entering into a subcontract;
(D)
(4)
Prescribe the form for the contract documents to be used by a public
authority when entering into a contract with a construction manager
at risk or design-build firm.
(B)
The rules adopted under divisions (A)(3) and (4) of this section
shall include a requirement that a public authority, construction
manager at risk, design-build firm, or general contracting firm
utilizing a prescribed industry standard published contract or
subcontract form shall provide the form in a manner that indicates
any alteration to the standard form by striking through and
underlining any changes to the original language of the standard
form
,
by
cross-referencing conditions that are supplemental to the standard
form
,
or by including conditions that are supplemental to the standard form
that cross-reference the section or sections of the standard form
being altered
.
Failure to indicate an alteration to the original language of the
standard form in the manner required above results in the alteration
being void and without effect such that the original language
prevails.
Sec.
153.693.
(A)(1)
For every design-build contract, the public authority planning to
contract for design-build services, in consultation with the criteria
architect or engineer, shall evaluate the statements of
qualifications submitted by design-build firms specifically regarding
the project, including the design-build firm's proposed architect or
engineer of record.
(2)
For projects valued at less than four million dollars, the public
authority may require the design-build firm to submit a statement
along with a pricing proposal described in division (B)(2)(h) of this
section. The public authority shall provide each design-build firm
who desires to submit both a statement and a proposal a pre-proposal
meeting to explore the proposals further, in which the public
authority shall provide the design-build firm with a description of
the project, including the scope and nature of the proposed services
and potential technical approaches. After and only after the public
authority ranks and selects firms under division (B)(1) of this
section, the public authority shall review the pricing proposals
submitted by selected firms under this division, and proceed under
division (B)(3) of this section, continuing the selection process
from there.
(B)
Following this evaluation, the public authority shall:
(1)
Select and rank not fewer than three firms which it considers to be
the most qualified to provide the required design-build services,
except that the public authority shall select and rank fewer than
three firms when the public authority determines in writing that
fewer than three qualified firms are available;
(2)
Provide each selected design-build firm with all of the following:
(a)
A description of the project and project delivery;
(b)
The design criteria produced by the criteria architect or engineer
under section 153.692 of the Revised Code;
(c)
A preliminary project schedule;
(d)
A description of any preconstruction services;
(e)
A description of the proposed design services;
(f)
A description of a guaranteed maximum price, including the estimated
level of design on which such guaranteed maximum price is based;
(g)
The form of the design-build services contract
;
.
If using an industry standard published design-build services
contract form, the public authority shall provide the form in a
manner that indicates any alteration to the standard form by striking
through and underlining any changes to the original language of the
standard form
,
by
cross-referencing conditions that are supplemental to the standard
form
,
or by including conditions that are supplemental to the standard form
that cross-reference the section or sections of the standard form
being altered
.
If the public authority fails to indicate an alteration to the
original language of the standard form, the alteration is void and
without effect and the original language prevails.
(h)
Except for projects under division (A)(2) of this section, a request
for a pricing proposal that shall be divided into a design services
fee and a preconstruction and design-build services fee. The pricing
proposal of each design-build firm shall include at least all of the
following:
(i)
A list of key personnel and consultants for the project;
(ii)
Design concepts adhering to the design criteria produced by the
criteria architect or engineer under section 153.692 of the Revised
Code;
(iii)
The design-build firm's statement of general conditions and estimated
contingency requirements;
(iv)
A preliminary project schedule.
(3)
Evaluate the pricing proposal submitted by each selected firm and, at
its discretion, hold discussions with each firm to further
investigate its pricing proposal, including the scope and nature of
the firm's proposed services and potential technical approaches;
(4)
Rank the selected firms based on the public authority's evaluation of
the value of each firm's pricing proposal, with such evaluation
considering each firm's proposed costs and qualifications;
(5)
Enter into contract negotiations for design-build services with the
design-build firm whose pricing proposal the public authority
determines to be the best value under this section.
(C)
In complying with division (B)(5) of this section, contract
negotiations shall be directed toward:
(1)
Ensuring that the design-build firm and the public authority mutually
understand the essential requirements involved in providing the
required design-build services, the provisions for the use of
contingency funds, and the terms of the contract, including terms
related to the possible distribution of savings in the final costs of
the project;
(2)
Ensuring that the design-build firm shall be able to provide the
necessary personnel, equipment, and facilities to perform the
design-build services within the time required by the design-build
construction contract;
(3)
Agreeing upon a procedure and schedule for determining a guaranteed
maximum price using an open book pricing method that shall represent
the total maximum amount to be paid by the public authority to the
design-build firm for the project and that shall include the costs of
all work, the cost of its general conditions, the contingency, and
the fee payable to the design-build firm.
(D)
If the public authority fails to negotiate a contract with the
design-build firm whose pricing proposal the public authority
determines to be the best value as determined under this section, the
public authority shall inform the design-build firm in writing of the
termination of negotiations. The public authority may then do the
following:
(1)
Negotiate a contract with a design-build firm ranked next highest
under this section following the negotiation procedure described in
this section;
(2)
If negotiations fail with the design-build firm under division (D)(1)
of this section, negotiate a contract with the design-build firm
ranked next highest under this section following the negotiation
procedure described in this section and continue negotiating with the
design-build firms selected under this section in the order of their
ranking until a contract is negotiated.
(E)
If the public authority fails to negotiate a contract with a
design-build firm whose pricing proposal the public authority
determines to be the best value as determined under this section, it
may select additional design-build firms to provide pricing proposals
to the public authority pursuant to this section or may select an
alternative delivery method for the project.
(F)
The public authority may provide a stipend for pricing proposals
received from design-build firms.
(G)
Nothing in this section affects a public authority's right to accept
or reject any or all proposals in whole or in part.
Section
2.
That
existing sections 9.334, 153.12, 153.501, 153.503, and 153.693 of the
Revised Code are hereby repealed.
Section
3.
The
changes in sections 9.334, 153.501, 153.503, and 153.693 of the
Revised Code and division (C) of section 153.12 of the Revised Code
as amended by this act apply to a contract entered into on or after
the effective date of this section and do not apply to a contract
already in effect on the effective date of this section.
Speaker
___________________ of the House of Representatives.
President
___________________ of the Senate.
Passed
________________________, 20____
Approved
________________________, 20____
Governor.
The section numbering of law
of a general and permanent nature is complete and in conformity with
the Revised Code.
Director, Legislative
Service Commission.
Filed
in the office of the Secretary of State at Columbus, Ohio, on the
____ day of ___________, A. D. 20____.
Secretary of State.
File
No. _________ Effective Date ___________________