PRINTER'S NO. 1460
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1327
Session of
2023
INTRODUCED BY STRUZZI, GROVE, JAMES, KEEFER AND SMITH,
JUNE 6, 2023
REFERRED TO COMMITTEE ON TRANSPORTATION, JUNE 6, 2023
AN ACT
Amending Title 62 (Procurement) of the Pennsylvania Consolidated
Statutes, in source selection and contract formation, further
providing for definitions and for methods of source selection
and providing for design build best value process and
establishing the Design Build Advisory Committee.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 501 of Title 62 of the Pennsylvania
Consolidated Statutes is amended by adding definitions to read:
§ 501. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Complex project." A stand-alone construction project:
(1) with an estimated construction value greater than
$15,000,000;
(2) planned by the Department of Transportation or
Pennsylvania Turnpike Commission; and
(3) that has unique characteristics that foster
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innovation or a need for accelerated completion where using
the design build best value process under section 513.1
(relating to design build best value process) would be more
advantageous to the Commonwealth than competitive sealed
bidding.
"Design build best value." The procurement process described
in section 513.1 that is used by the Department of
Transportation or Pennsylvania Turnpike Commission as an
alternative to competitive sealed bidding.
* * *
"Responsive proposer." A design-build entity that submits a
statement of qualifications:
(1) in response to a request for qualifications issued
by the Department of Transportation or Pennsylvania Turnpike
Commission; and
(2) that meets the minimum requirements under section
513.1(f)(1).
Section 2. Section 511 of Title 62 is amended to read:
§ 511. Methods of source selection.
Unless otherwise authorized by law, all Commonwealth agency
contracts shall be awarded by competitive sealed bidding under
section 512 (relating to competitive sealed bidding) except as
provided in:
Section 512.1 (relating to competitive electronic auction
bidding).
Section 513 (relating to competitive sealed proposals).
Section 513.1 (relating to design build best value process).
Section 514 (relating to small procurements).
Section 515 (relating to sole source procurement).
Section 516 (relating to emergency procurement).
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Section 517 (relating to multiple awards).
Section 518 (relating to competitive selection procedures for
certain services).
Section 519 (relating to selection procedure for insurance
and notary bonds).
Section 520 (relating to supplies manufactured and services
performed by persons with disabilities).
Section 905 (relating to procurement of design professional
services).
Section 3. Title 62 is amended by adding a section to read:
§ 513.1. Design build best value process.
(a) General rule.--Notwithstanding any other provision of
this chapter, an agency may use the design build best value
procurement process on construction projects in the limited
circumstances described in this section.
(b) Conditions for use.--
(1) Design build best value may only be used:
(i) When a construction project is identified as a
complex project by an agency's innovative contracting
division, except a construction project procured under 74
Pa.C.S. Ch. 91 (relating to public-private transportation
partnerships).
(ii) After an agency establishes a project selection
matrix and an innovative contracting division as
described in subsections (c) and (d).
(2) All other agency construction projects shall be
procured through a competitive sealed bidding process as
described in section 512 (relating to competitive sealed
bidding).
(3) An agency shall develop a policy to determine
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whether a project is a complex project. The policy shall be
available on the agency's publicly accessible Internet
website.
(c) Project selection matrix.--
(1) In accordance with subsection (d), an agency's
innovative contracting division shall establish a project
selection matrix to thoroughly evaluate a potential
construction project for consideration as a complex project.
(2) In addition to the minimum construction cost, an
agency's innovative contracting division shall consider the
following when creating a project selection matrix to
determine if design build best value would be advantageous to
the Commonwealth:
(i) Project complexity.
(ii) Potential for innovation.
(iii) Unique equipment or specialized systems.
(iv) Project risks.
(v) Project schedule.
(vi) Other project considerations.
(d) Innovative contracting division.--An agency shall
establish an innovative contracting division that shall:
(1) Develop a project selection matrix in accordance
with subsection (c).
(2) Evaluate and determine if a project is a complex
project according to the policy developed under subsection
(b)(3).
(3) Develop rules and policies relating to the use of
design build best value.
(4) Provide oversight on the steps of the design build
best value process under this section.
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(5) Appoint selection committees under subsection (k).
(6) Hold debriefing sessions as required under
subsection (l).
(7) Provide oversight and assistance in administering
the awarded design build best value contract.
(e) Public notice and request for qualifications.--
(1) Within a reasonable time prior to the date set for
opening of responses, an agency shall provide adequate public
notice of the request for qualifications.
(2) An agency may publish written policies and
promulgate regulations as necessary relating to methods of
public notice.
(3) An agency shall make available, upon request of an
interested party, copies of a request for qualifications.
(4) The public notice shall, at a minimum, contain:
(i) A detailed description of the project for which
the agency seeks statements of qualifications.
(ii) A general description of design parameters and
requirements.
(iii) The agency's nonbinding cost estimate.
(iv) A description of contractual documents that the
agency requires.
(v) In accordance with subsection (f)(2), the
specific criteria for scoring and selection, including
the minimum requirements a construction firm must achieve
to be considered a responsive proposer.
(vi) The amount of the stipend for a nonsuccessful,
short-listed offeror under subsection (g).
(f) Statement of qualifications and short-list process.--
(1) A statement of qualifications received by an agency
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from a responsive proposer shall be scored by a selection
committee established under subsection (k).
(2) In scoring a statement of qualifications, the
selection committee shall consider the following criteria:
(i) Similar projects designed by the responsive
proposer.
(ii) Similar construction projects constructed by
the responsive proposer.
(iii) Qualifications of individuals who the
responsive proposer intends to assign to the project.
(3) The selection committee may consider the following
criteria:
(i) The approach that a responsive proposer takes to
design build best value projects generally.
(ii) An overview of the approach that the responsive
proposer intends to use for the proposed project for the
agency.
(iii) How the responsive proposer intends to address
the risks that may occur on the proposed project.
(iv) Other unique factors relevant to the selection
of a responsive proposer as identified by the selection
committee.
(4) Criteria under paragraph (1) used for a complex
project and the weight of the criteria shall be published in
the public notice for a request for qualifications.
(5) The selection committee shall score and rank, from
highest score to lowest score, the statements of
qualification.
(6) After the statements of qualification are ranked
under paragraph (5), the selection committee shall develop a
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short list of at least three, but no more than five,
responsive proposers before proceeding.
(7) If three or fewer responsive proposers submit a
statement of qualifications:
(i) the responsive proposers shall be shortlisted;
(ii) the agency may reissue the request for
qualification with public notice; or
(iii) the agency may proceed with the project under
the competitive sealed proposal process.
(8) The agency shall publicly post a list of all
responsive proposers and the total score for each responsive
proposer and identify the responsive proposers that have been
shortlisted.
(g) Stipend for nonselected shortlisted responsive
proposers.--
(1) A responsive proposer shortlisted under subsection
(f)(6) that submits a responsive technical and price proposal
and is not awarded a design build best value contract shall
receive a stipend in an amount to be determined by the agency
for participation in the process.
(2) The stipend shall be paid by the contracting agency
within 45 days after award of the design build best value
contract.
(3) In the event the agency cancels a request for
qualification following the development of the short list,
but prior to the date of the opening of technical and price
proposals, the shortlisted responsive proposers shall receive
a prorated share of the stipend based on the prorated time
period originally established for the time for shortlisted
responsive proposers to submit technical and price proposals.
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(4) If the agency cancels the request for proposals
process following the receipt of the technical and price
proposals, a shortlisted responsive proposer shall receive
the entire stipend within 45 days of the cancellation.
(5) An offeror that submitted a statement of
qualifications under the request for qualifications process
and was not shortlisted by the agency, may not receive a
stipend, but is eligible to submit proposals under the
request for proposals process.
(6) A design-build entity that did not submit a
statement of qualifications under subsection (f) shall not be
eligible to submit a request for proposals under subsection
(h).
(h) Request for proposals.--
(1) Following the development of a short list and to the
extent that an agency is satisfied with the number of
responsive proposers, the agency shall issue a formal request
for proposals to a responsive proposer.
(2) An agency shall allow at least 20 weeks following
the publication of the short list for a responsive proposer
to submit a proposal.
(3) In addition to the information contained in the
original statement of qualifications, the request for
proposals shall contain a more detailed proposed contract
that includes both negotiable and nonnegotiable terms.
(4) In addition to paragraph (3), a request for
proposals shall include:
(i) Project goals.
(ii) Design and construction criteria.
(iii) When feasible, a project design that is
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approximately 30% complete.
(iv) Known utility information.
(v) Right-of-way status.
(vi) Quality assurance and quality control
requirements.
(vii) Diverse business or disadvantaged business
enterprise requirements.
(viii) Available geotechnical information.
(ix) Status of environmental review and permitting.
(x) Detailed instructions for technical proposals.
(xi) Evaluation criteria.
(xii) Scoring as described under subsection (f).
(5) A request for proposals shall include separate
proposals for a technical solution, to be known as the
technical proposal, and the proposed price, to be known as
the price proposal.
(6) The request for proposals shall include a
requirement that a responsive proposer, if not shortlisted,
has a defined time frame to inform the selection committee
that the responsive proposer intends to submit a technical
and price proposal.
(i) Criteria for selection.--
(1) After receipt of all technical and price proposals,
the selection committee shall evaluate each submission. The
technical and price proposals shall be evaluated and scored
separately. A price proposal shall not be opened until all
technical proposals are scored.
(2) Technical proposals shall include:
(i) Project-specific management approaches relating
to construction and design.
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(ii) How the responsive proposer intends to meet
schedules.
(iii) Project challenges and innovative solutions.
(iv) The conceptual design proposed.
(3) In accordance with paragraph (7), for each project,
the agency shall develop a methodology for scoring technical
and price proposals and publish the methodology in the
request for proposals. The methodology may not be changed
following receipt of the request for proposals.
(4) Diverse business or disadvantaged business
enterprise participation requirements may not be considered
as part of the technical proposal score. Such requirements
will be treated separately.
(5) Failure of a responsive proposer to meet the
requirements of a request for proposal, technical proposal or
price proposal shall result in the proposal being deemed
nonresponsive.
(6) The criteria that may be considered by an agency in
reviewing a technical proposal include:
(i) Compliance with applicable technical
specifications and required design parameters.
(ii) Ability to achieve project goals.
(iii) Innovative solutions.
(iv) Design and construction approach.
(v) Work plan.
(vi) Project management, including quality, safety,
mobility and environmental.
(vii) Other unique factors relevant to the project.
(7) Technical and price proposals shall be ranked in
accordance with the following scoring methodology:
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(i) Price proposals shall constitute no less than
50% of the score.
(ii) The technical proposal shall constitute the
remainder of the score. In calculating the technical
score, the agency shall consider the criteria listed in
this subsection and use the scores from the request for
qualifications process. The scores from the request for
qualifications process shall constitute between 10% and
20% of the technical score.
(j) Maximum transparency.--
(1) It is the intent of the General Assembly that all
decisions made for solicitations and awards under this
section shall be subject to complete transparency.
(2) An agency must open and evaluate proposals without
disclosing the contents to a competing responsive proposer.
After the agency identifies a selected responsive proposer as
the highest-scoring bidder, the agency shall publish the
rationale for scoring all proposals.
(3) Following execution of a contract, the agency shall
make available all technical and price proposals received by
the agency.
(k) Selection committee.--
(1) The innovative contracting division of an agency
shall establish two separate selection committees for a
complex project to be procured by the design build best value
process.
(2) A selection committee for the request for
qualifications stage shall consist of at least three
individuals employed by the agency, at least one of whom must
be a member of the innovative contracting division.
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(3) The innovative contracting division shall appoint
one selection committee to evaluate proposals submitted in
response to the request for proposals. The committee selected
to review requests for proposals shall consist of at least
five employees of the agency. At least one of the employees
must be a representative of the innovative contracting
division.
(4) The agency may engage consultants and advisors to
assist in review of technical proposals. Consultants may not
be committee members or participate in deliberations or
scoring of the technical proposals.
(l) Debriefing.--
(1) The agency shall individually conduct a debriefing
conference with a responsive proposer that was shortlisted
but not selected.
(2) The debriefing conference shall be scheduled within
15 days from the date of the determination of the selected
responsive proposer.
(3) During a debriefing conference, the agency shall
discuss the contents of the nonselected responsive proposer
proposal and the reasons another proposal was selected.
(m) Bid process.--
(1) Consistent with Chapter 17 (relating to legal and
contractual remedies), a responsive proposer that is
aggrieved in connection with the solicitation or award of a
contract under this section may file a written protest with
the agency.
(2) A responsive proposer may file a protest under
paragraph (1) within seven days after the debriefing
conference held under subsection (l).
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(n) Design Build Advisory Committee.--
(1) The Design Build Advisory Committee is established
within the department. The advisory committee shall consist
of:
(i) The Secretary of Transportation or a designee.
(ii) The Pennsylvania Turnpike Commission chief
executive officer or a designee.
(iii) One public member appointed by the President
pro tempore of the Senate.
(iv) One public member appointed by the Minority
Leader of the Senate.
(v) One public member appointed by the Speaker of
the House of Representatives.
(vi) One public member appointed by the Minority
Leader of the House of Representatives.
(vii) The following members appointed by the
Governor representing transportation, construction and
engineering companies operating in this Commonwealth:
(A) One member representing prime contractors.
(B) One member representing subcontractors.
(C) One member representing engineers.
(D) One member representing material suppliers.
(E) One member representing diverse businesses.
(2) The members of the advisory committee shall annually
elect a chair, a vice chair and a secretary from among the
public members.
(3) The following shall apply to meetings and expenses:
(i) The advisory committee shall meet at least
quarterly.
(ii) A public member who misses three consecutive
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meetings without good cause may be replaced by the
Secretary of Transportation upon recommendation of the
chair.
(iii) The public members shall be allowed actual,
necessary and reasonable per diem expenses in accordance
with regulations of the department.
(4) The department shall provide appropriate staff
support to enable the advisory committee.
(5) The advisory committee shall provide:
(i) Guidance and oversight to an agency to utilize
the design build best value process for procurement.
(ii) Open communication between an agency and
industry with respect to a mutual interest in improving
and enhancing design build best value procurement in this
Commonwealth.
(o) Report.--The advisory committee shall provide an annual
report to the General Assembly.
(p) Regulations.--The department shall promulgate rules and
regulations to effectuate the provisions of this section.
(q) Limitation of use.--The procurement process described in
this section shall be limited to a project or projects for which
cumulative annual expenditures during the project's or projects'
duration do not exceed more than 15% of the Department of
Transportation's or Pennsylvania Turnpike Commission's annual
capital program.
(r) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Advisory committee." The Design Build Advisory Committee
established in this section.
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"Agency." The Department of Transportation or Pennsylvania
Turnpike Commission.
"Statement of qualifications." A design-build entity's
response to an agency, after the agency issues a request for
qualifications.
Section 4. This act shall take effect in 90 days.
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