Long Version
CONSTRUCTION REFORM LEGISLATION
CHAPTER 193 OF THE ACTS OF 2004
SUMMARY OVERVIEW
Section 1 – definition in 38A ½ of public agency – includes every agency but State College Building Authority and UMASS Building Authority.
Section 2 – technical modifications to designer selection procedures.
Section 3 – allows awarding authorities to continue the feasibility study designer into the design phase.
Section 4 – this section bring further uniformity to the procedures for designer selection and design fee proposal submission requirements.
Section 5 – requires standard designer selection application form.
Section 6 – M/WBE Section. This provision declares a “history of discrimination” against M/WBEs, to establish the legal justification for the establishment of an “affirmative marketing program” for “capital facility projects”.
Section 7 - SOMWBA is responsible for management, monitoring, and enforcement of affirmative marketing program for M/WBEs on state assisted building projects.
- M/WBE program applies to DCAM’s capital facility projects and all building projects undertaken by public agencies that involve state funding.
- DCAM sets annual M/WBE “goal”. There will be a written procedure by which a public agency may, for an individual capital facility project, ask DCAM to adjust the goal based on: actual availability of MBE/WBEs in the area, scope of work, etc.
- DCAM authorized to develop a “good faith efforts waiver procedure” that will allow an agency to decide, at any time before award of a contract, that a good faith effort has been made to meet the goal but it is not feasible to meet the M/WBE goal.
Section 9 G.L.c.30
G.L.c. 30 Section 39M Projects – Bid Threshold Changes. This provision increases the dollar threshold for bidding small building construction projects under G.L.c. 30 section 39M, the public works bid law, from the current $10,000 - $25,000 to $25,000 - $100,000.
Section 10 - emergency waiver of G.L.c. 30 sect. 39M bid requirements in the case of “an imminent security threat”.
Section 11149 Section 44A – Threshold Changes.
- building construction contracts < $10,000, agency receives written price quotes from three qualified contractors (no advertising).
- building construction contracts estimated to cost between $10,000 - $25,000 awarding authority provides notice and reviews written quotes.
- building construction projects estimated to cost between $25,000 - $100,000 competitive bids received per G.L.c. 30 section 39M (no filed sub-bids, no contractor cert.), after public notice and advertisement.
- Building construction bid law G.L.c. 149, applies to building contracts estimated to cost > $100,000.
44 A (E) – when legislature has approved use of alternative mode of procurement, awarding authority should follow “policies and procedures” of 44A – 44H to the extent compatible.
44 A (F) – special procurement procedures for modular buildings and energy management contracts remain in place.
Section 12 – emergency waiver of G.L.c. 149 section 44A bid requirements in the case of “an imminent security threat”.
Section 13
New G.L.c. 149 Section 44A ½ - for building projects estimated to cost $1,500,000 or more, awarding authority shall contract for services with an owner’s project manager (“PM”):
- before entering contract for design services.
- PM services apply to planning, design and construction phases.
- PM qualification requirements. PM must be: registered as A/E and at least 5 years construction supervision experience; or, if not registered, have at least 7 years construction supervision experience.
- awarding authority may assign an existing employee to be PM if he/she meets the experience requirement
Selection Process for PM. Public Agency shall use a “qualifications based selection process” to procure services of owners PM. (does not appear to require a “designer selection process” for PM selection).
Section 14 – revision to G.L.c. 149 Sect. 44B (4) to address bid deposits from pre-qualified filed sub-bidders.
Section 15 – application for a Certificate of Eligibility under G.L.c. 149 Sect. 44D is not a “public record”.
Section 16 – evaluation of the general contractor and subcontractors under G.L.c. 149 Section 44D shall be considered a public record.
Section 17 – technical revision to G.L.c. 149 Section 44D (8).
Section 18 – New Section added to G.L.c. 149 Section 44D requiring Mandatory Certification of Sub-Bidders by DCAM.
- sub-bidders get certified by DCAM – same process as general contractors.
- sub-bidder must submit proof of certification and update statements with sub-bids (same as generals).
- subcontractor certification application fee shall be not less than $100.
- any applicant not certified has right to appeal to AG within 5 days of receipt of non-certification. AG investigates and issues decision on appeal in 30 days.
Section 19 – New G.L.c. 149 Section 44D ½ - General Contractor Prequalification
- on building construction contracts estimated to cost $10,000,000 or more, an awarding authority shall prequalify general contractors.
- on contracts between $100,000 and $10,000,000 an awarding authority may prequalify general contractors.
- DCAM, Massport, MWRA, Mass. State College and UMASS Building Authorities are exempt from prequalification process but may prequalify general contractors.
- to implement prequalification process, awarding authority shall establish a 4 person prequalification committee to review and evaluate applications – a designer’s representative, the PM and two public agency appointees.
- Prequalification Committee uses a “points system” to evaluate general bidders and sub-bidders, within parameters provided.
- General contractor must receive a minimum score of 70 to submit a bid.
- At least 3 general contractors must be pre-qualified.
- Decision of prequalification committee shall be final except in the case of fraud or collusion.
NEW Section 44D ¾ Subcontractor Prequalification
- On contracts estimated to cost $10,000,000 or more, awarding authorities shall prequalify subcontractors.
- On contracts estimated to cost between $100,000 and $10,000,000 an awarding authority may prequalify subcontractors.
- “Exempt agencies” supra, are exempt from subcontractor prequalification process.
- Subcontractor prequalification process same as G.C. prequalification process.
- If agency prequalifies subcontractors it appears agency must require those subcontractors to provide performance and payment bonds when subcontracts are executed.
Section 20 – Revisions to Advertising Requirements to Reflect Changes in the Bid Laws
Section 21 – increase in value of sub-trade work requiring sub-bids from $10,000 to $20,000.
Section 22 - revisions to G.L.c. 149 Sect. 44F (D), re: subcontractor performance and payment bonds, including mandatory bonds from subcontractors when prequalification of sub-bidders is required.
Section 23 - revisions to G.L.c. 149 Section 44F re: subcontractor bonds.
Section 24 - revisions to G.L.c. 149 Sect. 44F re: subcontractor bonds.
Section 25 - revisions to G.L.c. 149 Sect. 44H re: Attorney General assumes obligation to enforce designer selection procedures and new G.L.c. 149A.
Section 26 - revisions to G.L.c. 149 Sect. 48B, regulating whether a worker is considered an employee or an independent contractor.
Section 27 – New Chapter 149A – Alternative Delivery Methods
- for each building contract estimated to cost $5,000,000 or more, a public agency may use the construction management at risk delivery method.
- “C/M at Risk” is the primary alternative construction method for undertaking a building construction project.
- C/M at Risk contract shall provide for compensation based on a GMP price.
- Designer is independent of C/M.
- P/M is independent of C/M.
Awarding Authority that wants to undertake a “C/M at Risk” project must:
- first select PM.
- procure designer.
- submit application to Inspector General requesting permission to proceed with C/M at Risk process.
The exempt agencies (DCAM, UMASS and State College Building Authorities, Massport and MWRA), may:
- submit C/M at Risk procedures to IG for approval.
- once procedure is approved by IG, exempt agencies may use C/M at Risk on any building project valued at $5,000,000 or more.
- exempt agencies annually submit their C/M at Risk selection procedures to Inspector General for review and approval.
Section 5 – C/M at Risk selection procedure is a 2 phase process.
- C/M at Risk contracts require a performance and payment bond in amount of GMP.
- Public agency appoints a 4 person pre-qualification committee (1 designer, 1 PM, 2 reps of public agency).
- RFQ is first phase of process.
- Uniform information required.
- Selection Committee develops a short list of C/M firms that will be given RFP.
- At least 3 C/M firms must be selected at RFQ phase or agency re-advertises
- RFP phase, uniform information required
- Response to RFP shall be in two separate submissions: price proposal and technical response.
- Price submission at RFP stage includes: C/M fee for preconstruction services; C/M fee for construction services; estimated cost of general conditions.
- Technical submission includes: project approach; project team; C/M plan; preliminary definition of sub-bid packages; prevailing wage cert.; commitment letter from surety; technical challenges and solution plan; list of qualifications or exceptions to proposed form of C/M contract.
- Selection committee ranks proposal and selection shall be final in the absence of fraud or collusion.
- If a contract isn’t successfully negotiated with top ranked firm, awarding authority goes to next ranked firm.
- It appears the firms are ranked based upon combined price and technical submission. During negotiations, it appears there are no negotiations on price.
Section 7 – C/M Contract
- compensation method shall be a “cost –plus not to exceed Guaranteed Maximum Price (“GMP”) form of contract”.
- no shared savings provisions.
- incentives allowed as long as they do not exceed 1% of estimated construction cost.
- After CDSs are 60% or more complete, C/M submits detailed GMP, with line item cost breakdown;
- GMP cost breakdown is: by trade; includes C/M contingency; general conditions and fees; allowances; list of assumptions or clarifications in GMP; scheduled dates for substantial and final completion; alternates and unit prices.
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- GMP, once negotiated, takes the form of an amendment to the C/M contract.
- No construction until GMP is executed (except there can be a preliminary GMP agreed to for preliminary construction work).
- GMP amendment shall include a detailed line item cost breakdown including allowances.
- When GMP amendment is agreed to, C/M provides performance and payment bonds.
- If negotiations aren’t successful with the first 2 ranked C/M firms, agency proceeds per conventional bidding (G.L.c. 149 sect. 44A).
Section 8 – If C/M method is used, agency follows the trade contractor selection process in this section.
- Agency issues RFQ to trade contractors.
- Trade contractors must be pre-qualified.
- Trade contractors must receive a 70% rating in order to be pre-qualified.
- After trade contractors are pre-qualified, agency issues a request for bids (from pre-qualified trade contractors), based on 100% construction docs. (NOTE - seems to be the same detailed bid documents a filed sub-bidder receives).
- If there are less than 3 sub-bids submitted and lowest price exceeds estimate for sub-trade, C/M attempts to negotiate an “acceptable price” with lowest sub-bidder and if unsuccessful, next lowest sub-bidder. If that fails, C/M shall solicit additional sub-bids.
- Trade contractors must provide performance and payment bonds.
- Form of subcontract with trade contractors is fixed by statute.
- Where a subcontractor is required to perform work that is not a designated sub-trade category and the cost of that work exceeds $20,000, the C/M must procure at least three quotes from subcontractors approved by agency.
- C/M may use any means to procure subcontracts that cost less than the $20,000 dollar threshold for receipt of filed sub-bids.
- Form of Trade Contractor Agreement is established by statute. Form applies to subcontracts with “trade contractors”. (Law distinguishes between “trade subcontractors” – filed sub-trades and non trade subcontractors).
- Form of Trade Contractor Agreement mirrors current statutory form of Subcontract.
Section 10 - Other public construction laws (prevailing wage, workers compensation, subcontractor direct payment, contractor payment, unanticipated subsurface conditions, change orders, accounting standards) apply to all building projects where agency uses the C/M at Risk method.
Section 12 – Inspector General promulgates regulations to implement C/M at Risk law.
Section 13 – In five years, Inspector General prepares report on C/M at Risk experience.
Section 14 – New Law Establishing a Design Build Procurement Law – For Public Works Projects
- Inspector General must give its prior approval before awarding authority may proceed with a design/build procurement.
- Awarding authority may, with prior approval of Inspector General, procure a “public works project” (non building construction), if the estimated cost of the project is $5,000,000 or more.
- Detailed, standardized application form, must be submitted to Inspector General, before agency is allowed to proceed with a design build procurement.
Section 16 – Design Build Procurement Law for Public Works Projects
- Public works project must have an estimated construction value of $5,000,000 or more, to be considered for design-build method.
- Awarding authority may submit a detailed application to Inspector General, to use a design build procurement for a public works project. If IG approves, it issues a “notice to proceed” with the design/build method and the awarding authority may proceed with design build procurement.
Section 16 (d) – “Exempt Agencies”
- For purposes of design build for a public works project, the MHD, Massport, and MWRA are “exempt agencies”.
- Exempt agencies may use design build on capital facility projects if their design build selection procedures have been approved by IG.
Section 17 – 2 Phase Process
- 2 phase selection process for design build procurements for a public works project. (Procedures for design build on public works project parallels procedures for Construction Management at Risk for building projects).
- RFQ process; pre-qualification of design build firms; awarding authority develops short-list of firms that may submit responses to RFP.
- Section 18 requires awarding authority, before issuing an RFQ for design build of a public works project, to contract with a design professional to provide technical and professional advice during selection process.
- RFP may allow payment of a stipend to unsuccessful proposers.
Section 20 - Awarding authority may select proposals based on either a best value or low bid basis. Section explains different procedures for “best value” vs. “low-bid” selection.