Senate Study Bill 1168 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON BOUSSELOT) A BILL FOR An Act related to guaranteed maximum price contracts for the 1 construction of public improvements. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2541XC (3) 91 sc/js
S.F. _____ Section 1. Section 26A.2, Code 2025, is amended to read as 1 follows: 2 26A.2 Authorization. 3 Notwithstanding any other law to the contrary, a 4 governmental entity shall be authorized to enter into a 5 guaranteed maximum price contract for the construction of a 6 public improvement pursuant to this chapter if the estimated 7 cost of the project exceeds one hundred fifty million dollars . 8 Sec. 2. Section 26A.3, subsection 4, paragraphs a and c, 9 Code 2025, are amended to read as follows: 10 a. After considering the statements of qualifications, the 11 governmental entity shall issue a request for proposals to each 12 contractor who meets the qualifications , which shall include 13 selection and evaluation criteria. Each contractor issued a 14 request for proposals shall be permitted to submit a proposal 15 and each proposal submitted shall include the construction 16 manager-at-risks proposed fees and costs, including the 17 proposed costs for general conditions. The construction 18 manager-at-risks proposed fees and costs shall not contain 19 any form of contingency . The request for proposals shall be 20 subject to the requirements of section 73A.28 and the same 21 limitations applied to selection criteria for the request for 22 statements of qualifications in this chapter . 23 c. The governmental entity or its representative shall 24 select the construction manager-at-risk that submits the 25 proposal that offers the best value lowest cost for the 26 governmental entity based on the published selection criteria 27 and on its ranking evaluation. The governmental entity 28 shall first attempt to negotiate a contract with the selected 29 construction manager-at-risk. If the governmental entity 30 is unable to negotiate a satisfactory contract with the 31 selected construction manager-at-risk, the governmental entity 32 shall, formally and in writing, end negotiations with that 33 construction manager-at-risk and proceed to negotiate with the 34 next construction manager-at-risk in the order of the selection 35 -1- LSB 2541XC (3) 91 sc/js 1/ 4
S.F. _____ ranking until a contract is reached or negotiations with all 1 ranked construction managers-at-risk end. 2 Sec. 3. Section 26A.3, subsection 5, paragraph a, 3 unnumbered paragraph 1, Code 2025, is amended to read as 4 follows: 5 If the estimated total cost of trade contract work and 6 materials packages is in excess of the adjusted competitive 7 bid threshold established in section 314.1B , the construction 8 manager-at-risk shall direct the designated licensed 9 engineer, architect, or landscape architect to prepare plans 10 and specifications and make the plans and specifications 11 available. The construction manager-at-risk shall advertise 12 for competitive bids, receive bids, prepare bid analyses, and 13 award contracts to qualified firms on trade contract work and 14 materials packages in accordance with all of the following: 15 Sec. 4. Section 26A.3, subsection 5, paragraph a, 16 subparagraphs (3) and (4), Code 2025, are amended to read as 17 follows: 18 (3) The governmental entity and the construction 19 manager-at-risk shall participate in the bid review and 20 evaluation process. The governmental entity and the 21 construction manager-at-risk shall open, announce the name 22 of the contractor submitting a bid, and file all proposals 23 received, at the time and place specified in the notice to 24 bidders. All bids containing contingent amounts shall be 25 rejected. After the bids have been opened, reviewed, and 26 tabulated, the contracts shall be awarded to the lowest 27 responsive, responsible bidder. All awards and bids shall be 28 made available to the public. 29 (4) Notwithstanding any other provisions of this paragraph 30 to the contrary, the construction manager-at-risk may 31 self-perform work for a trade package that is below the 32 adjusted competitive bid threshold established in section 33 314.1B . If a trade package is in excess of the adjusted 34 competitive bid threshold established in section 314.1B , the 35 -2- LSB 2541XC (3) 91 sc/js 2/ 4
S.F. _____ construction manager-at-risk shall notify the governmental 1 entity in writing of its intent to submit a bid proposal for 2 a trade package. In submission of a bid, the construction 3 manager-at-risk shall comply with the requirements of this 4 paragraph. The governmental entity shall receive the bids, 5 participate in, and provide oversight of all bid analyses 6 pertinent to the award of subcontracts or rejection of bids on 7 any trade package for which the construction manager-at-risk 8 submits a bid to self-perform. Where the construction 9 manager-at-risk is not the apparent low bidder, the government 10 shall be responsible for determining whether a recommendation 11 of award to the construction manager-at-risk is in the best 12 interests of the project. A construction manager-at-risk shall 13 not be required to comply with bidding requirements for general 14 conditions as provided in the contract with the governmental 15 entity. If the construction manager-at-risk self-performs 16 the construction work, it shall adhere to any agreement it 17 may have with one or more labor organizations. However, the 18 construction manager-at-risk shall not be obligated to adhere 19 to any terms and conditions of any labor agreement with one or 20 more labor organizations for those trade contracts that are 21 not self-performed by the construction manager-at-risk for the 22 public improvement, and such terms shall be deemed void and 23 unenforceable. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanations substance by the members of the general assembly. 27 This bill relates to guaranteed maximum price contracts for 28 the construction of a public improvement. 29 Under current law, a governmental entity is authorized 30 to enter into a guaranteed maximum price contract for the 31 construction of a public improvement. The bill allows a 32 governmental entity to enter into such a contract only if the 33 estimated cost of the project exceeds $150 million. 34 The bill requires each proposal submitted by a construction 35 -3- LSB 2541XC (3) 91 sc/js 3/ 4
S.F. _____ manager-at-risk to include the proposed costs for general 1 conditions. The proposed fees and costs may not contain a 2 contingency. A bid containing a contingent amount must be 3 rejected. 4 The bill provides that a governmental entity or 5 representative must select the construction manager-at-risk 6 that submits the lowest cost proposal, based on the published 7 selection criteria and its ranking evaluation, rather than 8 the proposal that offers the best value. The bill strikes 9 a requirement that the governmental entity consider whether 10 awarding a contract to the construction manager-at-risk who was 11 not the apparent lowest bidder is in the best interest of the 12 project. 13 If the estimated cost of trade contract work and materials 14 packages exceeds the adjusted competitive bid threshold, the 15 bill requires the construction manager-at-risk to direct the 16 designated licensed engineer, architect, or landscape architect 17 to prepare and make available plans and specifications for the 18 public improvement project. 19 -4- LSB 2541XC (3) 91 sc/js 4/ 4