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Regular Session, 2014
SENATE BILL NO. 680 (Substitute of Senate Bill No. 552 by Senator Adley)
BY SENATORS ADLEY AND GARY SMI TH
PUBLIC CONTRACTS. Authorizes use of construction management at risk method for
public contracts. (8/1/14)
AN ACT1
To enact R.S. 38:2225.2.4, relative to public contracts; to authorize use of the construction2
management at risk method for public contracts; and to provide for related matters.3
Be it enacted by the Legislature of Louisiana:4
Section 1. R.S. 38:2225.2.4 is hereby enacted to read as follows:5
ยง2225.2.4. Construction management at risk6
A.(1) Notwithstanding any other provision of law to the contrary, a7
public entity may use the construction management at risk project delivery8
method to contract for a project to construct public works as set forth in this9
Section.10
(2) Purpose. This Section creates an alternative project delivery method,11
known as "construction management at risk", or "CMAR", for use by a public12
entity to award a contract to construct public works when deemed in the public13
interest, beneficial to the owner, and in accordance with the procedures in this14
Section. The following are reasons to use the CMAR delivery method:15
collaboration and cost control; concurrent execution of design and construction;16
a complex project with a tight time frame; owner, designer, and contractor with17 SB NO. 680
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mutual project goals; risk identification controlled by owner; and minimization1
of the risk of construction and design disputes by using a collaborative process.2
(3) CMAR shall not be used for any project that is estimated to cost less3
than twenty-five million dollars.4
B. Definitions. When used in this Section, the following words and5
phrases have the meanings ascribed to them in this Section, unless the context6
indicates a different meaning:7
(1) "Construction management at risk" or "CMAR" means a delivery8
method by which the owner uses a design professional, who is engaged by the9
owner for professional predesign or design services, or both. The owner10
contracts separately with a CMAR contractor to engage in the preconstruction11
phase. As specified in this Section, the same CMAR contractor may also provide12
construction services to build the project.13
(2) "Construction management at risk contractor" or "CMAR14
contractor" means a person, sole proprietorship, partnership, corporation, or15
other legal entity, properly licensed, bonded, and insured, who does one or both16
of the following:17
(a) Provides construction experience to the owner or its design18
professional during the preconstruction phase regarding the constructability of19
the project.20
(b) May contract with the owner to assume the risk to construct the21
project for a guaranteed maximum price, without re-procurement.22
(3) "Design professional" means an engineer, architect, or landscape23
architect who has secured a professional license from a Louisiana registration24
board as required by state law and who is selected by an owner in accordance25
with state law.26
(4) "Owner" means a "public entity" as defined in R.S. 38:2211.27
(5) "Selection review committee" means the committee appointed by the28
owner to review the request for qualifications, score the proposers, and29 SB NO. 680
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recommend award to a construction management at risk contractor. The1
committee shall consist of no more than five individuals as follows:2
(a) One design professional in the discipline of but not involved in the3
project.4
(b) One licensed contractor in the discipline of but not involved in the5
project.6
(c) One representative of the owner.7
(d) Two members at large.8
(6) All other terms shall have the meanings as provided for in R.S.9
38:2211.10
C. Any owner who determines to use the construction management at11
risk method shall indicate such intent in the request for qualifications to12
procure a CMAR contractor and the reasons it deems such method to be in the13
public interest and beneficial to the owner.14
D. There shall be no challenge by any legal process to the choice of the15
successful construction manager at risk contractor except for fraud, bias for16
pecuniary or personal reasons not related to the taxpayers' interest, or17
arbitrary and capricious selection by the owner.18
E. The owner shall select and contract with a design professional for19
design services in the manner provided for by law.20
F. Request for qualifications, or RFQ, for construction management at21
risk contractor.22
(1) A request for qualifications, or RFQ, to award a contract for a23
construction management at risk contractor for preconstruction and24
construction services shall be advertised in the official journal of the owner and,25
if one exists, on the Internet website of the owner. The RFQ shall be advertised26
at least two times within the thirty-day period prior to the deadline for receipt27
of responses.28
(2) The RFQ shall include the following as well as any other pertinent29 SB NO. 680
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information limited to the qualifications of a proposer that the owner1
determines a proposer may need to submit a response to an RFQ:2
(a) The preconstruction scope of services.3
(b) Submittal criteria for the project.4
(c) Procurement grading criteria.5
(d) Scoring methodology.6
(e) Total fees and compensation payable to the CMAR contractor for7
preconstruction services.8
(3) The RFQ may request that proposers include the following in9
response to the RFQ, as well as any other appropriate factors that would, in the10
opinion of the owner, demonstrate the capability of the proposer to perform the11
role of CMAR contractor:12
(a) The proposer's surety.13
(b) Construction methodologies previously used by the proposer on other14
projects.15
(c) Extent to which the proposer intends to self-perform portions of the16
work, if applicable.17
(d) Past performance of the proposer including timely completion of18
other public works projects of similar complexity and size.19
(e) Proposed management and staffing for the project.20
(f) The proposer's last safety record to include current experience21
modification rate, or EMR, recordable incident rate, or RIR, lost work time22
incident rate, or other data as required by the owner.23
(g) The proposer's standard safety plan.24
(4) Within ninety days after the deadline for responses to the RFQ, a25
selection review committee chosen by the owner and identified in the RFQ shall26
make a written recommendation to the owner as to which proposer should be27
awarded the contract. The results of the selection review committee, inclusive28
of its findings, grading, score sheets, and recommendations, shall be available29 SB NO. 680
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for review by all proposers and shall be deemed public records.1
(5) If the benefits of using the CMAR method reduce as the design2
process progresses, the owner shall select the CMAR contractor either before,3
but not later than, when the design professional's design is not more than thirty4
percent complete.5
G. After award and execution of the contract with the CMAR contractor,6
the following actions shall proceed:7
(1) The design professional, in consultation with the CMAR contractor,8
shall proceed with design services.9
(2) The owner shall obtain an opinion of probable cost of the project10
from both the CMAR contractor and the design professional when final design11
of the project is not more than sixty percent complete, and again when final12
design of the project is not more than ninety percent complete.13
(3) The CMAR contractor shall provide to the owner a guaranteed14
maximum price for construction of the project, before or upon completion of15
the final design.16
(4) If the owner and CMAR contractor are able to negotiate, and to17
establish and agree upon a guaranteed maximum price, or GMP, to render18
construction services for the project, and additionally, to agree upon19
constructability, construction phasing and sequencing, and the maximum20
number of contract days to complete the project, the owner may then award the21
contract for construction services to the CMAR contractor for the construction22
phase of the contract.23
(5) Once a guaranteed maximum price is agreed upon, the owner may24
authorize the CMAR contractor to undertake construction services.25
Additionally, the owner may determine and authorize the CMAR contractor to26
undertake specific items of construction services prior to agreement upon a27
GMP for such items, provided such undertaking is for the benefit of the project28
and a GMP for the undertaking can be agreed upon between the owner and29 SB NO. 680
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CMAR contractor. Such items may benefit the project, including but not1
limited to items that require a long lead time, may further the understanding2
of unknown site conditions, or other items.3
(6) If the owner and the CMAR contractor are not able to agree upon4
constructability, construction phasing and sequencing, the GMP for the project,5
the maximum number of contract days to complete the project, and to reach a6
negotiated agreement, then the project shall be readvertised and publicly bid7
utilizing the design-bid-build delivery method.8
H. The provisions of this Section shall supersede any conflicting9
provisions of any law, including but not limited to the requirements of Chapter10
10 of this Title, but the provisions of such Chapter shall otherwise be applicable11
to such contracts.12
The original instrument was prepared by Sharon F. Lyles. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Linda Nugent.
DIGEST
Adley (SB 680)
Present law prohibits a construction manager or any other third-party consultant employed
by a public entity from managing a construction project as a general contractor or acting in
the role of the general contractor to oversee, direct, or coordinate individual trade contractors
on behalf of the public entity, or accepting bids or itself bid on the public works or
components of the public works with respect to which the manager or consultant is
employed or contracted to manage or consult.
Proposed law authorizes an owner who is a public entity to use the construction management
at risk or CMAR project delivery method to contract for public works.
Proposed law defines the "construction management at risk", or "CMAR", method to mean
a delivery method by which the owner uses a design professional, who is engaged by the
owner for professional predesign or design services, or both. The owner contracts separately
with a CMAR contractor to engage in the preconstruction phase. As specified in proposed
law, the same CMAR contractor may also provide construction services to build the project.
Proposed law defines "CMAR contractor" as a person, sole proprietorship, partnership,
corporation or other legal entity, properly licensed, bonded, and insured, who may assume
the risk to construct the project for a guaranteed maximum price or who provides
construction experience to the owner or its design professional during the preconstruction
phase regarding the constructability of the project, or both.
Proposed law defines "design professional" as an engineer, architect, or landscape architect
who has secured a professional license from a Louisiana registration board as required by
state law and who is selected by an owner in accordance with state law. SB NO. 680
SLS 14RS-3067 REENGROSSED
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law defines "selection review committee" to mean the committee appointed by the
owner to review the request for qualifications, score the proposers, and recommend award
to a CMAR contractor. The committee shall consist of no more than five individuals as
follows:
(1)One design professional in the discipline of but not involved in the project.
(2)One licensed contractor in the discipline of but not involved in the project.
(3)One representative of the owner.
(4)Two members at large.
Proposed law defines "owner" as a public entity as defined in R.S. 38:2211.
Proposed law requires an owner who determines to use the CMAR method to indicate such
intent in the RFQ to procure a CMAR contractor and the reasons it deems such method to
be in the public interest and beneficial to the owner.
Proposed law prohibits challenges by any legal process to the choice of the successful
CMAR contractor except for fraud, bias for pecuniary or personal reasons not related to the
taxpayers' interest, or arbitrary and capricious selection by the owner.
Proposed law requires an owner to select and contract with a design professional for design
services in the manner provided for by law.
Proposed law requires advertisement of the RFQ to award a contract for CMAR services in
the owner's official journal, and on the owner's Internet website, if available. The RFQ shall
be advertised at least two times within the 30 day period prior to the deadline for receipt of
responses.
Proposed law lists specific items the owner shall include in the RFQ. Allows the owner to
include other listed items in the RFQ. Requires review and grading of proposals by a review
committee identified in the RFQ. Provides that the review committee results, inclusive of
its findings, grading, score sheets and recommendations are available for review by all
proposers and shall be deemed public records.
Proposed law requires the review committee to make its recommendations to the owner
within 90 days after the deadline for submission of responses to the RFQ. Requires the
proposer recommended by the committee as the CMAR contractor to work with the owner's
design professional for the project on constructability and construction phasing and
sequencing prior to the owner's award to construct the project.
Proposed law requires the owner to select the CMAR contractor either before, but not later
than, when the design professional design is not more than 30% complete if the benefits of
the CMAR method reduce as the design process progresses.
Proposed law requires the owner to obtain an opinion of probable cost from the design
professional and the CMAR contractor when final project design is not more than 60% and
again when final design is not more than 90% complete.
Proposed law requires the CMAR contractor to provide the owner a guaranteed maximum
price, or GMP, before or upon completion of final design.
Proposed law provides that, if the owner and CMAR contractor are able to negotiate,
establish, and agree upon such GMP for rendering construction services for the project, the
owner may authorize the CMAR contractor to undertake construction services. Further
provides that an owner may determine and authorize a CMAR contractor to undertake SB NO. 680
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
specific items provided such undertaking is beneficial to the project, including but not
limited to items that require a long lead time, further understanding of unknown site
conditions, or other issues.
Proposed law requires the owner to readvertise and publicly bid utilizing the design-bid-
build delivery method when the owner and the CMAR contractor do not reach a negotiated
agreement.
Proposed law provisions do not supersede any conflicting provisions of any law, including
but not limited to the requirements of Chapter 10 of Title 38, but the provisions of such
Chapter shall otherwise apply to such contracts.
Effective August 1, 2014.
(Adds R.S. 38:2225.2.4)
Summary of Amendments Adopted by Senate
Senate Floor Amendments to engrossed bill
1. Removes the requirement that the two members at large on the selection
review committee be from the general public.
2. Legislative Bureau technical amendments.