Texas Senate Bill SB1110 Latest Draft

                            81R29499 PMO-D
 By: Jackson S.B. No. 1110
 Substitute the following for S.B. No. 1110:
 By: Geren C.S.S.B. No. 1110


 A BILL TO BE ENTITLED
 AN ACT
 relating to contracts by governmental entities and related
 professional services and to public works performance and payment
 bonds.
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 ARTICLE 1. PUBLIC WORKS PERFORMANCE AND PAYMENT BONDS
 SECTION 1.01. Section 2253.021, Government Code, is amended
 by adding Subsection (h) to read as follows:
 (h)  A reverse auction procedure may not be used to obtain
 services related to a public work contract for which a bond is
 required under this section. In this subsection, "reverse auction
 procedure" has the meaning assigned by Section 2155.062 or a
 procedure similar to that described by Section 2155.062.
 ARTICLE 2. CONTRACTS BY GOVERNMENTAL ENTITIES
 SECTION 2.01. Section 11.168, Education Code, is amended to
 read as follows:
 Sec. 11.168. USE OF DISTRICT RESOURCES PROHIBITED FOR
 CERTAIN PURPOSES; EXCEPTION. (a)  Except as provided by Subsection
 (b), the [The] board of trustees of a school district may not enter
 into an agreement authorizing the use of school district employees,
 property, or resources for the provision of materials or labor for
 the design, construction, or renovation of improvements to real
 property not owned or leased by the district.
 (b)  This section does not prohibit the board of trustees of
 a school district from entering into an agreement for the design,
 construction, or renovation of improvements to real property not
 owned or leased by the district if the improvements benefit real
 property owned or leased by the district. Benefits to real property
 owned or leased by the district include the design, construction,
 or renovation of highways, roads, streets, sidewalks, crosswalks,
 utilities, and drainage improvements that serve or benefit the real
 property owned or leased by the district.
 SECTION 2.02. Sections 44.031(a) and (f), Education Code,
 are amended to read as follows:
 (a) Except as provided by this subchapter, all school
 district contracts for the purchase of goods and services, except
 contracts for the purchase of produce or vehicle fuel, valued at
 $50,000 [$25,000] or more in the aggregate for each 12-month period
 shall be made by the method, of the following methods, that provides
 the best value for the district:
 (1) competitive bidding for services other than
 construction services;
 (2) competitive sealed proposals for services other
 than construction services;
 (3) a request for proposals, for services other than
 construction services;
 (4) a catalogue purchase as provided by Subchapter B,
 Chapter 2157, Government Code;
 (5) an interlocal contract;
 (6) [(5)] a method provided by Chapter 2267,
 Government Code, for construction services [a design/build
 contract;
 [(6)     a contract to construct, rehabilitate, alter, or
 repair facilities that involves using a construction manager;
 [(7)     a job order contract for the minor construction,
 repair, rehabilitation, or alteration of a facility];
 (7) [(8)] the reverse auction procedure as defined by
 Section 2155.062(d), Government Code; or
 (8) [(9)] the formation of a political subdivision
 corporation under Section 304.001, Local Government Code.
 (f) This section does not apply to a contract for
 professional services rendered, including services of an
 architect, attorney, engineer, or fiscal agent. A school district
 may, at its option, contract for professional services rendered by
 a financial consultant or a technology consultant in the manner
 provided by Section 2254.003, Government Code, in lieu of the
 methods provided by this section.
 SECTION 2.03. Subchapter B, Chapter 44, Education Code, is
 amended by adding Section 44.0351 to read as follows:
 Sec. 44.0351.  COMPETITIVE BIDDING. (a)  Except to the
 extent prohibited by other law and to the extent consistent with
 this subchapter, a school district may use competitive bidding to
 select a vendor as authorized by Section 44.031(a)(1).
 (b)  Except as provided by this subsection, Subchapter B,
 Chapter 271, Local Government Code, does not apply to a competitive
 bidding process under this subchapter. Sections 271.026,
 271.027(a), and 271.0275, Local Government Code, apply to a
 competitive bidding process under this subchapter.
 (c)  A school district shall award a competitively bid
 contract at the bid amount to the bidder offering the best value for
 the district. In determining the best value for the district, the
 district is not restricted to considering price alone, but may
 consider any other factors stated in the selection criteria. The
 selection criteria may include the factors listed in Section
 44.031(b).
 SECTION 2.04. Subchapter B, Chapter 44, Education Code, is
 amended by adding Section 44.0361 to read as follows:
 Sec. 44.0361.  COMPETITIVE SEALED PROPOSALS. (a)  In
 selecting a vendor through competitive sealed proposals as
 authorized by Section 44.031(a)(2), a school district shall follow
 the procedures prescribed by this section.
 (b)  The district shall prepare a request for competitive
 sealed proposals that includes information that vendors may require
 to respond to the request. The district shall state in the request
 for proposals the selection criteria that will be used in selecting
 the successful offeror.
 (c)  The district shall receive, publicly open, and read
 aloud the names of the offerors and, if any are required to be
 stated, all prices stated in each proposal. Not later than the 45th
 day after the date on which the proposals are opened, the district
 shall evaluate and rank each proposal submitted in relation to the
 published selection criteria.
 (d)  The district shall select the offeror that offers the
 best value for the district based on the published selection
 criteria and on its ranking evaluation. The district shall first
 attempt to negotiate with the selected offeror a contract. The
 district may discuss with the selected offeror options for a scope
 or time modification and any price change associated with the
 modification. If the district is unable to negotiate a contract
 with the selected offeror, the district shall, formally and in
 writing, end negotiations with that offeror and proceed to the next
 offeror in the order of the selection ranking until a contract is
 reached or all proposals are rejected.
 (e)  In determining the best value for the district, the
 district is not restricted to considering price alone, but may
 consider any other factors stated in the selection criteria.
 SECTION 2.05. Subchapter B, Chapter 44, Education Code, is
 amended by adding Section 44.0411 to read as follows:
 Sec. 44.0411.  CHANGE ORDERS. (a)  If a change in plans or
 specifications is necessary after the performance of a contract is
 begun or if it is necessary to decrease or increase the quantity of
 work to be performed or of materials, equipment, or supplies to be
 furnished, the district may approve change orders making the
 changes.
 (b)  The total contract price may not be increased because of
 the changes unless additional money for increased costs is approved
 for that purpose from available money or is provided for by the
 authorization of the issuance of time warrants.
 (c)  The district may grant general authority to an
 administrative official to approve the change orders.
 (d)  A contract with an original contract price of $1 million
 or more may not be increased under this section by more than 25
 percent. If a change order for a contract with an original contract
 price of less than $1 million increases the contract amount to $1
 million or more, the total of the subsequent change orders may not
 increase the revised contract amount by more than 25 percent of the
 original contract price.
 SECTION 2.06. Subchapter A, Chapter 46, Education Code, is
 amended by adding Section 46.0111 to read as follows:
 Sec. 46.0111.  ACTIONS BROUGHT FOR DEFECTIVE DESIGN,
 CONSTRUCTION, RENOVATION, OR IMPROVEMENT OF INSTRUCTIONAL
 FACILITY. (a)  In this section:
 (1)  "Net proceeds" means the difference between the
 amount recovered by or on behalf of a school district in an action,
 by settlement or otherwise, and the legal fees and litigation costs
 incurred by the district in prosecuting the action.
 (2)  "State's share" means an amount equal to the
 district's net proceeds from the recovery multiplied by a
 percentage determined by dividing the amount of state assistance
 under this subchapter used to pay the principal of and interest on
 bonds issued in connection with the instructional facility that is
 the subject of the action by the total amount of principal and
 interest paid on the bonds as of the date of the judgment or
 settlement.
 (b)  A school district that brings an action for recovery of
 damages for the defective design, construction, renovation, or
 improvement of an instructional facility financed by bonds
 for which the district receives state assistance under this
 subchapter shall provide the commissioner with written notice of
 the action.
 (c)  The commissioner may join in the action on behalf of the
 state to protect the state's share in the action.
 (d)  A school district shall use the net proceeds from an
 action brought by the district for the defective design,
 construction, renovation, or improvement of an instructional
 facility financed by bonds for which the district receives state
 assistance under this subchapter to repair the defective design,
 construction, renovation, or improvement of the instructional
 facility on which the action is brought or to replace the facility.
 Section 46.008 applies to the repair.
 (e)  The state's share is state property. The school
 district shall send to the comptroller any portion of the state's
 share not used by the school district to repair the defective
 design, construction, renovation, or improvement of the
 instructional facility on which the action is brought or to replace
 the facility. Section 42.258 applies to the state's share under
 this subsection.
 SECTION 2.07. Section 51.923, Education Code, is amended to
 read as follows:
 Sec. 51.923. QUALIFICATIONS OF CERTAIN BUSINESS ENTITIES TO
 ENTER INTO CONTRACTS WITH AN INSTITUTION OF HIGHER EDUCATION. (a)
 In this section:
 (1) "Business entity [Corporation]" means an entity
 recognized by law through which business is conducted, including a
 sole proprietorship, partnership, firm, corporation, limited
 liability company, holding company, joint stock company,
 receivership or trust [a corporation for profit organized under the
 laws of this state or under laws other than the laws of this state].
 (2) "Governing board" has the meaning assigned by
 Section 61.003 of this code.
 (3) "Institution of higher education" has the meaning
 assigned by Section 61.003 of this code.
 (4) "Nonprofit corporation" means any organization
 exempt from federal income tax under Section 501 of the Internal
 Revenue Code of 1986 that does not distribute any part of its
 income to any member, director, or officer.
 (b) A nonprofit corporation is not disqualified from
 entering into a contract or other transaction with an institution
 of higher education even though one or more members of the governing
 board of the institution of higher education also serves as a
 member, [or] director, officer, or employee of the nonprofit
 corporation.
 (c) A business entity [corporation] is not disqualified
 from entering into a contract or other transaction with an
 institution of higher education even though one or more members of
 the governing board of the institution of higher education has an
 interest in the business entity, subject to Subsection (d) [also
 serves as a stockholder or director of the corporation provided
 that no member of the governing board owns or has a beneficial
 interest in more than five percent of the corporation's outstanding
 capital stock and further provided that the contract or transaction
 is:
 [(1)     an affiliation, licensing, or sponsored research
 agreement; or
 [(2)     awarded by competitive bidding or competitive
 sealed proposals].
 (d) An institution of higher education is not prohibited
 from entering into a contract or other transaction with a business
 entity in which a member of the governing board of the institution
 of higher education has an interest if:
 (1) the interest is not substantial; or
 (2) the interest is substantial and the [described in
 this section if any] board member [having an interest described in
 this section in the contract or transaction] discloses that
 interest in a meeting held in compliance with Chapter 551,
 Government Code, and refrains from voting on the contract or
 transaction.
 (d-1) Any [such] contract or transaction described by
 Subsection (d)(2) requiring board approval must be approved by an
 affirmative majority of the board members voting on the contract or
 transaction.
 (e)  In this section, a member of a governing board has a
 substantial interest in a business entity if:
 (1) the member owns:
 (A)  10 percent or more of the voting stock or
 shares of the business entity; or
 (B)  10 percent or more or $15,000 or more of the
 fair market value of the business entity;
 (2)  the member received from the business entity more
 than 10 percent of the member's gross income for the previous year;
 (3)  the member is an officer, director, or member of
 the governing board of the business entity; or
 (4)  an individual related to the member in the first
 degree by consanguinity or affinity under Chapter 573, Government
 Code, has an interest in the business entity as described by
 Subdivision (1), (2), or (3).
 (f)  A violation of this section does not render an action of
 the governing board voidable unless the contract or transaction
 that was the subject of the action would not have passed the
 governing board without the vote of the member who violated this
 section.
 SECTION 2.08. Section 791.011, Government Code, is amended
 by amending Subsection (h) and adding Subsection (i) to read as
 follows:
 (h) An interlocal contract or any other agreement between a
 governmental entity and a purchasing cooperative may not be used to
 purchase engineering or architectural services.
 (i)  An interlocal contract may not be used to purchase
 construction services unless the services are in connection with
 the design or construction of a specific facility to be jointly
 owned, used, or financed by the parties to the contract or:
 (1)  the services are in connection with a job order
 contract;
 (2)  the governing body of the governmental entity for
 whom the work will ultimately be performed approves the purchase in
 open session;
 (3)  public notice is provided in a manner consistent
 with a direct contract for job order contracting services; and
 (4)  work orders under the contract comply with Section
 2267.403.
 SECTION 2.09. Section 2155.502, Government Code, is amended
 by amending Subsection (c) and adding Subsection (f) to read as
 follows:
 (c) The commission may not list a multiple award contract on
 a schedule developed under Subsection (a) if the goods or services
 provided by that contract:
 (1) are available from only one vendor;
 (2) are telecommunications services, facilities, or
 equipment; [or]
 (3) are commodity items as defined by Section
 2157.068(a); or
 (4)  are engineering services as described by Section
 1001.003, Occupations Code, or architectural services as described
 by Section 1051.001, Occupations Code.
 (f) Notwithstanding Subsection (a), the commission:
 (1)  shall list a multiple award contract on a schedule
 developed under Subsection (a) for lighting as defined by Section
 2158.301(b); and
 (2)  may negotiate a price for the lighting listed that
 offers the best value.
 SECTION 2.10. Section 2158.301, Government Code, as added
 by Chapter 262 (S.B. 12), Acts of the 80th Legislature, Regular
 Session, 2007, is amended to read as follows:
 Sec. 2158.301. ENERGY CONSERVATION. (a) If available and
 cost effective, the commission or another state agency shall
 purchase equipment, lighting, and appliances for state use that
 meet or exceed the federal Energy Star standards designated by the
 United States Environmental Protection Agency and the United States
 Department of Energy or Subsection (b).
 (b)  Under this section, lighting means illumination that
 achieves a minimum energy efficiency of 60 percent above standard
 incandescent lighting with a minimum life expectancy of forty
 thousand hours.
 SECTION 2.11. Section 2166.2525, Government Code, is
 amended to read as follows:
 Sec. 2166.2525. DETERMINATION OF CONTRACTING METHOD. The
 [commission shall adopt rules that determine the circumstances for
 use of each] method of contracting allowed under this subchapter
 for design and construction services is any method provided by
 Chapter 2267. [In developing the rules, the commission shall
 solicit advice and comment from design and construction
 professionals regarding the criteria the commission will use in
 determining which contracting method is best suited for a project.]
 SECTION 2.12. Subtitle F, Title 10, Government Code, is
 amended by adding Chapter 2267 to read as follows:
 CHAPTER 2267.  CONTRACTING AND DELIVERY PROCEDURES FOR
 CONSTRUCTION PROJECTS
 SUBCHAPTER A.  GENERAL PROVISIONS
 Sec. 2267.001. DEFINITIONS. In this chapter:
 (1)  "Architect" means an individual registered as an
 architect under Chapter 1051, Occupations Code.
 (2)  "Engineer" means an individual licensed as an
 engineer under Chapter 1001, Occupations Code.
 (3)  "Facility" means, unless otherwise specifically
 provided, an improvement to real property.
 (4)  "General conditions" in the context of a contract
 for the construction, rehabilitation, alteration, or repair of a
 facility means on-site management, administrative personnel,
 insurance, bonds, equipment, utilities, and incidental work,
 including minor field labor and materials.
 (5)  "General contractor" means a sole proprietorship,
 partnership, corporation, or other legal entity that assumes the
 risk for constructing, rehabilitating, altering, or repairing all
 or part of a facility at the contracted price.
 (6)  "Public work contract" means a contract for
 constructing, altering, or repairing a public building or carrying
 out or completing any public work.
 Sec. 2267.002.  APPLICABILITY OF CHAPTER TO GOVERNMENTAL
 ENTITIES AND QUASI-GOVERNMENTAL ENTITIES ENGAGED IN PUBLIC WORKS.
 This chapter applies to a public work contract made by a
 governmental entity or quasi-governmental entity authorized by
 state law to make a public work contract, including:
 (1)  a state agency as defined by Section 2151.002,
 including the Texas Facilities Commission;
 (2) a local government, including:
 (A) a county;
 (B) a municipality;
 (C) a school district;
 (D)  any other special district or authority,
 including a hospital district, a defense base development authority
 established under Chapter 379B, Local Government Code, and a
 conservation and reclamation district, including a river authority
 or any other type of water district; and
 (E)  any other political subdivision of this
 state;
 (3)  a public junior college as defined by Section
 61.003, Education Code;
 (4) any entity owned by a municipality; and
 (5)  any other entity that owns or operates a facility
 for the benefit of a municipality or county.
 Sec. 2267.003.  CONFLICT OF LAWS; REQUIREMENT TO FOLLOW
 PROCEDURES OF THIS CHAPTER. (a)  Except as provided by this
 section, this chapter prevails over any other law relating to a
 public work contract.
 (b)  This chapter does not prevail over a conflicting
 provision in a law relating to contracting with a historically
 underutilized business.
 (c)  This chapter does not prevail over a conflicting
 provision in an ordinance or resolution passed by the governing
 body of a municipally owned electric utility in a procedure
 described by Section 252.022(c), Local Government Code, that:
 (1)  requires the use of competitive bidding or
 competitive sealed proposals; or
 (2)  prescribes a design-build procurement procedure
 that conflicts with this chapter.
 Sec. 2267.004.  EXEMPTION: TEXAS DEPARTMENT OF
 TRANSPORTATION; HIGHWAY PROJECTS. This chapter does not apply to:
 (1)  a contract entered into by the Texas Department of
 Transportation; or
 (2)  a project that receives money from a state or
 federal highway fund.
 Sec. 2267.005.  APPLICABILITY: INSTITUTIONS OF HIGHER
 EDUCATION. (a)  In this section, "institution of higher
 education," "public junior college," and "university system" have
 the meanings assigned by Section 61.003, Education Code.
 (b)  This chapter applies to a public junior college but does
 not apply to:
 (1) any other institution of higher education; or
 (2) a university system.
 Sec. 2267.006.  EXEMPTION: REGIONAL TOLLWAY AUTHORITIES.
 This chapter does not apply to a regional tollway authority under
 Chapter 366, Transportation Code.
 [Sections 2267.007-2267.050 reserved for expansion]
 SUBCHAPTER B. GENERAL POWERS AND DUTIES
 Sec. 2267.051.  RULES. A governmental entity may adopt
 rules as necessary to implement this chapter.
 Sec. 2267.052.  NOTICE REQUIREMENTS. (a)  A governmental
 entity shall advertise or publish notice of requests for bids,
 proposals, or qualifications in a manner prescribed by law.
 (b)  For a contract entered into by a governmental entity
 under a method provided by this chapter, the governmental entity
 shall publish notice of the time and place the bid or proposal or
 request for qualifications will be received and opened in a manner
 prescribed by law.
 (c)  For a contract entered into by a municipality, river
 authority, conservation and reclamation district created pursuant
 to Section 59, Article XVI, Texas Constitution, and located in a
 county with a population of more than 250,000, or defense base
 development authority under any of the methods provided by this
 chapter, the municipality, river authority, conservation and
 reclamation district created pursuant to Section 59, Article XVI,
 Texas Constitution, and located in a county with a population of
 more than 250,000, or defense base development authority shall
 publish notice of the time and place the bids or proposals, or the
 responses to a request for qualifications, will be received and
 opened.  The notice must be published in a newspaper of general
 circulation in the county in which the defense base development
 authority's or municipality's central administrative office is
 located or the county in which the greatest amount of the river
 authority's or such conservation and reclamation district's
 territory is located once each week for at least two weeks before
 the deadline for receiving bids, proposals, or responses.  If there
 is not a newspaper of general circulation in that county, the notice
 shall be published in a newspaper of general circulation in the
 county nearest the county seat of the county in which the defense
 base development authority's or municipality's central
 administrative office is located or the county in which the
 greatest amount of the river authority's or such conservation and
 reclamation district's territory is located.  In a two-step
 procurement process, the time and place the second step bids,
 proposals, or responses will be received are not required to be
 published separately.
 (d)  For a contract entered into by a county under any of the
 methods provided by this chapter, the county shall publish notice
 of the time and place the bids or proposals, or the responses to a
 request for qualifications, will be received and opened. The
 notice must be published in a newspaper of general circulation in
 the county once each week for at least two weeks before the deadline
 for receiving bids, proposals, or responses. If there is not a
 newspaper of general circulation in the county, the notice shall
 be:
 (1) posted at the courthouse door of the county; and
 (2)  published in a newspaper of general circulation in
 the nearest county.
 Sec. 2267.053.  DELEGATION OF AUTHORITY. (a)  The governing
 body of a governmental entity may delegate its authority under this
 chapter regarding an action authorized or required by this chapter
 to a designated representative, committee, or other person.
 (b)  The governmental entity shall provide notice of the
 delegation, the limits of the delegation, and the name or title of
 each person designated under Subsection (a) by rule or in the
 request for bids, proposals, or qualifications or in an addendum to
 the request.
 Sec. 2267.054.  RIGHT TO WORK. (a)  This section applies to
 a governmental entity when the governmental entity is engaged in:
 (1) procuring goods or services under this chapter;
 (2) awarding a contract under this chapter; or
 (3)  overseeing procurement or construction for a
 public work or public improvement under this chapter.
 (b)  In engaging in an activity to which this section
 applies, a governmental entity:
 (1)  may not consider whether a person is a member of or
 has another relationship with any organization; and
 (2)  shall ensure that its bid specifications and any
 subsequent contract or other agreement do not deny or diminish the
 right of a person to work because of the person's membership or
 other relationship status with respect to an organization.
 Sec. 2267.055.  CRITERIA TO CONSIDER. (a)  In determining
 the award of a contract under this chapter, the governmental entity
 may consider:
 (1) the price;
 (2) the offeror's experience and reputation;
 (3) the quality of the offeror's goods or services;
 (4)  the impact on the ability of the governmental
 entity to comply with rules relating to historically underutilized
 businesses;
 (5) the offeror's safety record;
 (6) the offeror's proposed personnel;
 (7)  whether the offeror's financial capability is
 appropriate to the size and scope of the project; and
 (8)  any other relevant factor specifically listed in
 the request for bids, proposals, or qualifications.
 (b)  In determining the award of a contract under this
 chapter, the governmental entity shall:
 (1)  consider and apply any existing laws, including
 any criteria, related to historically underutilized businesses;
 and
 (2)  consider and apply any existing laws, rules, or
 applicable municipal charters, including laws applicable to local
 governments, related to the use of women, minority, small, or
 disadvantaged businesses.
 Sec. 2267.056.  USING METHOD OTHER THAN COMPETITIVE BIDDING
 FOR CONSTRUCTION SERVICES; EVALUATION OF PROPOSALS; CRITERIA.
 (a)  The governing body of a governmental entity that considers a
 construction contract using a method authorized by this chapter
 other than competitive bidding must, before advertising, determine
 which method provides the best value for the governmental entity.
 (b)  The governmental entity shall base its selection among
 offerors on applicable criteria listed for the particular method
 used. The governmental entity shall publish in the request for
 proposals or qualifications the criteria that will be used to
 evaluate the offerors, and the applicable weighted value for each
 criterion.
 (c)  The governmental entity shall document the basis of its
 selection and shall make the evaluations public not later than the
 seventh day after the date the contract is awarded.
 Sec. 2267.057.  ARCHITECT OR ENGINEER SERVICES. (a)  An
 architect or engineer required to be selected or designated under
 this chapter has full responsibility for complying with Chapter
 1051 or 1001, Occupations Code, as applicable.
 (b)  If the selected or designated architect or engineer is
 not a full-time employee of the governmental entity, the
 governmental entity shall select the architect or engineer on the
 basis of demonstrated competence and qualifications as provided by
 Section 2254.004.
 Sec. 2267.058.  USE OF OTHER PROFESSIONAL SERVICES.
 (a)  Independently of the contractor, construction
 manager-at-risk, or design-build firm, the governmental entity
 shall provide or contract for the construction materials
 engineering, testing, and inspection services and the verification
 testing services necessary for acceptance of the facility by the
 governmental entity.
 (b)  The governmental entity shall select the services for
 which it contracts under this section in accordance with Section
 2254.004.
 Sec. 2267.059.  SEALED BIDS, PROPOSALS, OR QUALIFICATIONS
 REQUIRED. A person who submits a bid, proposal, or qualification to
 a governmental entity shall seal it before delivery.
 [Sections 2267.060-2267.100 reserved for expansion]
 SUBCHAPTER C. COMPETITIVE BIDDING METHOD
 Sec. 2267.101.  CONTRACTS FOR FACILITIES:  COMPETITIVE
 BIDDING. (a)  In this chapter, "competitive bidding" is a
 procurement method by which a governmental entity contracts with a
 contractor for the construction, alteration, rehabilitation, or
 repair of a facility by awarding the contract to the lowest
 responsible bidder.
 (b)  Except as otherwise provided by this chapter or other
 law, a governmental entity may contract for the construction,
 alteration, rehabilitation, or repair of a facility only after the
 entity advertises for bids for the contract in a manner prescribed
 by law, receives competitive bids, and awards the contract to the
 lowest responsible bidder.
 Sec. 2267.102.  USE OF ARCHITECT OR ENGINEER. The
 governmental entity shall select or designate an architect or
 engineer in accordance with Chapter 1051 or 1001, Occupations Code,
 as applicable, to prepare the construction documents required for a
 project to be awarded by competitive bidding.
 Sec. 2267.103.  PREPARATION OF REQUEST. The governmental
 entity shall prepare a request for competitive bids that includes
 construction documents, estimated budget, project scope, estimated
 project completion date, and other information that a contractor
 may require to submit a bid.
 Sec. 2267.104.  EVALUATION OF OFFERORS. The governmental
 entity shall receive, publicly open, and read aloud the names of the
 offerors and their bids.
 Sec. 2267.105.  SELECTION OF OFFEROR. Not later than the
 seventh day after the date the contract is awarded, the
 governmental entity shall document the basis of its selection and
 shall make the evaluations public.
 Sec. 2267.106.  APPLICABILITY OF OTHER COMPETITIVE BIDDING
 LAW TO CERTAIN LOCAL GOVERNMENTAL ENTITIES. Except as otherwise
 specifically provided by this section, Subchapter B, Chapter 271,
 Local Government Code, does not apply to a competitive bidding
 process conducted under this chapter. Sections 271.026,
 271.027(a), and 271.0275, Local Government Code, apply to a
 competitive bidding process conducted under this chapter by a
 governmental entity as defined by Section 271.021, Local Government
 Code.
 [Sections 2267.107-2267.150 reserved for expansion]
 SUBCHAPTER D. COMPETITIVE SEALED PROPOSAL METHOD
 Sec. 2267.151.  CONTRACTS FOR FACILITIES:  COMPETITIVE
 SEALED PROPOSALS. (a)  In this chapter, "competitive sealed
 proposals" is a procurement method by which a governmental entity
 requests proposals, ranks the offerors, negotiates as prescribed,
 and then contracts with a general contractor for the construction,
 rehabilitation, alteration, or repair of a facility.
 (b)  In selecting a contractor through competitive sealed
 proposals, a governmental entity shall follow the procedures
 provided by this subchapter.
 Sec. 2267.152.  USE OF ARCHITECT OR ENGINEER. The
 governmental entity shall select or designate an architect or
 engineer to prepare construction documents for the project.
 Sec. 2267.153.  PREPARATION OF REQUEST. The governmental
 entity shall prepare a request for competitive sealed proposals
 that includes construction documents, selection criteria and the
 weighted value for each criterion, estimated budget, project scope,
 estimated project completion date, and other information that a
 contractor may require to respond to the request.
 Sec. 2267.154.  EVALUATION OF OFFERORS. (a)  The
 governmental entity shall receive, publicly open, and read aloud
 the names of the offerors and any monetary proposals made by the
 offerors.
 (b)  Not later than the 45th day after the date of opening the
 proposals, the governmental entity shall evaluate and rank each
 proposal submitted in relation to the published selection criteria.
 Sec. 2267.155.  SELECTION OF OFFEROR. (a)  The governmental
 entity shall select the offeror that submits the proposal that
 offers the best value for the governmental entity based on:
 (1)  the selection criteria in the request for proposal
 and the weighted value for those criteria in the request for
 proposal; and
 (2) its ranking evaluation.
 (b)  The governmental entity shall first attempt to
 negotiate a contract with the selected offeror. The governmental
 entity and its architect or engineer may discuss with the selected
 offeror options for a scope or time modification and any price
 change associated with the modification.
 (c)  If the governmental entity is unable to negotiate a
 contract with the selected offeror, the governmental entity shall,
 formally and in writing, end negotiations with that offeror and
 proceed to the next offeror in the order of the selection ranking
 until a contract is reached or all proposals are rejected.
 [Sections 2267.156-2267.200 reserved for expansion]
 SUBCHAPTER E. CONSTRUCTION MANAGER-AGENT METHOD
 Sec. 2267.201.  CONTRACTS FOR FACILITIES: CONSTRUCTION
 MANAGER-AGENT. (a)  In this chapter, the "construction
 manager-agent method" is a delivery method by which a governmental
 entity contracts with a construction manager-agent to provide
 consultation or administrative services during the design and
 construction phase and to manage multiple contracts with various
 construction prime contractors.
 (b)  A construction manager-agent is a sole proprietorship,
 partnership, corporation, or other legal entity that serves as the
 agent for the governmental entity by providing construction
 administration and management services described by Subsection (a)
 for the construction, rehabilitation, alteration, or repair of a
 facility.
 (c)  A governmental entity may retain a construction
 manager-agent for assistance in the construction, rehabilitation,
 alteration, or repair of a facility only as provided by this
 subchapter.
 Sec. 2267.202.  CONTRACT PROVISIONS OF CONSTRUCTION
 MANAGER-AGENT. The contract between the governmental entity and
 the construction manager-agent may require the construction
 manager-agent to provide:
 (1) administrative personnel;
 (2)  equipment necessary to perform duties under this
 subchapter;
 (3) on-site management; and
 (4) other services specified in the contract.
 Sec. 2267.203.  LIMITS ON CONSTRUCTION MANAGER-AGENT. A
 construction manager-agent may not:
 (1)  self-perform any aspect of the construction,
 rehabilitation, alteration, or repair of the facility;
 (2)  be a party to a construction subcontract for the
 construction, rehabilitation, alteration, or repair of the
 facility; or
 (3)  provide or be required to provide performance and
 payment bonds for the construction, rehabilitation, alteration, or
 repair of the facility.
 Sec. 2267.204.  FIDUCIARY CAPACITY OF CONSTRUCTION
 MANAGER-AGENT. A construction manager-agent represents the
 governmental entity in a fiduciary capacity.
 Sec. 2267.205.  USE OF ARCHITECT OR ENGINEER. (a)  On or
 before the selection of a construction manager-agent, the
 governmental entity shall select or designate an architect or
 engineer in accordance with Chapter 1051 or 1001, Occupations Code,
 as applicable, to prepare the construction documents for the
 project.
 (b)  The governmental entity's architect or engineer may not
 serve, alone or in combination with another person, as the
 construction manager-agent unless the architect or engineer is
 hired to serve as the construction manager-agent under a separate
 or concurrent selection process conducted in accordance with this
 subchapter. This subsection does not prohibit the governmental
 entity's architect or engineer from providing customary
 construction phase services under the architect's or engineer's
 original professional service agreement in accordance with
 applicable licensing laws.
 (c)  To the extent that the construction manager-agent's
 services are defined as part of the practice of architecture or
 engineering under Chapter 1051 or 1001, Occupations Code, those
 services must be conducted by a person licensed under the
 applicable chapter.
 Sec. 2267.206.  SELECTION OF CONTRACTORS. A governmental
 entity using the construction manager-agent method shall procure,
 in accordance with applicable law and in any manner authorized by
 this chapter, a general contractor or trade contractors who will
 serve as the prime contractor for their specific portion of the work
 and provide performance and payment bonds to the governmental
 entity in accordance with applicable laws.
 Sec. 2267.207.  SELECTION OF CONSTRUCTION MANAGER-AGENT. A
 governmental entity shall select a construction manager-agent on
 the basis of demonstrated competence and qualifications in the same
 manner that an architect or engineer is selected under Section
 2254.004.
 Sec. 2267.208.  INSURANCE. A construction manager-agent
 selected under this subchapter shall maintain professional
 liability or errors and omissions insurance in the amount of at
 least $1 million for each occurrence.
 [Sections 2267.209-2267.250 reserved for expansion]
 SUBCHAPTER F. CONSTRUCTION MANAGER-AT-RISK METHOD
 Sec. 2267.251.  CONTRACTS FOR FACILITIES: CONSTRUCTION
 MANAGER-AT-RISK. (a)  In this chapter, the "construction
 manager-at-risk method" is a delivery method by which a
 governmental entity contracts with an architect or engineer for
 design and construction phase services and contracts separately
 with a construction manager-at-risk to serve as the general
 contractor and to provide consultation during the design and
 construction, rehabilitation, alteration, or repair of a facility.
 (b)  A construction manager-at-risk is a sole
 proprietorship, partnership, corporation, or other legal entity
 that assumes the risk for construction, rehabilitation,
 alteration, or repair of a facility at the contracted price as a
 general contractor and provides consultation to the governmental
 entity regarding construction during and after the design of the
 facility. The contracted price may be a guaranteed maximum price.
 (c)  A governmental entity may use the construction
 manager-at-risk method in selecting a general contractor for the
 construction, rehabilitation, alteration, or repair of a facility
 only as provided by this subchapter.
 Sec. 2267.252.  USE OF ARCHITECT OR ENGINEER. (a)  On or
 before the selection of a construction manager-at-risk, the
 governmental entity shall select or designate an architect or
 engineer to prepare the construction documents for the project.
 (b)  The governmental entity's architect or engineer for a
 project may not serve, alone or in combination with another person,
 as the construction manager-at-risk unless the architect or
 engineer is hired to serve as the construction manager-at-risk
 under a separate or concurrent selection process conducted in
 accordance with this subchapter. This subsection does not prohibit
 the governmental entity's architect or engineer from providing
 customary construction phase services under the architect's or
 engineer's original professional service agreement in accordance
 with applicable licensing laws.
 Sec. 2267.253.  SELECTION PROCESS. (a)  The governmental
 entity shall select the construction manager-at-risk in a one-step
 or two-step process.
 (b)  The governmental entity shall prepare a single request
 for proposals, in the case of a one-step process, and an initial
 request for qualifications, in the case of a two-step process, that
 includes:
 (1)  a statement as to whether the selection process is
 a one-step or two-step process;
 (2)  general information on the project site, project
 scope, schedule, selection criteria and the weighted value for each
 criterion, and estimated budget and the time and place for receipt
 of the proposals or qualifications; and
 (3)  other information that may assist the governmental
 entity in its selection of a construction manager-at-risk.
 (c)  The governmental entity shall state the selection
 criteria in the request for proposals or qualifications.
 (d)  If a one-step process is used, the governmental entity
 may request, as part of the offeror's proposal, proposed fees and
 prices for fulfilling the general conditions.
 (e)  If a two-step process is used, the governmental entity
 may not request fees or prices in step one. In step two, the
 governmental entity may request that five or fewer offerors,
 selected solely on the basis of qualifications, provide additional
 information, including the construction manager-at-risk's proposed
 fee and prices for fulfilling the general conditions.
 (f)  At each step, the governmental entity shall receive,
 publicly open, and read aloud the names of the offerors. At the
 appropriate step, the governmental entity shall also read aloud the
 fees and prices, if any, stated in each proposal as the proposal is
 opened.
 (g)  Not later than the 45th day after the date of opening the
 final proposals, the governmental entity shall evaluate and rank
 each proposal submitted in relation to the criteria set forth in the
 request for proposals.
 Sec. 2267.254.  SELECTION OF OFFEROR. (a)  The governmental
 entity shall select the offeror that submits the proposal that
 offers the best value for the governmental entity based on the
 published selection criteria and on its ranking evaluation.
 (b)  The governmental entity shall first attempt to
 negotiate a contract with the selected offeror.
 (c)  If the governmental entity is unable to negotiate a
 satisfactory contract with the selected offeror, the governmental
 entity shall, formally and in writing, end negotiations with that
 offeror and proceed to negotiate with the next offeror in the order
 of the selection ranking until a contract is reached or
 negotiations with all ranked offerors end.
 (d)  Not later than the seventh day after the date the
 contract is awarded, the governmental entity shall make the
 rankings determined under Section 2267.253(g) public.
 Sec. 2267.255.  PERFORMANCE OF WORK. (a)  A construction
 manager-at-risk shall publicly advertise for bids or proposals and
 receive bids or proposals from trade contractors or subcontractors
 for the performance of all major elements of the work other than the
 minor work that may be included in the general conditions.
 (b)  A construction manager-at-risk may seek to perform
 portions of the work itself if:
 (1)  the construction manager-at-risk submits its bid
 or proposal for those portions of the work in the same manner as all
 other trade contractors or subcontractors; and
 (2)  the governmental entity determines that the
 construction manager-at-risk's bid or proposal provides the best
 value for the governmental entity.
 Sec. 2267.256.  REVIEW OF BIDS OR PROPOSALS. (a)  The
 construction manager-at-risk shall review all trade contractor or
 subcontractor bids or proposals in a manner that does not disclose
 the contents of the bid or proposal during the selection process to
 a person not employed by the construction manager-at-risk,
 architect, engineer, or governmental entity. All bids or proposals
 shall be made available to the governmental entity on request and to
 the public after the later of the award of the contract or the
 seventh day after the date of final selection of bids or proposals.
 (b)  If the construction manager-at-risk reviews, evaluates,
 and recommends to the governmental entity a bid or proposal from a
 trade contractor or subcontractor but the governmental entity
 requires another bid or proposal to be accepted, the governmental
 entity shall compensate the construction manager-at-risk by a
 change in price, time, or guaranteed maximum cost for any
 additional cost and risk that the construction manager-at-risk
 incurs because of the governmental entity's requirement that
 another bid or proposal be accepted.
 Sec. 2267.257.  DEFAULT; PERFORMANCE OF WORK. If a selected
 trade contractor or subcontractor defaults in the performance of
 its work or fails to execute a subcontract after being selected in
 accordance with this subchapter, the construction manager-at-risk
 may itself fulfill, without advertising, the contract requirements
 or select a replacement trade contractor or subcontractor to
 fulfill the contract requirements.
 Sec. 2267.258.  PERFORMANCE OR PAYMENT BOND. (a)  If a
 fixed contract amount or guaranteed maximum price has not been
 determined at the time the contract is awarded, the penal sums of
 the performance and payment bonds delivered to the governmental
 entity must each be in an amount equal to the construction budget,
 as specified in the request for proposals or qualifications.
 (b)  The construction manager-at-risk shall deliver the
 bonds not later than the 10th day after the date the construction
 manager-at-risk executes the contract unless the construction
 manager-at-risk furnishes a bid bond or other financial security
 acceptable to the governmental entity to ensure that the
 construction manager will furnish the required performance and
 payment bonds when a guaranteed maximum price is established.
 [Sections 2267.259-2267.300 reserved for expansion]
 SUBCHAPTER G. BUILDING USING DESIGN-BUILD METHOD
 Sec. 2267.301.  CONTRACTS FOR FACILITIES:  DESIGN-BUILD. In
 this chapter, "design-build" is a project delivery method by which
 a governmental entity contracts with a single entity to provide
 both design and construction services for the construction,
 rehabilitation, alteration, or repair of a facility.
 Sec. 2267.302.  APPLICABILITY OF SUBCHAPTER TO BUILDINGS;
 EXCEPTIONS. This subchapter applies only to a facility that is a
 building or an associated structure, including an electric utility
 structure. This subchapter does not apply to:
 (1)  a highway, road, street, bridge, underground
 utility, water supply project, water plant, wastewater plant, water
 and wastewater distribution or conveyance facility, wharf, dock,
 airport runway or taxiway, drainage project, or related type of
 project associated with civil engineering construction; or
 (2)  a building or structure that is incidental to a
 project that is primarily a civil engineering construction project.
 Sec. 2267.303.  CONTRACTS FOR BUILDINGS: DESIGN-BUILD. A
 governmental entity may use the design-build method for the
 construction, rehabilitation, alteration, or repair of a building
 or associated structure only as provided by this subchapter. In
 using that method, the governmental entity shall enter into a
 single contract with a design-build firm for the design and
 construction of the building or associated structure.
 Sec. 2267.304.  DESIGN-BUILD FIRMS. A design-build firm
 under this subchapter must be a sole proprietorship, partnership,
 corporation, or other legal entity or team that includes an
 architect or engineer and a construction contractor.
 Sec. 2267.305.  USE OF ARCHITECT OR ENGINEER AS INDEPENDENT
 REPRESENTATIVE. The governmental entity shall select or designate
 an architect or engineer independent of the design-build firm to
 act as the governmental entity's representative for the duration of
 the project.
 Sec. 2267.306.  PREPARATION OF REQUEST. (a)  The
 governmental entity shall prepare a request for qualifications that
 includes general information on the project site, project scope,
 budget, special systems, selection criteria and the weighted value
 for each criterion, and other information that may assist potential
 design-build firms in submitting proposals for the project.
 (b)  The governmental entity shall also prepare the design
 criteria package that includes more detailed information on the
 project. If the preparation of the design criteria package
 requires architectural or engineering services that constitute the
 practice of architecture within the meaning of Chapter 1051,
 Occupations Code, or the practice of engineering within the meaning
 of Chapter 1001, Occupations Code, those services shall be provided
 in accordance with the applicable law.
 (c)  The design criteria package must include a set of
 documents that provides sufficient information, including criteria
 for selection, to permit a design-build firm to prepare a response
 to the governmental entity's request for qualifications and to
 provide any additional information requested.  The design criteria
 package must specify criteria the governmental entity considers
 necessary to describe the project and may include, as appropriate,
 the legal description of the site, survey information concerning
 the site, interior space requirements, special material
 requirements, material quality standards, conceptual criteria for
 the project, special equipment requirements, cost or budget
 estimates, time schedules, quality assurance and quality control
 requirements, site development requirements, applicable codes and
 ordinances, provisions for utilities, parking requirements, and
 any other requirement.
 (d)  The governmental entity may not require offerors to
 submit detailed architectural or engineering designs as part of a
 proposal or a response to a request for qualifications.
 Sec. 2267.307.  EVALUATION OF DESIGN-BUILD FIRMS. (a)  For
 each design-build firm that responded to the request for
 qualifications, the governmental entity shall evaluate the firm's
 experience, technical competence, and capability to perform, the
 past performance of the firm and members of the firm, and other
 appropriate factors submitted by the firm in response to the
 request for qualifications, except that cost-related or
 price-related evaluation factors are not permitted.
 (b)  Each firm must certify to the governmental entity that
 each architect or engineer that is a member of the firm was selected
 based on demonstrated competence and qualifications, in the manner
 provided by Section 2254.004.
 (c)  The governmental entity shall qualify a maximum of five
 responders to submit proposals that contain additional information
 and, if the governmental entity chooses, to interview for final
 selection.
 (d)  The governmental entity shall evaluate the additional
 information submitted by the offerors on the basis of the selection
 criteria stated in the request for qualifications and the results
 of any interview.
 (e)  The governmental entity may request additional
 information regarding demonstrated competence and qualifications,
 considerations of the safety and long-term durability of the
 project, the feasibility of implementing the project as proposed,
 the ability of the offeror to meet schedules, or costing
 methodology. As used in this subsection, "costing methodology"
 means an offeror's policies on subcontractor markup, definition of
 general conditions, range of cost for general conditions, policies
 on retainage, policies on contingencies, discount for prompt
 payment, and expected staffing for administrative duties. The term
 does not include a guaranteed maximum price or bid for overall
 design or construction.
 (f)  The governmental entity shall rank each proposal
 submitted on the basis of the criteria set forth in the request for
 qualifications.
 Sec. 2267.308.  SELECTION OF DESIGN-BUILD FIRM. (a)  The
 governmental entity shall select the design-build firm that submits
 the proposal offering the best value for the governmental entity on
 the basis of the published selection criteria and on its ranking
 evaluations.
 (b)  The governmental entity shall first attempt to
 negotiate a contract with the selected firm.
 (c)  If the governmental entity is unable to negotiate a
 satisfactory contract with the selected firm, the governmental
 entity shall, formally and in writing, end all negotiations with
 that firm and proceed to negotiate with the next firm in the order
 of the selection ranking until a contract is reached or
 negotiations with all ranked firms end.
 (d)  Not later than the seventh day after the date the
 contract is awarded, the governmental entity shall make the
 rankings determined under Section 2267.307(f) public.
 Sec. 2267.309.  SUBMISSION OF DESIGN AFTER SELECTION. After
 selection of the design-build firm, that firm's architects or
 engineers shall submit all design elements for review and
 determination of scope compliance to the governmental entity or the
 governmental entity's architect or engineer before or concurrently
 with construction.
 Sec. 2267.310.  FINAL CONSTRUCTION DOCUMENTS. The
 design-build firm shall supply a set of construction documents for
 the completed project to the governmental entity at the conclusion
 of construction. The documents must note any changes made during
 construction.
 Sec. 2267.311.  PERFORMANCE OR PAYMENT BOND. (a)  A payment
 or performance bond is not required and may not provide coverage for
 the design portion of the design-build contract with the
 design-build firm under this subchapter.
 (b)  If a fixed contract amount or guaranteed maximum price
 has not been determined at the time the design-build contract is
 awarded, the penal sums of the performance and payment bonds
 delivered to the governmental entity must each be in an amount equal
 to the construction budget, as specified in the design criteria
 package.
 (c)  The design-build firm shall deliver the bonds not later
 than the 10th day after the date the design-build firm executes the
 contract unless the design-build firm furnishes a bid bond or other
 financial security acceptable to the governmental entity to ensure
 that the design-build firm will furnish the required performance
 and payment bonds before construction begins.
 [Sections 2267.312-2267.350 reserved for expansion]
 SUBCHAPTER H. DESIGN-BUILD PROCEDURES FOR CERTAIN CIVIL WORKS
 PROJECTS
 Sec. 2267.351. DEFINITIONS. In this subchapter:
 (1) "Civil works project" means:
 (A)  roads, streets, bridges, utilities, water
 supply projects, water plants, wastewater plants, water
 distribution and wastewater conveyance facilities, desalination
 projects, airport runways and taxiways, storm drainage and flood
 control projects, or transit projects;
 (B)  types of projects or facilities related to
 those described by Paragraph (A) and associated with civil
 engineering construction; and
 (C)  buildings or structures that are incidental
 to projects or facilities that are described by Paragraphs (A) and
 (B) and that are primarily civil engineering construction projects.
 (2)  "Design-build firm" means a partnership,
 corporation, or other legal entity or team that includes an
 engineer and a construction contractor qualified to engage in civil
 works construction in Texas.
 (3)  "Design criteria package" means a set of documents
 that:
 (A)  provides sufficient information to convey
 the intent, goals, criteria, and objectives of the civil works
 project; and
 (B) permits a design-build firm to:
 (i)  assess the scope of work and the risk
 involved; and
 (ii) submit a proposal on the project.
 Sec. 2267.352.  APPLICABILITY. This subchapter applies to a
 governmental entity with a population of more than 100,000 within
 the entity's geographic boundary or service area.
 Sec. 2267.353.  CONTRACTS FOR CIVIL WORKS PROJECTS:
 DESIGN-BUILD. (a)  A governmental entity may use the design-build
 method for the construction, rehabilitation, alteration, or repair
 of a civil works project.  In using this method and in entering into
 a contract for the services of a design-build firm, the contracting
 governmental entity and the design-build firm shall follow the
 procedures provided by this subchapter.
 (b)  A contract for a project under this subchapter may cover
 only a single integrated project. A governmental entity may not
 enter into a contract for aggregated projects at multiple
 locations. For purposes of this subsection:
 (1)  if a metropolitan transit authority created under
 Chapter 451, Transportation Code, enters into a contract for a
 project involving a bus rapid transit system created under Chapter
 451, Transportation Code, the bus rapid transit system is a single
 integrated project; and
 (2)  a water treatment plant, including a desalination
 plant, that includes treatment facilities, well fields, and
 pipelines is a single integrated project.
 (c)  A governmental entity shall use the following criteria
 as a minimum basis for determining the circumstances under which
 the design-build method is appropriate for a project:
 (1)  the extent to which the entity can adequately
 define the project requirements;
 (2)  the time constraints for the delivery of the
 project;
 (3)  the ability to ensure that a competitive
 procurement can be held; and
 (4)  the capability of the entity to manage and oversee
 the project, including the availability of experienced personnel or
 outside consultants who are familiar with the design-build method
 of project delivery.
 (d)  A governmental entity shall make a formal finding on the
 criteria described by Subsection (c) before preparing a request for
 qualifications under Section 2267.357.
 Sec. 2267.354.  LIMITATION ON NUMBER OF PROJECTS. (a)
 Before September 1, 2011:
 (1)  a governmental entity with a population of 500,000
 or more within the entity's geographic boundary or service area
 may, under this subchapter, enter into contracts for not more than
 three projects in any fiscal year; and
 (2)  a municipally owned water utility with a separate
 governing board appointed by the governing body of a municipality
 with a population of 500,000 or more may:
 (A)  independently enter into a contract for not
 more than one civil works project in any fiscal year; and
 (B)  enter into contracts for additional civil
 works projects in any fiscal year, but not more than the number of
 civil works projects prescribed by the limit in Subdivision (1) for
 the municipality, provided that:
 (i)  the additional contracts for the civil
 works projects entered into by the utility under this paragraph are
 allocated to the number of contracts the municipality that appoints
 the utility's governing board may enter under Subdivision (1); and
 (ii)  the governing body of the municipality
 must approve the contracts.
 (b)  Before September 1, 2013, a governmental entity with a
 population of 100,000 or more but less than 500,000 may, under this
 subchapter, enter into contracts for not more than two projects in
 any fiscal year.
 (c) After the period described by Subsection (a) or (b):
 (1)  a governmental entity with a population of 500,000
 or more within the entity's geographic boundary or service area
 may, under this subchapter, enter into contracts for not more than
 six projects in any fiscal year;
 (2)  a municipally owned water utility with a separate
 governing board appointed by the governing body of a municipality
 with a population of 500,000 or more may:
 (A)  independently enter into contracts for not
 more than two civil works projects in any fiscal year; and
 (B)  enter into contracts for additional civil
 works projects in any fiscal year, but not more than the number of
 civil works projects prescribed by the limit in Subdivision (1) for
 the municipality, provided that:
 (i)  the additional contracts for the civil
 works projects entered into by the utility under this paragraph are
 allocated to the number of contracts the municipality that appoints
 the utility's governing board may enter under Subdivision (1); and
 (ii)  the governing body of the municipality
 must approve the contracts; and
 (3)  a governmental entity with a population of 100,000
 or more but less than 500,000 may, under this subchapter, enter into
 contracts for not more than four projects in any fiscal year.
 (d)  For purposes of determining the number of eligible
 projects under this section, a municipally owned water utility with
 a separate governing board appointed by the governing body of the
 municipality is considered part of the municipality.
 Sec. 2267.355.  USE OF ENGINEER. (a)  The governmental
 entity shall select or designate an engineer who is independent of
 the design-build firm to act as its representative for the
 procurement process and for the duration of the work on the civil
 works project. The selected or designated engineer has full
 responsibility for complying with Chapter 1001, Occupations Code.
 (b)  If the engineer is not a full-time employee of the
 governmental entity, the governmental entity shall select the
 engineer on the basis of demonstrated competence and qualifications
 as provided by Section 2254.004.
 Sec. 2267.356.  USE OF OTHER PROFESSIONAL SERVICES.
 (a)  The governmental entity shall provide or contract for,
 independently of the design-build firm, the following services as
 necessary for the acceptance of the civil works project by the
 entity:
 (1) inspection services;
 (2)  construction materials engineering and testing;
 and
 (3) verification testing services.
 (b)  The governmental entity shall select the services for
 which it contracts under this section in accordance with Section
 2254.004.
 Sec. 2267.357.  REQUEST FOR QUALIFICATIONS. (a)  The
 governmental entity shall prepare a request for qualifications that
 includes:
 (1) information on the civil works project site;
 (2) project scope;
 (3) project budget;
 (4) project schedule;
 (5)  criteria for selection under Section 2267.359 and
 the weighting of the criteria; and
 (6)  other information that may assist potential
 design-build firms in submitting proposals for the project.
 (b)  The governmental entity shall also prepare a design
 criteria package as described by Section 2267.358.
 Sec. 2267.358.  CONTENTS OF DESIGN CRITERIA PACKAGE. A
 design criteria package may include, as appropriate:
 (1) budget or cost estimates;
 (2) information on the site;
 (3) performance criteria;
 (4) special material requirements;
 (5) initial design calculations;
 (6) known utilities;
 (7) capacity requirements;
 (8)  quality assurance and quality control
 requirements;
 (9) the type, size, and location of structures; and
 (10)  notice of any ordinances, rules, or goals adopted
 by the governmental entity relating to awarding contracts to
 historically underutilized businesses.
 Sec. 2267.359.  EVALUATION OF DESIGN-BUILD FIRMS. (a)  The
 governmental entity shall receive proposals and shall evaluate each
 offeror's experience, technical competence, and capability to
 perform, the past performance of the offeror's team and members of
 the team, and other appropriate factors submitted by the team or
 firm in response to the request for qualifications, except that
 cost-related or price-related evaluation factors are not permitted
 at this stage.
 (b) Each offeror must:
 (1)  select or designate each engineer that is a member
 of its team based on demonstrated competence and qualifications, in
 the manner provided by Section 2254.004; and
 (2)  certify to the governmental entity that each
 selection or designation was based on demonstrated competence and
 qualifications, in the manner provided by Section 2254.004.
 (c)  The governmental entity shall qualify offerors to
 submit additional information and, if the entity chooses, to
 interview for final selection.
 Sec. 2267.360.  SELECTION OF DESIGN-BUILD FIRM. The
 governmental entity shall select a design-build firm using a
 combination of technical and cost proposals as provided by Section
 2267.361.
 Sec. 2267.361.  PROCEDURES FOR COMBINATION OF TECHNICAL AND
 COST PROPOSALS. (a)  A governmental entity shall request proposals
 from design-build firms identified under Section 2267.359(c). A
 firm must submit a proposal not later than the 180th day after the
 date the governmental entity makes a public request for the
 proposals from the selected firms.  The request for proposals must
 include:
 (1) a design criteria package;
 (2)  if the project site is identified, a geotechnical
 baseline report or other information that provides the design-build
 firm minimum geotechnical design parameters to submit a proposal;
 (3)  detailed instructions for preparing the technical
 proposal and the items to be included, including a description of
 the form and level of completeness of drawings expected; and
 (4)  the relative weighting of the technical and price
 proposals and the formula by which the proposals will be evaluated
 and ranked.
 (b)  The technical proposal is a component of the proposal
 under this section.
 (c)  Each proposal must include a sealed technical proposal
 and a separate sealed cost proposal.
 (d) The technical proposal must address:
 (1) project approach;
 (2) anticipated problems;
 (3) proposed solutions to anticipated problems;
 (4) ability to meet schedules;
 (5) conceptual engineering design; and
 (6)  other information requested by the governmental
 entity.
 (e)  The governmental entity shall first open, evaluate, and
 score each responsive technical proposal submitted on the basis of
 the criteria described in the request for proposals and assign
 points on the basis of the weighting specified in the request for
 proposals. The governmental entity may reject as nonresponsive any
 firm that makes a significant change to the composition of its firm
 as initially submitted.  The governmental entity shall subsequently
 open, evaluate, and score the cost proposals from firms that
 submitted a responsive technical proposal and assign points on the
 basis of the weighting specified in the request for proposals. The
 governmental entity shall select the design-build firm in
 accordance with the formula provided in the request for proposals.
 Sec. 2267.362.  NEGOTIATION. After selecting the
 highest-ranked design-build firm under Section 2267.361, the
 governmental entity shall first attempt to negotiate a contract
 with the selected firm.  If the governmental entity is unable to
 negotiate a satisfactory contract with the selected firm, the
 entity shall, formally and in writing, end all negotiations with
 that firm and proceed to negotiate with the next firm in the order
 of the selection ranking until a contract is reached or
 negotiations with all ranked firms end.
 Sec. 2267.363.  ASSUMPTION OF RISKS. The governmental
 entity shall assume:
 (1) all risks and costs associated with:
 (A)  scope changes and modifications, as
 requested by the governmental entity;
 (B)  unknown or differing site conditions unless
 otherwise provided by the governmental entity in the request for
 proposals and final contract;
 (C)  regulatory permitting, if the governmental
 entity is responsible for those risks and costs by law or contract;
 and
 (D)  natural disasters and other force majeure
 events unless otherwise provided by the governmental entity in the
 request for proposals and final contract; and
 (2)  all costs associated with property acquisition,
 excluding costs associated with acquiring a temporary easement or
 work area associated with staging or construction for the project.
 Sec. 2267.364.  STIPEND AMOUNT FOR UNSUCCESSFUL OFFERORS.
 (a)  Unless a stipend is paid under Subsection (c), the
 design-build firm retains all rights to the work product submitted
 in a proposal. The governmental entity may not release or disclose
 to any person, including the successful offeror, the work product
 contained in an unsuccessful proposal. The governmental entity
 shall return all copies of the proposal and other information
 submitted to an unsuccessful offeror. The governmental entity or
 its agents may not make use of any unique or nonordinary design
 element, technique, method, or process contained in the
 unsuccessful proposal that was not also contained in the successful
 proposal at the time of the original submittal, unless the entity
 acquires a license from the unsuccessful offeror.
 (b)  A violation of this section voids the contract for the
 project entered into by the governmental entity. The governmental
 entity is liable to any unsuccessful offeror, or any member of the
 design-build team or its assignee, for one-half of the cost savings
 associated with the unauthorized use of the work product of the
 unsuccessful offeror. Any interested party may bring an action for
 an injunction, declaratory relief, or damages for a violation of
 this section. A party who prevails in an action under this
 subsection is entitled to reasonable attorney's fees as approved by
 the court.
 (c)  The governmental entity may offer an unsuccessful
 design-build firm that submits a response to the entity's request
 for additional information under Section 2267.361 a stipend for
 preliminary engineering costs associated with the development of
 the proposal. The stipend must be one-half of one percent of the
 contract amount and must be specified in the initial request for
 proposals. If the offer is accepted and paid, the governmental
 entity may make use of any work product contained in the proposal,
 including the techniques, methods, processes, and information
 contained in the proposal. The use by the governmental entity of
 any design element contained in an unsuccessful proposal is at the
 sole risk and discretion of the entity and does not confer liability
 on the recipient of the stipend under this subsection.
 (d)  Notwithstanding other law, including Chapter 552, work
 product contained in an unsuccessful proposal submitted and
 rejected under this subchapter is confidential and may not be
 released unless a stipend offer has been accepted and paid as
 provided by Subsection (c).
 Sec. 2267.365.  COMPLETION OF DESIGN. (a)  Following
 selection of a design-build firm under this subchapter, the firm's
 engineers shall submit all design elements for review and
 determination of scope compliance to the governmental entity before
 or concurrently with construction.
 (b)  An appropriately licensed design professional shall
 sign and seal construction documents before the documents are
 released for construction.
 Sec. 2267.366.  FINAL CONSTRUCTION DOCUMENTS. At the
 conclusion of construction, the design-build firm shall supply to
 the governmental entity a record set of construction documents for
 the project prepared as provided by Chapter 1001, Occupations Code.
 Sec. 2267.367.  PERFORMANCE OR PAYMENT BOND. (a)  A
 performance or payment bond is not required for the portion of a
 design-build contract under this section that includes design
 services only.
 (b)  If a fixed contract amount or guaranteed maximum price
 has not been determined at the time a design-build contract is
 awarded, the penal sums of the performance and payment bonds
 delivered to the governmental entity must each be in an amount equal
 to the construction budget, if commercially available and
 practical, as specified in the design criteria package.
 (c)  If the governmental entity awards a design-build
 contract under Section 2267.362, the design-build firm shall
 deliver the bonds not later than the 10th day after the date the
 design-build firm executes the contract unless the design-build
 firm furnishes a bid bond or other financial security acceptable to
 the governmental entity to ensure that the design-build firm will
 furnish the required performance and payment bonds before the
 commencement of construction.
 [Sections 2267.368-2267.400 reserved for expansion]
 SUBCHAPTER I. JOB ORDER CONTRACTS METHOD
 Sec. 2267.401.  JOB ORDER CONTRACTING. In this chapter,
 "job order contracting" is a procurement method used for
 maintenance, repair, alteration, renovation, remediation, or minor
 construction of a facility when the work is of a recurring nature
 but the delivery times, type, and quantities of work required are
 indefinite.
 Sec. 2267.402.  APPLICABILITY OF SUBCHAPTER TO BUILDINGS;
 EXCEPTIONS. This subchapter applies only to a facility that is a
 building, the design and construction of which is governed by
 accepted building codes, or a structure or land, whether improved
 or unimproved, that is associated with a building. This subchapter
 does not apply to:
 (1)  a highway, road, street, bridge, utility, water
 supply project, water plant, wastewater plant, water and wastewater
 distribution or conveyance facility, wharf, dock, airport runway or
 taxiway, drainage project, or related type of project associated
 with civil engineering construction; or
 (2)  a building or structure that is incidental to a
 project that is primarily a civil engineering construction project.
 Sec. 2267.403.  REQUIREMENTS FOR JOB ORDER CONTRACTS FOR
 FACILITIES. (a)  A governmental entity may award job order
 contracts for the maintenance, repair, alteration, renovation,
 remediation, or minor construction of a facility if:
 (1)  the work is of a recurring nature but the delivery
 times are indefinite; and
 (2)  indefinite quantities and orders are awarded
 substantially on the basis of predescribed and prepriced tasks.
 (b)  The governmental entity shall establish the maximum
 aggregate contract price when it advertises the proposal.
 (c)  The governing body of a governmental entity shall
 approve each job order that exceeds:
 (1) $500,000 under the contract; or
 (2)  a lesser amount as established by the governing
 body.
 Sec. 2267.404.  CONTRACTUAL UNIT PRICES. The governmental
 entity may establish contractual unit prices for a job order
 contract by:
 (1)  specifying one or more published construction unit
 price books and the applicable divisions or line items; or
 (2)  providing a list of work items and requiring the
 offerors to propose one or more coefficients or multipliers to be
 applied to the price book or prepriced work items as the price
 proposal.
 Sec. 2267.405.  COMPETITIVE SEALED PROPOSAL METHOD. (a)  A
 governmental entity may use the competitive sealed proposal method
 under Subchapter D for job order contracts.
 (b)  The governmental entity shall advertise for, receive,
 and publicly open sealed proposals for job order contracts.
 (c)  The governmental entity may require offerors to submit
 information in addition to rates, including experience, past
 performance, and proposed personnel and methodology.
 Sec. 2267.406.  AWARDING OF JOB ORDER CONTRACTS. The
 governmental entity may award job order contracts to one or more job
 order contractors in connection with each solicitation of
 proposals.
 Sec. 2267.407.  USE OF JOB ORDER CONTRACT. A job order
 contract may be used to accomplish work only for the governmental
 entity that awards the contract unless:
 (1)  the solicitation for the job order contract and
 the contract specifically provide for use by other persons; or
 (2)  the governmental entity enters into an interlocal
 agreement that provides otherwise.
 Sec. 2267.408.  USE OF ARCHITECT OR ENGINEER. If a job order
 contract or an order issued under the contract requires
 architectural or engineering services that constitute the practice
 of architecture within the meaning of Chapter 1051, Occupations
 Code, or the practice of engineering within the meaning of Chapter
 1001, Occupations Code, the governmental entity shall select or
 designate an architect or engineer to prepare the construction
 documents for the project.
 Sec. 2267.409.  JOB ORDER CONTRACT TERM. The base term for a
 job order contract may not exceed two years. The governmental
 entity may renew the contract annually for not more than three
 additional years.
 Sec. 2267.410.  JOB ORDERS. (a)  An order for a job or
 project under a job order contract must be signed by the
 governmental entity's representative and the contractor.
 (b) The order may be:
 (1)  a fixed price, lump-sum contract based
 substantially on contractual unit pricing applied to estimated
 quantities; or
 (2)  a unit price order based on the quantities and line
 items delivered.
 Sec. 2267.411.  PAYMENT AND PERFORMANCE BONDS. The
 contractor shall provide payment and performance bonds, if required
 by law, based on the amount or estimated amount of any order.
 [Sections 2267.412-2267.450 reserved for expansion]
 SUBCHAPTER J. ENFORCEMENT
 Sec. 2267.451.  VOID CONTRACT. (a)  A contract, including a
 job order, entered into in violation of this chapter and any bonds
 issued in connection with the contract are voidable as against
 public policy.
 (b)  An action to void a contract under this section does not
 excuse the obligation of the governmental entity to pay for any
 service performed or material delivered in good faith by a
 contractor, architect, engineer, design-builder, or construction
 manager before the date on which the contract is determined to be
 void.
 Sec. 2267.452.  DECLARATORY OR INJUNCTIVE RELIEF. (a)  This
 chapter may be enforced through an action for declaratory or
 injunctive relief filed not later than the 10th day after the date
 on which the contract is awarded.
 (b)  This section does not apply to enforcement of a contract
 entered into by a state agency.  In this subsection, "state agency"
 has the meaning assigned by Section 2151.002. The term includes the
 Texas Facilities Commission.
 SECTION 2.13. Section 252.048, Local Government Code, is
 amended by adding Subsection (c-1) to read as follows:
 (c-1)  If a change order for a public works contract in a
 municipality with a population of 500,000 or more involves a
 decrease or an increase of $100,000 or less, or a lesser amount as
 provided by ordinance, the governing body of the municipality may
 grant general authority to an administrative official of the
 municipality to approve the change order.
 SECTION 2.14. Section 271.054, Local Government Code, is
 amended to read as follows:
 Sec. 271.054. COMPETITIVE BIDDING REQUIREMENT. Before the
 governing body of an issuer may enter into a contract requiring an
 expenditure by or imposing an obligation or liability on the
 issuer, or on a subdivision of the issuer if the issuer is a county,
 of more than $50,000 [$25,000], the governing body must:
 (1) submit the proposed contract to competitive
 bidding; or
 (2)  use an alternate method of project delivery
 authorized by Chapter 2267, Government Code.
 SECTION 2.15. Section 271.060, Local Government Code, is
 amended by amending Subsection (b) and adding Subsection (c) to
 read as follows:
 (b) The total price of a contract may not be increased by a
 change order unless provision has been made for the payment of the
 added cost by the appropriation of current funds or bond funds for
 that purpose, by the authorization of the issuance of certificates,
 or by a combination of those procedures.
 (c) A contract with an [The] original contract price of $1
 million or more may not be increased by more than 25 percent. If a
 change order for a contract with an original contract price of less
 than $1 million increases the contract amount to $1 million or more,
 subsequent change orders may not increase the revised contract
 amount by more than 25 percent [The original price may not be
 decreased by more than 25 percent without the consent of the
 contractor].
 ARTICLE 3. ADDITIONAL EXEMPTIONS
 SECTION 3.01. Section 44.901, Education Code, is amended by
 adding Subsection (j) to read as follows:
 (j)  Chapter 2267, Government Code, does not apply to this
 section.
 SECTION 3.02. Section 51.927, Education Code, is amended by
 adding Subsection (k) to read as follows:
 (k)  Chapter 2267, Government Code, does not apply to this
 section.
 SECTION 3.03. Section 2166.406, Government Code, is amended
 by adding Subsection (k) to read as follows:
 (k) Chapter 2267 does not apply to this section.
 SECTION 3.04. Chapter 302, Local Government Code, is
 amended by adding Section 302.007 to read as follows:
 Sec. 302.007.  EXEMPTION FROM OTHER CONTRACTING LAW.
 Chapter 2267, Government Code, does not apply to this chapter.
 SECTION 3.05. Subchapter E, Chapter 335, Local Government
 Code, is amended by adding Section 335.077 to read as follows:
 Sec. 335.077.  EXEMPTION FROM CONSTRUCTION CONTRACTING LAW.
 Chapter 2267, Government Code, does not apply to this chapter.
 SECTION 3.06. Section 370.305, Transportation Code, is
 amended by adding Subsection (c-1) to read as follows:
 (c-1)  Chapter 2267, Government Code, does not apply to
 agreements entered into pursuant to this section.
 SECTION 3.07. Subchapter Q, Chapter 451, Transportation
 Code, is amended by adding Section 451.8025 to read as follows:
 Sec. 451.8025.  EXEMPTION FROM OTHER CONTRACTING LAW.
 Chapter 2267, Government Code, does not apply to this subchapter.
 SECTION 3.08. Subchapter C, Chapter 452, Transportation
 Code, is amended by adding Section 452.1095 to read as follows:
 Sec. 452.1095.  EXEMPTION FROM OTHER CONTRACTING LAW FOR
 CERTAIN AUTHORITIES. Chapter 2267, Government Code, does not apply
 to an authority consisting of one subregion governed by a
 subregional board created under Subchapter O.
 SECTION 3.09. Section 60.401, Water Code, is amended by
 adding Subsection (d) to read as follows:
 (d)  Chapter 2267, Government Code, does not apply to this
 subchapter.
 SECTION 3.10. Section 60.452, Water Code, is amended by
 adding Subsection (d) to read as follows:
 (d)  Chapter 2267, Government Code, does not apply to this
 subchapter.
 ARTICLE 4. CONFORMING AMENDMENTS
 SECTION 4.01. Section 252.021(a), Local Government Code, is
 amended to read as follows:
 (a) Before a municipality may enter into a contract that
 requires an expenditure of more than $50,000 from one or more
 municipal funds, the municipality must:
 (1) comply with the procedure prescribed by this
 subchapter and Subchapter C for competitive sealed bidding or
 competitive sealed proposals;
 (2) use the reverse auction procedure, as defined by
 Section 2155.062(d), Government Code, for purchasing; or
 (3) comply with a method described by Chapter 2267,
 Government Code [Subchapter H or J, Chapter 271].
 SECTION 4.02. Section 252.022(d), Local Government Code, is
 amended to read as follows:
 (d) This chapter does not apply to an expenditure described
 by Section 252.021(a) if the governing body of a municipality
 determines that a method described by Chapter 2267, Government Code
 [Subchapter H, Chapter 271], provides a better value for the
 municipality with respect to that expenditure than the procedures
 described in this chapter and the municipality adopts and uses a
 method described in that subchapter with respect to that
 expenditure.
 SECTION 4.03. Section 366.185(d-1), Transportation Code,
 is amended to read as follows:
 (d-1) The rules adopted under Subsection (d) may not
 materially conflict with the design-build procedures provided by
 Subchapter H [J], Chapter 2267 [271], [Local] Government Code, and
 shall provide materially similar injunctive and declaratory action
 enforcement rights regarding the improper disclosure or use of
 unique or nonordinary information as provided in that subchapter.
 SECTION 4.04. Section 370.314(b), Transportation Code, is
 amended to read as follows:
 (b) Procedures adopted under Subsection (a) may not
 materially conflict with the design-build procedures provided by
 Subchapter H [J], Chapter 2267 [271], [Local] Government Code.
 ARTICLE 5. REPEALER
 SECTION 5.01. The following are repealed:
 (1) Sections 44.0315, 44.035, 44.036, 44.037, 44.038,
 44.039, 44.040, and 44.041, Education Code;
 (2) Sections 2166.2511, 2166.2526, 2166.2531,
 2166.2532, 2166.2533, and 2166.2535, Government Code;
 (3) Subsection (d-1), Section 252.043, Local
 Government Code;
 (4) Subchapters H and J, Chapter 271, Local Government
 Code; and
 (5) Subsection (e), Section 431.101, Transportation
 Code.
 ARTICLE 6. TRANSITION; EFFECTIVE DATE
 SECTION 6.01. (a) The changes in law made by this Act apply
 only to a contract or construction project for which a governmental
 entity first advertises or otherwise requests bids, proposals,
 offers, or qualifications, or makes a similar solicitation, on or
 after the effective date of this Act.
 (b) A contract or construction project for which a
 governmental entity first advertises or otherwise requests bids,
 proposals, offers, or qualifications, or makes a similar
 solicitation, before the effective date of this Act is governed by
 the law as it existed immediately before the effective date of this
 Act, and that law is continued in effect for that purpose.
 SECTION 6.02. This Act takes effect September 1, 2009.