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Texas House Bill HB3563

Texas 2025 - 89th Regular

Texas House Bill HB3563 Compare Versions

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11 89R5624 SRA-F
22 By: Paul H.B. No. 3563
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77 A BILL TO BE ENTITLED
88 AN ACT
99 relating to the method used to select engineers and general
1010 contractors for certain transportation-related construction
1111 projects.
1212 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1313 SECTION 1. Chapter 223, Transportation Code, is amended by
1414 adding Subchapter G to read as follows:
1515 SUBCHAPTER G. CONSTRUCTION MANAGER-GENERAL CONTRACTOR METHOD
1616 Sec. 223.301. DEFINITION. In this subchapter,
1717 "construction manager-general contractor method" means a delivery
1818 method by which the department contracts with an engineer for
1919 design and construction phase services and contracts separately
2020 with a construction manager to serve as the general contractor and
2121 to provide consultation during the design and construction of a
2222 state highway.
2323 Sec. 223.302. USE OF CONSTRUCTION MANAGER-GENERAL
2424 CONTRACTOR METHOD. Notwithstanding any other law requiring a
2525 particular procurement procedure, including Subchapter A of this
2626 chapter, the department may use the construction manager-general
2727 contractor method to select a general contractor for a state
2828 highway project as provided by this subchapter.
2929 Sec. 223.303. CONSTRUCTION MANAGER. (a) For purposes of
3030 this subchapter, a construction manager may be a sole
3131 proprietorship, partnership, corporation, or other legal entity.
3232 (b) A construction manager serves as the general contractor
3333 for a state highway project and assumes the risk for the
3434 construction of the state highway at the contracted price.
3535 (c) A construction manager shall provide consultation to
3636 the department regarding construction of a state highway project
3737 during and after the design of the project, including consultation
3838 regarding preconstruction services such as scheduling, pricing,
3939 phasing, technical innovations, site investigation, and risk
4040 mitigation.
4141 (d) The contracted price may be a guaranteed maximum price
4242 or converted to a lump sum.
4343 Sec. 223.304. USE OF ENGINEER. (a) On or before the
4444 selection of a construction manager, the department shall select an
4545 engineer to prepare the construction documents for the state
4646 highway project.
4747 (b) The engineer selected for a state highway project under
4848 Section 223.041 may not serve, alone or in combination with another
4949 person, as the construction manager for that project.
5050 (c) Subsection (b) does not prohibit the engineer from
5151 providing customary construction phase services under the
5252 engineer's contract with the department in accordance with
5353 applicable licensing laws.
5454 Sec. 223.305. ADOPTION OF CRITERIA AND RULES. (a) The
5555 department shall adopt weighted selection criteria and rules for
5656 the selection process and award of contracts under this subchapter,
5757 which may include interviews with top-ranked offerors.
5858 (b) The rules adopted under Subsection (a) must address the
5959 selection process applicable to the award of a contract for
6060 preconstruction services and for construction management and
6161 construction services, including the process for contract
6262 negotiations with the construction manager for construction of the
6363 project or work packages associated with the project in accordance
6464 with contract documents.
6565 Sec. 223.306. EVALUATION TEAM. (a) Before preparing a
6666 request under Section 223.307 for a state highway project, the
6767 director shall appoint a team of at least three members to assist
6868 the department in evaluating proposals and qualifications received
6969 by the department. The members may be department employees or
7070 outside consultants.
7171 (b) At least one-half, or as near one-half as possible, of
7272 the team members must be engineers registered in this state. An
7373 engineer who serves on the team and is not a department employee may
7474 not otherwise be involved in the project for which the request is
7575 prepared under Section 223.307.
7676 (c) The team must include at least one person who is a senior
7777 management employee of a general contractor that:
7878 (1) is registered as a prequalified general contractor
7979 under department rules;
8080 (2) is not involved in the project for which the
8181 request is prepared under Section 223.307; and
8282 (3) has no other conflict of interest as determined by
8383 the department.
8484 Sec. 223.307. SELECTION PROCESS. (a) The department may
8585 select the construction manager in a one-step or two-step process.
8686 (b) The department shall prepare a single request for
8787 proposals, in the case of a one-step process, and an initial request
8888 for qualifications followed by a request for proposals and any
8989 required interviews, in the case of a two-step process. A request
9090 prepared under this subsection must include:
9191 (1) a statement as to whether the selection process is
9292 a one-step or two-step process;
9393 (2) information regarding the project's location,
9494 scope, and limits;
9595 (3) publicly available cost estimates and a budget for
9696 the project;
9797 (4) information regarding funding that may be
9898 available for the project;
9999 (5) the selection criteria adopted under Section
100100 223.305 and the relative weighted value for each criterion;
101101 (6) the time and place for receipt of qualifications
102102 or proposals, as applicable; and
103103 (7) any other information that may assist the
104104 department in the selection of a construction manager.
105105 (c) If a one-step process is used, the department may
106106 request, as part of the offeror's proposal, the offeror's:
107107 (1) proposed billable rates for preconstruction
108108 services personnel;
109109 (2) proposed fee for home office overhead; and
110110 (3) profit fee on the negotiated construction price
111111 for performing construction services.
112112 (d) If a two-step process is used, the department may not
113113 request proposed billable rates, fees, or prices in step one. In
114114 step two, the department may request that five or fewer offerors,
115115 selected on the basis of qualifications, experience, technical
116116 competence, and ability to develop the project, provide additional
117117 information, including the offeror's:
118118 (1) proposed billable rates for preconstruction
119119 services and general conditions personnel;
120120 (2) proposed fee for home office overhead; and
121121 (3) profit fee on the negotiated construction price
122122 for performing construction services.
123123 (e) If a one-step process is used, proposed billable rates
124124 for general conditions personnel must be negotiated on selection of
125125 the construction manager.
126126 Sec. 223.308. SELECTION OF CONSTRUCTION MANAGER. (a) The
127127 department shall:
128128 (1) rank the offerors in accordance with the selection
129129 criteria provided in the request for proposals under Section
130130 223.307(b)(5); and
131131 (2) select the offeror that submits the proposal with
132132 the highest ranking.
133133 (b) The award of a preconstruction services contract under
134134 Subsection (a) authorizes the construction manager to:
135135 (1) provide consultation to the department and project
136136 engineer; and
137137 (2) enter into open and transparent negotiations with
138138 the department during the design phase of the project to refine the
139139 project's cost and schedule for the construction management and
140140 construction services contract.
141141 (c) The department shall use the services of an independent
142142 cost estimator for each work package associated with the project to
143143 validate the negotiated costs for the construction management and
144144 construction services contract. The independent cost estimator
145145 shall follow procedures outlined in the Federal Highway
146146 Administration Major Project Program Cost Estimating Guidance, as
147147 it existed on September 1, 2025, and as adapted by the department.
148148 (d) On successful negotiations under Subsection (b)(2), the
149149 department shall execute a construction management and
150150 construction services contract with the construction manager for
151151 either construction of the project or selected work packages
152152 associated with the project.
153153 (e) Negotiations under Subsection (b)(2) shall be
154154 terminated if the department is unable to reach a price agreement
155155 with the construction manager. If negotiations are terminated, the
156156 department may competitively bid the construction of the project in
157157 accordance with the department's procedures under Subchapter A.
158158 (f) Not later than the seventh day after the date a
159159 preconstruction services contract is awarded under this section,
160160 the department shall make public the selection rankings determined
161161 under Subsection (a).
162162 Sec. 223.309. PERFORMANCE OF WORK. (a) A construction
163163 manager shall perform a minimum percentage of construction work,
164164 excluding general conditions work, as required by the department's
165165 rules regarding standard specifications for highway and bridge
166166 construction.
167167 (b) A construction manager shall publicly advertise for
168168 bids or proposals and receive bids or proposals from subcontractors
169169 for the performance of the remaining construction work.
170170 Sec. 223.310. PERFORMANCE OR PAYMENT BOND. The
171171 construction manager shall deliver any performance and payment
172172 bonds not later than the 10th day after the date the construction
173173 manager is awarded a preconstruction services contract under
174174 Section 223.308 unless the construction manager furnishes a bid
175175 bond or other financial security acceptable to the department to
176176 ensure that the construction manager will furnish the required
177177 performance and payment bonds when a guaranteed maximum price is
178178 established.
179179 SECTION 2. Chapter 370, Transportation Code, is amended by
180180 adding Subchapter L to read as follows:
181181 SUBCHAPTER L. CONSTRUCTION MANAGER-GENERAL CONTRACTOR METHOD
182182 Sec. 370.451. DEFINITION. In this subchapter,
183183 "construction manager-general contractor method" means a delivery
184184 method by which an authority contracts with an engineer for design
185185 and construction phase services and contracts separately with a
186186 construction manager to serve as the general contractor and to
187187 provide consultation during the design and construction of a
188188 transportation project.
189189 Sec. 370.452. USE OF CONSTRUCTION MANAGER-GENERAL
190190 CONTRACTOR METHOD. Notwithstanding any other law requiring a
191191 particular procurement procedure, including Subchapter E of this
192192 chapter, an authority may use the construction manager-general
193193 contractor method to select a general contractor for a
194194 transportation project as provided by this subchapter.
195195 Sec. 370.453. CONSTRUCTION MANAGER. (a) For purposes of
196196 this subchapter, a construction manager may be a sole
197197 proprietorship, partnership, corporation, or other legal entity.
198198 (b) A construction manager serves as the general contractor
199199 for a transportation project and assumes the risk for the
200200 construction of the project at the contracted price.
201201 (c) A construction manager shall provide consultation to an
202202 authority regarding construction of a transportation project
203203 during and after the design of the project, including consultation
204204 regarding preconstruction services such as scheduling, pricing,
205205 phasing, technical innovations, site investigation, and risk
206206 mitigation.
207207 (d) The contracted price may be a guaranteed maximum price
208208 or converted to a lump sum.
209209 Sec. 370.454. USE OF ENGINEER. On or before the selection
210210 of a construction manager, an authority shall select an engineer to
211211 prepare the construction documents for the transportation project.
212212 Sec. 370.455. ADOPTION OF CRITERIA AND RULES. (a) An
213213 authority shall adopt weighted selection criteria and rules for the
214214 selection process and award of contracts under this subchapter,
215215 which may include interviews with top-ranked offerors.
216216 (b) The rules adopted under Subsection (a) must address the
217217 selection process applicable to the award of a contract for
218218 preconstruction services and for construction management and
219219 construction services, including the process for contract
220220 negotiations with the construction manager for construction of the
221221 project or work packages associated with the project in accordance
222222 with contract documents.
223223 Sec. 370.456. EVALUATION TEAM. (a) Before preparing a
224224 request under Section 370.457 for a transportation project, an
225225 authority shall appoint a team of at least three members to assist
226226 the authority in evaluating proposals and qualifications received
227227 by the authority. The members may be authority employees or outside
228228 consultants.
229229 (b) At least one-half, or as near one-half as possible, of
230230 the team members must be engineers registered in this state. An
231231 engineer who serves on the team and is not an authority employee may
232232 not otherwise be involved in the project for which the request is
233233 prepared under Section 370.457.
234234 (c) The team must include at least one person who is a senior
235235 management employee of a general contractor that:
236236 (1) is registered as a prequalified general contractor
237237 under department rules;
238238 (2) is not involved in the project for which the
239239 request is prepared under Section 370.457; and
240240 (3) has no other conflict of interest as determined by
241241 the authority.
242242 Sec. 370.457. SELECTION PROCESS. (a) An authority may
243243 select the construction manager in a one-step or two-step process.
244244 (b) An authority shall prepare a single request for
245245 proposals, in the case of a one-step process, and an initial request
246246 for qualifications followed by a request for proposals and any
247247 required interviews, in the case of a two-step process. A request
248248 prepared under this subsection must include:
249249 (1) a statement as to whether the selection process is
250250 a one-step or two-step process;
251251 (2) information regarding the project's location,
252252 scope, and limits;
253253 (3) publicly available cost estimates and a budget for
254254 the project;
255255 (4) information regarding funding that may be
256256 available for the project;
257257 (5) the selection criteria adopted under Section
258258 370.455 and the relative weighted value for each criterion;
259259 (6) the time and place for receipt of qualifications
260260 or proposals, as applicable; and
261261 (7) any other information that may assist the
262262 authority in the selection of a construction manager.
263263 (c) If a one-step process is used, an authority may request,
264264 as part of the offeror's proposal, the offeror's:
265265 (1) proposed billable rates for preconstruction
266266 services personnel;
267267 (2) proposed fee for home office overhead; and
268268 (3) profit fee on the negotiated construction price
269269 for performing construction services.
270270 (d) If a two-step process is used, an authority may not
271271 request proposed billable rates, fees, or prices in step one. In
272272 step two, an authority may request that five or fewer offerors,
273273 selected on the basis of qualifications, experience, technical
274274 competence, and ability to develop the project, provide additional
275275 information, including the offeror's:
276276 (1) proposed billable rates for preconstruction
277277 services and general conditions personnel;
278278 (2) proposed fee for home office overhead; and
279279 (3) profit fee on the negotiated construction price
280280 for performing construction services.
281281 (e) If a one-step process is used, proposed billable rates
282282 for general conditions personnel must be negotiated on selection of
283283 the construction manager.
284284 Sec. 370.458. SELECTION OF CONSTRUCTION MANAGER. (a) An
285285 authority shall:
286286 (1) rank the offerors in accordance with the selection
287287 criteria provided in the request for proposals under Section
288288 370.457(b)(5); and
289289 (2) select the offeror that submits the proposal with
290290 the highest ranking.
291291 (b) The award of a preconstruction services contract under
292292 Subsection (a) authorizes the construction manager to:
293293 (1) provide consultation to the authority and project
294294 engineer; and
295295 (2) enter into open and transparent negotiations with
296296 the authority during the design phase of the project to refine the
297297 project's cost and schedule for the construction management and
298298 construction services contract.
299299 (c) An authority shall use the services of an independent
300300 cost estimator for each work package associated with the project to
301301 validate the negotiated costs for the construction management and
302302 construction services contract. The independent cost estimator
303303 shall follow procedures outlined in the Federal Highway
304304 Administration Major Project Program Cost Estimating Guidance, as
305305 it existed on September 1, 2025, and as adapted by the department.
306306 (d) On successful negotiations under Subsection (b)(2), the
307307 authority shall execute a construction management and construction
308308 services contract with the construction manager for either
309309 construction of the project or selected work packages associated
310310 with the project.
311311 (e) Negotiations under Subsection (b)(2) shall be
312312 terminated if the authority is unable to reach a price agreement
313313 with the construction manager. If negotiations are terminated, the
314314 authority may competitively bid the construction of the project in
315315 accordance with the authority's procedures under Subchapter E.
316316 (f) Not later than the seventh day after the date a
317317 preconstruction services contract is awarded under this section,
318318 the authority shall make public the selection rankings determined
319319 under Subsection (a).
320320 Sec. 370.459. PERFORMANCE OR PAYMENT BOND. The
321321 construction manager shall deliver any performance and payment
322322 bonds not later than the 10th day after the date the construction
323323 manager is awarded a preconstruction services contract under
324324 Section 370.458 unless the construction manager furnishes a bid
325325 bond or other financial security acceptable to the authority to
326326 ensure that the construction manager will furnish the required
327327 performance and payment bonds when a guaranteed maximum price is
328328 established.
329329 SECTION 3. This Act takes effect immediately if it receives
330330 a vote of two-thirds of all the members elected to each house, as
331331 provided by Section 39, Article III, Texas Constitution. If this
332332 Act does not receive the vote necessary for immediate effect, this
333333 Act takes effect September 1, 2025.