89R5624 SRA-F
By: Paul H.B. No. 3563
A BILL TO BE ENTITLED
AN ACT
relating to the method used to select engineers and general
contractors for certain transportation-related construction
projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 223, Transportation Code, is amended by
adding Subchapter G to read as follows:
SUBCHAPTER G. CONSTRUCTION MANAGER-GENERAL CONTRACTOR METHOD
Sec. 223.301. DEFINITION. In this subchapter,
"construction manager-general contractor method" means a delivery
method by which the department contracts with an engineer for
design and construction phase services and contracts separately
with a construction manager to serve as the general contractor and
to provide consultation during the design and construction of a
state highway.
Sec. 223.302. USE OF CONSTRUCTION MANAGER-GENERAL
CONTRACTOR METHOD. Notwithstanding any other law requiring a
particular procurement procedure, including Subchapter A of this
chapter, the department may use the construction manager-general
contractor method to select a general contractor for a state
highway project as provided by this subchapter.
Sec. 223.303. CONSTRUCTION MANAGER. (a) For purposes of
this subchapter, a construction manager may be a sole
proprietorship, partnership, corporation, or other legal entity.
(b) A construction manager serves as the general contractor
for a state highway project and assumes the risk for the
construction of the state highway at the contracted price.
(c) A construction manager shall provide consultation to
the department regarding construction of a state highway project
during and after the design of the project, including consultation
regarding preconstruction services such as scheduling, pricing,
phasing, technical innovations, site investigation, and risk
mitigation.
(d) The contracted price may be a guaranteed maximum price
or converted to a lump sum.
Sec. 223.304. USE OF ENGINEER. (a) On or before the
selection of a construction manager, the department shall select an
engineer to prepare the construction documents for the state
highway project.
(b) The engineer selected for a state highway project under
Section 223.041 may not serve, alone or in combination with another
person, as the construction manager for that project.
(c) Subsection (b) does not prohibit the engineer from
providing customary construction phase services under the
engineer's contract with the department in accordance with
applicable licensing laws.
Sec. 223.305. ADOPTION OF CRITERIA AND RULES. (a) The
department shall adopt weighted selection criteria and rules for
the selection process and award of contracts under this subchapter,
which may include interviews with top-ranked offerors.
(b) The rules adopted under Subsection (a) must address the
selection process applicable to the award of a contract for
preconstruction services and for construction management and
construction services, including the process for contract
negotiations with the construction manager for construction of the
project or work packages associated with the project in accordance
with contract documents.
Sec. 223.306. EVALUATION TEAM. (a) Before preparing a
request under Section 223.307 for a state highway project, the
director shall appoint a team of at least three members to assist
the department in evaluating proposals and qualifications received
by the department. The members may be department employees or
outside consultants.
(b) At least one-half, or as near one-half as possible, of
the team members must be engineers registered in this state. An
engineer who serves on the team and is not a department employee may
not otherwise be involved in the project for which the request is
prepared under Section 223.307.
(c) The team must include at least one person who is a senior
management employee of a general contractor that:
(1) is registered as a prequalified general contractor
under department rules;
(2) is not involved in the project for which the
request is prepared under Section 223.307; and
(3) has no other conflict of interest as determined by
the department.
Sec. 223.307. SELECTION PROCESS. (a) The department may
select the construction manager in a one-step or two-step process.
(b) The department shall prepare a single request for
proposals, in the case of a one-step process, and an initial request
for qualifications followed by a request for proposals and any
required interviews, in the case of a two-step process. A request
prepared under this subsection must include:
(1) a statement as to whether the selection process is
a one-step or two-step process;
(2) information regarding the project's location,
scope, and limits;
(3) publicly available cost estimates and a budget for
the project;
(4) information regarding funding that may be
available for the project;
(5) the selection criteria adopted under Section
223.305 and the relative weighted value for each criterion;
(6) the time and place for receipt of qualifications
or proposals, as applicable; and
(7) any other information that may assist the
department in the selection of a construction manager.
(c) If a one-step process is used, the department may
request, as part of the offeror's proposal, the offeror's:
(1) proposed billable rates for preconstruction
services personnel;
(2) proposed fee for home office overhead; and
(3) profit fee on the negotiated construction price
for performing construction services.
(d) If a two-step process is used, the department may not
request proposed billable rates, fees, or prices in step one. In
step two, the department may request that five or fewer offerors,
selected on the basis of qualifications, experience, technical
competence, and ability to develop the project, provide additional
information, including the offeror's:
(1) proposed billable rates for preconstruction
services and general conditions personnel;
(2) proposed fee for home office overhead; and
(3) profit fee on the negotiated construction price
for performing construction services.
(e) If a one-step process is used, proposed billable rates
for general conditions personnel must be negotiated on selection of
the construction manager.
Sec. 223.308. SELECTION OF CONSTRUCTION MANAGER. (a) The
department shall:
(1) rank the offerors in accordance with the selection
criteria provided in the request for proposals under Section
223.307(b)(5); and
(2) select the offeror that submits the proposal with
the highest ranking.
(b) The award of a preconstruction services contract under
Subsection (a) authorizes the construction manager to:
(1) provide consultation to the department and project
engineer; and
(2) enter into open and transparent negotiations with
the department during the design phase of the project to refine the
project's cost and schedule for the construction management and
construction services contract.
(c) The department shall use the services of an independent
cost estimator for each work package associated with the project to
validate the negotiated costs for the construction management and
construction services contract. The independent cost estimator
shall follow procedures outlined in the Federal Highway
Administration Major Project Program Cost Estimating Guidance, as
it existed on September 1, 2025, and as adapted by the department.
(d) On successful negotiations under Subsection (b)(2), the
department shall execute a construction management and
construction services contract with the construction manager for
either construction of the project or selected work packages
associated with the project.
(e) Negotiations under Subsection (b)(2) shall be
terminated if the department is unable to reach a price agreement
with the construction manager. If negotiations are terminated, the
department may competitively bid the construction of the project in
accordance with the department's procedures under Subchapter A.
(f) Not later than the seventh day after the date a
preconstruction services contract is awarded under this section,
the department shall make public the selection rankings determined
under Subsection (a).
Sec. 223.309. PERFORMANCE OF WORK. (a) A construction
manager shall perform a minimum percentage of construction work,
excluding general conditions work, as required by the department's
rules regarding standard specifications for highway and bridge
construction.
(b) A construction manager shall publicly advertise for
bids or proposals and receive bids or proposals from subcontractors
for the performance of the remaining construction work.
Sec. 223.310. PERFORMANCE OR PAYMENT BOND. The
construction manager shall deliver any performance and payment
bonds not later than the 10th day after the date the construction
manager is awarded a preconstruction services contract under
Section 223.308 unless the construction manager furnishes a bid
bond or other financial security acceptable to the department to
ensure that the construction manager will furnish the required
performance and payment bonds when a guaranteed maximum price is
established.
SECTION 2. Chapter 370, Transportation Code, is amended by
adding Subchapter L to read as follows:
SUBCHAPTER L. CONSTRUCTION MANAGER-GENERAL CONTRACTOR METHOD
Sec. 370.451. DEFINITION. In this subchapter,
"construction manager-general contractor method" means a delivery
method by which an authority contracts with an engineer for design
and construction phase services and contracts separately with a
construction manager to serve as the general contractor and to
provide consultation during the design and construction of a
transportation project.
Sec. 370.452. USE OF CONSTRUCTION MANAGER-GENERAL
CONTRACTOR METHOD. Notwithstanding any other law requiring a
particular procurement procedure, including Subchapter E of this
chapter, an authority may use the construction manager-general
contractor method to select a general contractor for a
transportation project as provided by this subchapter.
Sec. 370.453. CONSTRUCTION MANAGER. (a) For purposes of
this subchapter, a construction manager may be a sole
proprietorship, partnership, corporation, or other legal entity.
(b) A construction manager serves as the general contractor
for a transportation project and assumes the risk for the
construction of the project at the contracted price.
(c) A construction manager shall provide consultation to an
authority regarding construction of a transportation project
during and after the design of the project, including consultation
regarding preconstruction services such as scheduling, pricing,
phasing, technical innovations, site investigation, and risk
mitigation.
(d) The contracted price may be a guaranteed maximum price
or converted to a lump sum.
Sec. 370.454. USE OF ENGINEER. On or before the selection
of a construction manager, an authority shall select an engineer to
prepare the construction documents for the transportation project.
Sec. 370.455. ADOPTION OF CRITERIA AND RULES. (a) An
authority shall adopt weighted selection criteria and rules for the
selection process and award of contracts under this subchapter,
which may include interviews with top-ranked offerors.
(b) The rules adopted under Subsection (a) must address the
selection process applicable to the award of a contract for
preconstruction services and for construction management and
construction services, including the process for contract
negotiations with the construction manager for construction of the
project or work packages associated with the project in accordance
with contract documents.
Sec. 370.456. EVALUATION TEAM. (a) Before preparing a
request under Section 370.457 for a transportation project, an
authority shall appoint a team of at least three members to assist
the authority in evaluating proposals and qualifications received
by the authority. The members may be authority employees or outside
consultants.
(b) At least one-half, or as near one-half as possible, of
the team members must be engineers registered in this state. An
engineer who serves on the team and is not an authority employee may
not otherwise be involved in the project for which the request is
prepared under Section 370.457.
(c) The team must include at least one person who is a senior
management employee of a general contractor that:
(1) is registered as a prequalified general contractor
under department rules;
(2) is not involved in the project for which the
request is prepared under Section 370.457; and
(3) has no other conflict of interest as determined by
the authority.
Sec. 370.457. SELECTION PROCESS. (a) An authority may
select the construction manager in a one-step or two-step process.
(b) An authority shall prepare a single request for
proposals, in the case of a one-step process, and an initial request
for qualifications followed by a request for proposals and any
required interviews, in the case of a two-step process. A request
prepared under this subsection must include:
(1) a statement as to whether the selection process is
a one-step or two-step process;
(2) information regarding the project's location,
scope, and limits;
(3) publicly available cost estimates and a budget for
the project;
(4) information regarding funding that may be
available for the project;
(5) the selection criteria adopted under Section
370.455 and the relative weighted value for each criterion;
(6) the time and place for receipt of qualifications
or proposals, as applicable; and
(7) any other information that may assist the
authority in the selection of a construction manager.
(c) If a one-step process is used, an authority may request,
as part of the offeror's proposal, the offeror's:
(1) proposed billable rates for preconstruction
services personnel;
(2) proposed fee for home office overhead; and
(3) profit fee on the negotiated construction price
for performing construction services.
(d) If a two-step process is used, an authority may not
request proposed billable rates, fees, or prices in step one. In
step two, an authority may request that five or fewer offerors,
selected on the basis of qualifications, experience, technical
competence, and ability to develop the project, provide additional
information, including the offeror's:
(1) proposed billable rates for preconstruction
services and general conditions personnel;
(2) proposed fee for home office overhead; and
(3) profit fee on the negotiated construction price
for performing construction services.
(e) If a one-step process is used, proposed billable rates
for general conditions personnel must be negotiated on selection of
the construction manager.
Sec. 370.458. SELECTION OF CONSTRUCTION MANAGER. (a) An
authority shall:
(1) rank the offerors in accordance with the selection
criteria provided in the request for proposals under Section
370.457(b)(5); and
(2) select the offeror that submits the proposal with
the highest ranking.
(b) The award of a preconstruction services contract under
Subsection (a) authorizes the construction manager to:
(1) provide consultation to the authority and project
engineer; and
(2) enter into open and transparent negotiations with
the authority during the design phase of the project to refine the
project's cost and schedule for the construction management and
construction services contract.
(c) An authority shall use the services of an independent
cost estimator for each work package associated with the project to
validate the negotiated costs for the construction management and
construction services contract. The independent cost estimator
shall follow procedures outlined in the Federal Highway
Administration Major Project Program Cost Estimating Guidance, as
it existed on September 1, 2025, and as adapted by the department.
(d) On successful negotiations under Subsection (b)(2), the
authority shall execute a construction management and construction
services contract with the construction manager for either
construction of the project or selected work packages associated
with the project.
(e) Negotiations under Subsection (b)(2) shall be
terminated if the authority is unable to reach a price agreement
with the construction manager. If negotiations are terminated, the
authority may competitively bid the construction of the project in
accordance with the authority's procedures under Subchapter E.
(f) Not later than the seventh day after the date a
preconstruction services contract is awarded under this section,
the authority shall make public the selection rankings determined
under Subsection (a).
Sec. 370.459. PERFORMANCE OR PAYMENT BOND. The
construction manager shall deliver any performance and payment
bonds not later than the 10th day after the date the construction
manager is awarded a preconstruction services contract under
Section 370.458 unless the construction manager furnishes a bid
bond or other financial security acceptable to the authority to
ensure that the construction manager will furnish the required
performance and payment bonds when a guaranteed maximum price is
established.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.