Colorado has joined other states in allowing design-build delivery methods in public projects. On June 1, 2007, Governor Ritter signed House Bill 1342 enabling the State of Colorado, its counties, municipalities, special districts, and related entities to use delivery methods for public projects which integrate the project’s design, construction, operation, maintenance, financing, and other attributes into a single contract. The law became effective in early August 2007.
State Agencies
The first section of the bill contains amendments to Article 93 of Title 24 of the Colorado Revised Statutes dealing with construction projects by the State of Colorado. Referred to as the “Integrated Delivery Methods for Public Projects Act,” the bill contains legislative findings that the state wishes to encourage competition in public contracting procedures, not only in the costs of goods and services, but also in the technical competence of the providers and suppliers. It further states: “Timely and effective completion of public projects may be achieved through a variety of methods when procuring goods and services for public projects.” C.R.S. § 24-93-102(c).
The act provides that any state agency may enter into an integrated project delivery contract for a public project upon the agency’s determination that such integrated project delivery “represents a timely or cost-effective alternative for a public project.” C.R.S. § 24-93-104(1). An “agency” is defined broadly as “any agency department, division, board, bureau, commission, institution, or other agency of the executive, legislative, or judicial branch of the state government that is a budgetary unit exercising construction contracting authority or discretion.” C.R.S. § 24-93-103(1). “Integrated project delivery” (IPD) is defined as an agreement between an agency and a single entity for “the design, construction, alteration, operation, repair, improvement, demolition, maintenance, or financing, or any combination of these services, for a public project.” C.R.S. §24-93-103(4). Thus, in addition to combining design and construction services, an IPD contract may also include a single entity providing for the project’s financing and subsequent operation and maintenance.
State agencies may pre-qualify entities for participation in an IPD contract by publishing a request for qualifications. C.R.S. § 24-93-105. The act contains a listing of information, which may be contained in the RFQ Id. The agency must then create a “short list” of entities which the agency believes are the most qualified. C.R.S. 24-93-105(2).
Whether or not entities are pre-qualified, a state agency must publish a request for proposals (RFP) and the statute contains a list of minimum criteria which must be used to evaluate the proposals. C.R.S. 24-93-106. Such factors include price, design and technical approach to the project, past performance and experience, project management capabilities including financial, equipment and personnel resources and craft labor capabilities. C.R.S. § 24-93-106(1). Additional information may be contained in the RFP, such as procedures for submitting proposals and their evaluation, performance standards, budget, scheduling, and other information about the project. C.R.S. § 24-93-106(3). The agency may then select the proposal that is “most advantageous and represents the best overall value to the state.” C.R.S. § 24-93-106(2).
The act further provides that the entity itself that submits a proposal for an IPD contract need not be licensed to provide professional services, so long as the person or entity actually providing those services as part of the contracting entity is licensed properly. C.R.S. § 24-93-106(6).
Agencies are then empowered, if they follow the parameters of the act, to enter into “any type of contract” that will promote the best interests of the agency, except a cost plus a percentage of cost contract. C.R.S. § 24-93-108.
Counties
Section 2 of House Bill 1342 is called the “Integrated Delivery Method for County Public Improvements Act” and addresses design-build and similar contracts in county projects. This section of the bill contains similar legislative findings as Section 1 dealing with state agencies and also similar definitions for contract, integrated project delivery, IPD contracts, and participating entities.
“Agency” is defined, again in broad terms, as any county, city and county, home rule county, county pubic improvement district, or “any other district that a county or a city and county may create pursuant to the authority provided in Article 20 of this Title that is a budgetary unit exercising construction contracting authority or discretion, and any special taxing district formed by a home rule county in accordance with the provisions of Part 9 Article 35 of this title.” C.R.S. 30-20-1103(1). The definition of “public project” differs from that used in the Section 1 of the act addressing state agencies, but is very broad. This section of the act also defines “Public Purposes” as including, but not being limited to “…the supplying of public water services and facilities, public sewerage services and facilities, and lands, buildings, improvements, equipment, and facilities for public education, to the extent the boundaries of the agency and school district are coterminous.” C.R.S. 30-20-1103(8).
County agencies also may pre-qualify entities that wish to participate in a project and are required to publish a request for proposals for the project. Unlike projects procured by state agencies, however, there is no mandatory listing of criteria to be used in evaluating proposals, but only a list of suggested items. C.R.S. § 30-20-1106. The basis of selection is that proposal which the county agency believes will provide the “best value” to the county. C.R.S. § 30-20-1106(2). The same professional licensing provisions apply to county projects as does the prohibition on entering into cost plus contracts. C.R.S. §§ 30-20-1106(4), 1108.
Municipalities
Section 3 of the act is titled the “Integrated Delivery Method for Municipal Public Improvements Act” and contains provisions authorizing cities and towns to enter into design-build and similar contracts. This portion of the act is very similar to Section 2 dealing with counties. “Agency” is defined as “any home rule or statutory city, town, territorial charter city, city and county, or any other political subdivision that a municipality may create pursuant to state law that is a budgetary unit exercising construction contracting authority or discretion.” C.R.S. § 31-25-1303(1). The remaining definitions are the same as those which pertain to county contracts, as are the provisions related to pre-qualification, selection, licensing and types of contracts which are allowed and prohibited.
Special Districts
The final section of the act is entitled “Integrated Delivery Method for Special District Public Improvements Act” and contains provisions codified in Title 32 of the Colorado Revised Statutes. This section defines contracting agency as “any special district organized under this title or any other political subdivision that such district may create pursuant to state law that is a budgetary unit exercising construction contracting authority or discretion.” C.R.S. 32-1-1803(1). It again has provisions similar to those relating to counties and municipalities and states that special districts also may employ design-build and other integrated project delivery methods and contracts, other than cost plus agreements.
Conclusion
With this recent legislation, Colorado has joined those states across the country which have extended the benefits of the design-build delivery method to public projects. Many branches of state and local government, which were required to follow the traditional design-bid-build and low-bid procurement may now employ alternative and creative solutions to procuring needed improvements and serving their constituents in the most timely and cost efficient manner.
INFO: Icenogle, Norton, Smith & Blieszner, P.C. (www.insbcolorado.com)