By Cara Woodson Welch, Esq.
Vice President, Advocacy & General Counsel, DBIA
The Design-Build Institute of America (DBIA) was a sponsor for the Clean Water America Gala in Washington, D.C., on Sept. 18 to encourage increased federal funding for water infrastructure and celebrate the Clean Water Act’s 35th anniversary.
Enacted in 1972, the act was designed to “restore and maintain the chemical, physical, and biological integrity of the nation’s waters.”
DBIA supports a federal clean water infrastructure trust fund that would provide a reliable source of financial assistance for the construction and repair of water and wastewater infrastructure. The fund would provide a viable long-term, dedicated source of revenue to bridge the clean water infrastructure funding gap. The Environmental Protection Agency estimates a $300-500 billion funding shortfall over the next 20 years for water infrastructure funding. Design-build is increasingly used for water/wastewater projects.
With clean and safe water a key national infrastructure priority, DBIA joined Sen. Barbara Boxer, D-Calif., chair of the Senate Environment & Public Works Committee, and representatives from key national organizations at the rally Sept. 18 to support increased federal funding for clean water infrastructure and to urge the Senate to introduce and pass legislation similar to the Water Quality Financing Act of 2007 (H.R. 720). The bill, which passed the House last spring in a 303-108 vote, would reauthorize the Clean Water State Revolving Fund at $14 billion over four years and call on the Government Accountability Office to study long-term, viable revenue sources for a clean water trust fund.
At a hearing before the Senate Environment & Public Works Subcommittee on Transportation Safety, Infrastructure Security, and Water Quality on Sept. 19, Christopher M. Westhoff, president of the National Association of Clean Water Agencies and an assistant city attorney and public works general counsel for the City of Los Angeles, said that federal assistance has dropped more than 70 percent in the past 27 years.
“Local communities now pay more than 95 percent of the cost of meeting their Clean Water Act obligations,” he said. “In effect, these communities are on their own to address the ever-increasing challenges of aging infrastructure.”
The Senate is expected to move forward with its own clean water financing bill in the next few months.
Appropriation Bills Unfinished
Although the fiscal year ended Sept. 30, Congress has yet to pass fiscal year 2008 appropriations legislation, which can cause funding difficulties for particular agencies.
DBIA continues working with Congress to get language encouraging the use of design-build into Veterans Affairs and Military Construction, Department of Agriculture and Housing and Urban Development appropriations bills.
Several years back, the federal government was forced to close its doors because the appropriations bills were not completed.
In an effort to keep the government open this year, Congress introduced legislation during the last week of September to keep the government running until Nov. 16, giving itself time to complete work on the remaining appropriations bills - including the three bills previously mentioned that DBIA continues monitoring.
State Legislative Update
New design-build laws:
Illinois HB 3490 - Gov. Rod R. Blagojevich signed this into law on Sept. 10, which amends the state’s Public Building Commission Act. The new law authorizes a commission to solicit and award design-build construction contracts and extends authority to municipal governments. Introduced Feb. 28, HB 3490 takes effect June 1, 2008.
Key language in the law:
It is the intent of the General Assembly that a commission be allowed to use the design-build delivery method for public projects if it is shown to be in the commission’s best interest for that particular project.
It shall be the policy of the commission in the procurement of design-build services to publicly announce all requirements for design-build services and to procure these services on the basis of demonstrated competence and qualifications and with due regard for the principles of competitive selection.
The commission shall, prior to issuing requests for proposals, promulgate and publish procedures for the solicitation and award of contracts pursuant to this Act.
The commission shall, for each public project or projects permitted under this Act, make a written determination, including a description as to the particular advantages of the design-build procurement method, that it is in the best interests of the commission to enter into a design-build contract for the project or projects.
In making that determination, the following factors shall be considered
(1) The probability that the design-build procurement method will be in the best interests of the commission by providing a material savings of time or cost over the design-bid-build or other delivery system.
(2) The type and size of the project and its suitability to the design-build procurement method.
(3) The ability of the design-build entity to define and provide comprehensive scope and performance criteria for the project.
The commission shall require the design-build entity to comply with the utilization goals established by the corporate authorities of the commission for minority and women business enterprises and to comply with Section 2-105 of the Illinois Human Rights Act.
This Section is repealed 5 years after the effective date of this amendatory Act of the 95th General Assembly.
Missouri H.B. 2A - Gov. Matt Blunt signed this bill into law Sept. 4, which allows the Highways and Transportation Commission to modify bonding requirements for projects designated as design-build finance maintain projects which exceed 25 years. The bill was introduced Aug. 20.
Key provisions of the law:
(1) Require a bid or proposal bond in an amount of at least $5 million;
(2) Require a performance bond or bonds for the construction period specified in the design-build highway project contract in an aggregate amount of at least $200 million or 25% of a reasonable estimate of the cost of the construction work, whichever is lower, except that the commission may allow other security in lieu of or in addition to any bond or bonds including, but not limited to, letters of credit or other negotiable instruments considered to be adequate and satisfactory to the commission; and
(3) Require a payment bond or bonds for the protection of persons supplying labor and material in carrying out the construction work specified in the contract in an amount equal to a reasonable estimated total contract price under the terms of the project contract unless the commission makes a final determination by written findings of fact that the amount is impractical, in which case the commission will establish the amount of the payment bond or bonds, but in no case will the amount of the payment bond or bonds be less than the amount of the performance bond or bonds.
Legislative Sessions - Most 2007 state legislative sessions have ended. At the end of September, 11 states remained in session: California, Illinois, Massachusetts, Michigan, New Jersey, New York, Ohio, Oregon, Pennsylvania, and Wisconsin.
INFO: DBIA (www.DBIA.org)