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B-1 APPENDIX B List of State Laws Allowing Use of Best-Value by Departments of Transportation; Excerpts from the Model Procurement Code, FAR, and State Statutes This appendix provides a summary of various state statutes that may allow Departments of Transportation to implement best- value procurement for construction contracts. This list is followed by excerpts from ABA's Model Procurement Code and vari- ous statutes that may be of interest in developing legislation for DOT projects.
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B-2 DOTs WITH BEST-VALUE PROCUREMENT AUTHORITY (EXCLUDING DESIGN-BUILD) Note: The following chart identifies State Departments of Transportation that appear to have authority to use best-value procurements for construction contracts, based on a cursory review of state laws posted on the internet as of the date of the review. An in-depth legal analysis would be necessary in order to determine whether states should be added or deleted from this list. It should be noted that a number of states not listed below have adopted procurement codes based on the ABA Model Code. Such codes either specifically excluded the Department of Transportation or did not clearly include the Department of Transportation. States that have best-value authority only for design-build or construction management contracts are not listed. State Citation Procurement Process AK ALASKA STAT. §§ 36.30.170 et Commissioner of Transportation may allow innovative competitive procurement process based on a seq. determination that it is advantageous to the state to achieve best value. (36.30.308) Competitive sealed proposal process may be used if it is impractical to initially prepare a definitive purchase description to support an award based on price; in such case award would be made to proposer submitting "most advantageous" offer. Otherwise, competitive sealed bids. Commissioner has discretion to determine process for contracts under $100,000. Preference for local bidders. DE DEL. CODE ANN. tit. 29, Tit. 29 § 6962(d)(13): Award "to the lowest responsive and responsible bidder, unless the agency elects to § 6962(d)(13); tit. 2, § 2003 award on the basis of best value, in which case the election to award on the basis of best value shall be stated in the invitation to bid." Prequalification is allowed. Additionally, award may be made to other than the low bidder if "the interest of the agency shall be better served by awarding the contract to another bidder." Tit. 2, § 2003: Applicable to transportation projects using private sources of financing. Proposals to be evaluated and ranked based on selection criteria stipulated in the request for proposals; contract negotiated with the highest ranked proposer. HI HAW. REV. STAT. § 103D-301 et Competitive sealed proposals allowed for construction for which competitive sealed bidding is not seq. practicable or not advantageous to the State (determination to be designated by rule or made by agency head in writing). Award to responsible offeror whose proposal is determined in writing to be the most advantageous taking into consideration price and the evaluation factors stated in the request for proposals. Otherwise contracts are to be awarded by competitive sealed bidding. Single step or multi-step bidding is allowed. Criteria to be considered must be stated in the invitation for bids and must be objectively measurable, such as discounts, transportation costs, and total or life-cycle costs.
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State Citation Procurement Process MD MD. CODE ANN., STATE FIN. & 13-102 requires competitive sealed bidding for construction projects. Process may include multi-step PROC. §§ 13-102 et seq. bidding. (13-104 and 13-105 limit competitive sealed proposal process to human, social, cultural or educational services, and leases.) Standard Specifications provide for award to be made to the responsible and responsive bidder whose bid meets the requirements and evaluation criteria set forth in the invitation for bids, and is either the lowest bid price or the lowest evaluated bid price. MN MINN. STAT. ANN. §§ 161.32, 161.32 sub. 1b: Trunk highway construction contracts to be awarded to the lowest responsible bidder, 161.3410 taking into consideration conformity with the specifications, the purpose for which the contract or purchase is intended, the status and capability of the vendor, and other considerations imposed in the call for bids. The commissioner may decide which is the lowest responsible bidder for all contracts and may use the principles of life-cycle costing, when appropriate, in determining the lowest overall bid. 161.3412 allows best value selection for design-build contracts notwithstanding the foregoing. May use either a two-step best value selection process or a low bid process, not to exceed 10% of DOT contracts each year. MT MONT. CODE ANN. § 60-2-111, 60-2-111: In general, competitive bidding required for contracts over $50,000, award to lowest responsible 112, 135-137. and responsive bidder. 600-2-112: Award by means other than competitive bidding is allowed if special circumstances so require and are specified in writing. 60-2-135 et seq. establishes pilot program for design-build projects. NH N.H. REV. STAT. ANN. § 228:4(I) Competitive bidding required only for federally funded highway contracts. Design-build may be used for certain types of projects not to exceed $1 million, selection to be based on objective standard, measurable criteria for evaluation. NC N.C. GEN. STAT. §§ 136-28.1; 136-28.1: Contracts over $1,200,000 to be let to a responsible bidder after public advertising under 136-28.11 rules and regulations to be made and published by the Department of Transportation. Contracts under $1,200,000 to be awarded to the lowest responsible bidder (advertising not required). For contracts for repair of ferryboats, the Secretary may waive public advertising as well as soliciting of informal bids if he/she determines that the requirement for compatibility does not make public advertising feasible. 136-28.11: Allows use of design-build based on determination by the Department of Transportation that delivery of the projects must be expedited and that it is not in the public interest to comply with normal design and construction contracting procedures. Contracts to be "awarded on a basis to maximize participation, competition, and cost benefit." OR OR. REV. STAT. § The Director of the Department or a local contract review board may direct the use of alternative 383.279A.050(3)(b) contracting methods relating to the operation, maintenance or construction of highways, bridges, etc. OR. REV. STAT. § The Department may award any (tollway) contract under a competitive process or by private negotiation or 383.279C.335(3)(a) any combination of competition and negotiation. OR. REV. STAT. §§ 383.005 et seq. B-3
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B-4 State Citation Procurement Process RI R.I. GEN. LAWS § 24-8-12 (DOT 24-8-12 Contracts Advertising for bids. All road construction or improvements made by the director of Contracts); ch. 37-2 (state transportation shall be, and all repairs may be, performed by written contract, made by the department of Purchases) administration in behalf of the state, and after advertisement, . . . inviting sealed proposals for the road construction or improvement, to be made under the supervision and subject to the approval of the department of administration, and in accordance with the plans and specifications of the department of transportation; and the advertisement shall state the time and place the plans and specifications may be examined, and when the proposals made in answer to the advertisement will be opened, and shall reserve the right of the department of administration to reject any and all proposals. Unclear whether ch. 37-2 applies to DOT contracts. § 37-2-18 allows competitive sealed bidding with award made on the basis of the lowest bid price or the lowest evaluated or responsive bid price (including objective measurable criteria identified in the invitation for bids). § 37-2-19 allows competitive negotiation based on regulations and determination that competitive sealed bidding is not practicable. VA VA. CODE ANN. §§ 2.2-4303, 2.2- 2.2-4303(D): construction contracts to be procured by competitive sealed bidding except that competitive 4306 and 33.1-12 negotiation may be used for highways upon a determination that bidding is either not practicable or not fiscally advantageous. 2.2-4301: Competitive sealed bidding definition states that award is to be made to the lowest responsive and responsible bidder, but also makes clear that requirements set forth in the invitation will be evaluated in determining acceptability, including special qualifications of potential contractors, life-cycle costing, value analysis, and any other criteria such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose, which are helpful in determining acceptability. 2.2-4306: procedures for award of design-build and construction management contracts. Award to be based on objective criteria adopted by Commonwealth Transportation Board; objective criteria to include requirements for prequalification and competitive bidding.
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B-5 EXCERPTS FROM THE MODEL PROCUREMENT CODE, FAR, AND STATE STATUTES Model Procurement Code Part B -- Methods of Source Selection § Method of Source Selection. Unless otherwise authorized by law, all [State] contracts shall be awarded by one of the following methods: (a) Section 3-202 (Competitive Sealed Bidding); (b) Section 3-203 (Competitive Sealed Proposals); (c) Section 3-204 (Small Purchases); (d) Section 3-205 (Sole Source Procurement); (e) Section 3-206 (Emergency Procurement); (f) Section 3-207 (Special Procurement); (g) Section 3-205 (Architectural and Engineering Services); COMMENTARY: (1) With competitive sealed bidding as a starting point (Section 3-202), procurement officials are able to choose an appropriate source selection method to meet the circumstances of each procurement. Procurement officials should be able to freely select method, based on that official's discretion. Procurement officials should recognize the flexibility that the Code offers them when using the competitive sealed bidding method, such as product acceptability and multi-step process. (2) The purpose of this Part is to provide procurement officials with adequate authority to conduct procurement transactions by fair and open competition under varying market conditions in order to satisfy public needs for supplies, services, and construction at the most economical prices. (3) Fair and open competition is a basic tenet of public procurement. Such competition reduces the opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically. Since the marketplace is different for various supplies, services, and construction, this Code authorizes a variety of source selection techniques designed to provide the best competition for all types of procurement. It also permits less formal competitive procedures where the amount of the contact does not warrant the expense and time otherwise involved. Competitive sealed bidding (Section 3-202), competitive sealed proposals (Section 3-203), therefore, are recognized as valid competitive procurement methods when used in accordance with the criteria and conditions set forth in this Article. (4) Subsection (d) lists sole source procurements (Section 3-205) as an exception to other methods only when it is determined in writing that there is only one source for the required supply service, or construction item. (5) The statutory authorization in Section 3-201 to use competitive sealed bidding and competitive sealed proposals applies to four new project delivery methods identified in Article 5 of the 2000 Code: design-build, design-build-operate-maintain, when added to
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B-6 the design-bid-build project delivery already authorized in the 1979 version of the Code, provide procurement officials with increased flexibility in the procurement of the design, construction, operation, maintenance, and finance of public infrastructure facilities. Article 5 continues to rely on the source selection methods of Article 3, while providing maximum flexibility to procurement officials to separate or integrate the design, construction, operation, maintenance, and finance functions. § 3-202 Competitive Sealed Bidding. (1) Conditions for Use. Contracts shall be awarded by competitive sealed bidding except as otherwise provided in Section 3-201 (Method of Source Selection). COMMENTARY: Competitive sealed bidding does not include negotiations with bidders after the receipt and opening of bids. Award is to be made based strictly on the criteria set forth in Invitation for Bids. (2) Invitation for Bids . An Invitation for Bids shall be issued and shall include a purchase description, and all contractual terms and conditions applicable to the procurement. (3) Public Notice. Adequate public notice of the Invitation for Bids shall be given a reasonable time prior to the date set forth therein for the opening of bids, in accordance with regulations. COMMENTARY: Public notice required by this Subsection should be given sufficiently in advance of bid opening to permit potential bidders to prepare and submit their bids in a timely manner. Because the adequacy of notice will, as a practical matter, vary from locality to locality and procurement to procurement, no attempt is made in Subsection (3) to define statutorily either a prescribed method of notice or the duration of its publication. However, the regulations should provide criteria and general guidelines for the method and duration of public notice. (4) Bid Opening. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the Invitation for Bids. The amount of each bid, and such other relevant information as may be specified by regulation, together with the name of each bidder shall be recorded; the record and each bid shall be open to public inspection. (5) Bid Acceptance and Bid Evaluation. Bids shall be unconditionally accepted without alteration or correction, except as authorized in this Code. Bids shall be evaluated based on the requirements set forth in the Invitation for Bids, which may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability purpose. Those criteria that will affect the bid price and be considered in evaluation for award shall be objectively measurable, such as discounts, transportation costs, and total or life cycle costs. The
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B-7 Invitation for Bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that are not set forth in the Invitation for Bids. COMMENTARY: (1) The only provisions of this Code that allow alteration or correction of bids are found in Subsection (6) of this Section and Section 5-301(3) (Bid Security, Rejection of Bids for Noncompliance with Bid Security Requirements). (2) This Subsection makes clear that judgment evaluations of products, particularly where bid samples or product description are submitted, may properly be used in determining whether a product proffered by a bidder meets the acceptability standards of the specific requirements for the procurement. Such judgmental evaluations as appearance, workmanship, finish, taste, and feel all may be taken into consideration under this Subsection. Additionally, the ability to make such determinations and to reject as nonresponsive any bid that does not meet the purchase description is inherent in the definition of responsive bidder in Section 3-107(7) (Definitions, Responsive Bidder). (3) The bid evaluation may take into account not only acquisition costs of supplies, but the cost of their ownership which relates to the quality of the product, including life cycle factors such as maintainability and reliability. Any such criteria must be set forth in the Invitation for Bids to enable bidders to calculate how such criteria will affect their bid price. (4) This Subsection does not permit a contract to be awarded to a bidder submitting a higher quality item than the minimum required by the purchase description unless that bidder also has the bid price evaluated lowest in accordance with the objective criteria set forth in the Invitation for Bids. Furthermore, this procedure does not permit discussions or negotiations with bidders after receipt and opening of bids. (6) Correction of Withdrawal of Bids; Cancellation of Awards. Correction or withdrawal of inadvertently erroneous bids before or after award, or cancellation of awards or contracts based on such bid mistakes, shall be permitted in accordance with regulations. After bid opening, no changes in bid prices or other provisions of bids prejudicial to the interest of the [State] or fair competition shall be permitted. Except as provided by other regulation, all decisions to permit the correction or withdrawal of bids, or to cancel awards or contracts based on bid mistakes, shall be supported by a written determination made by the Chief Procurement Office or head of a Purchasing Agency. COMMENTARY: (1) Correction or withdrawal of bids before or after contract award requires careful consideration to maintain the integrity of the competitive bidding system, to assure fairness, and to avoid delays or poor contract performance. While bidders should be expected to be bound by their bids, circumstances frequently arise where correction or withdrawal of bids is proper and should be permitted. (2) To maintain the integrity of the competitive sealed bidding system, a bidder should not be permitted to correct a bid mistake after bid opening that would cause such a bidder
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B-8 to have the low bid unless the mistake is clearly evident from examining the bid document; for example, extension of unit prices or errors in addition. (3) An otherwise low bidder should be permitted to correct a material mistake of fact in its bid, including price, when the intended bid is obvious from the bid document or is otherwise supported by proof that has evidentiary value. A low bidder should not be permitted to correct a bid for mistakes or errors in judgment. (4) In lieu of bid correction, the [State] should permit a low bidder alleging a material mistake of fact to withdraw its bid when there is reasonable proof that a mistake was made and the intended bid cannot be ascertained with reasonable certainty. (5) After bid opening an otherwise low bidder should not be permitted to delete exceptions to the bid conditions or specifications which affect price or substantive obligations; however, such bidder should be permitted the opportunity to furnish other information called for by the Invitation for Bids and not supplied due to oversight, so long as it does not affect responsiveness. (6) A suspected bid mistake can give rise to a duty on the part of the [State] to request confirmation of a bid, and failure to do so can result in a nonbinding award, where there is an appearance of mistake. Therefore, the bidder should be asked to reconfirm the bid before award. In such instances, a bidder should be permitted to correct the bid or to withdraw it when the bidder acknowledges that a mistake was made. (7) Correction of bid mistakes after award should be subject to the same proof as corrections before award with a further requirement that no correction be permitted that would cause the contract price to exceed the next low bid. (8) Nothing in this Section is intended to prohibit the [State] from accepting a voluntary reduction in price from a low bidder after bid opening; provided that such reduction is not conditioned on, or results in, the modification or deletion of any conditions contained in the Invitation for Bids. (7) Award. The contract shall be awarded with reasonable promptness by written notice to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the Invitation for Bids. In the event all bids for a construction project exceed available funds as certified by the appropriate fiscal officer, and the low responsive and responsible bid does not exceed such funds by more than [five] percent, the Chief Procurement Officer, or the head of Purchasing Agency, is authorized in situations where time or economic considerations preclude resolicitation of work of a reduced scope to negotiate an adjustment of the bid price, including changes in the bid requirements, with the low responsive and responsible bidder, in order to bring the bid within the amount of available funds. COMMENTARY: (1) The successful bidder must be responsive as defined in Section 3-101(7) and responsible as defined in Section 3-101(6), and the bid must be the lowest bid determined under criteria set forth in the Invitation for Bids. (2) This Subsection also provides authority to negotiate changes in construction project bid requirements with a low bidder in order to arrive at a price not in excess of available funds. It should be noted that even where the bids exceed the percentage limitation on
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B-9 the discretionary authority to negotiate with the low bidder, if circumstances warrant an emergency determination, the procurement can proceed under Section 3-206 (Emergency Procurements). (3) When all bids are determined to be unreasonable or the lowest bid on a construction project exceeds the amount specified in the Subsection, and the public need does not permit the time required to resolicit bids, then a contract may be awarded pursuant to the emergency authority in Section 3-206 (Emergency Procurements) in accordance with regulations. (4) Note that the new definition of "written or in writing" in Section 1-301(26) permits awards to be issued electronically. (8) Multi-Step Sealed Bidding. When it is considered impractical to initially prepare a purchase description to support an award based on price, an Invitation for Bids may be issued requesting the submission of unpriced offers to be followed by an Invitation for Bids limited to those bidders whose offers have been qualified under the criteria set forth in the first solicitation. COMMENTARY: To provide additional flexibility in meeting the designated public need, multi-step competitive sealed bidding is authorized. §3-203 Competitive Sealed Proposals. (1) Conditions for Use. (a) A contract may be entered into by competitive sealed proposals when the Chief Procurement Officer, the head of a Purchasing Agency, or a designee of either officer above the level of the Procurement Officer determines in writing, pursuant to regulations, that the use of competitive sealed bidding is either not practicable or not advantageous to the [State]. (b) Regulations may provide that it is either not practicable or not advantageous to the [State] to procure specified types of supplies, services, or construction by competitive sealed bidding. (c) Contracts for the design-build, design-build-operate-maintain, or design-build-finance-operate-maintain project delivery methods specified in Article 5 shall be entered into by competitive sealed proposals, except as otherwise provided in Subsections (c), (d), (e), and (f) of Section 3-201 (Methods of Source Selection). COMMENTARY: (1) The competitive sealed proposal method (similar to competitive negotiation) is available for use when competitive sealed bidding is either not practicable or not advantageous. The competitive sealed proposal method is mandated for the project delivery methods described in Article 5: design-build, design-build-operate-maintain, and design-build-finance-operate-maintain.
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B-10 (2) The competitive sealed bidding and competitive sealed proposal methods assure price and product competition. The use of functional or performance specifications is allowed under both methods to facilitate total or life cycle costs. The criteria to be used in the evaluation process under either method must be fully disclosed in the solicitation. Only criteria disclosed in the solicitation may be used to evaluate the items bid or proposed. (3) These two methods of source selection differ in the following ways: (a) Under competitive sealed bidding, judgmental factors may be used only to determine if the supply, service, or construction item bid meets the purchase description. Under competitive sealed proposals, judgmental factors may be used to determine not only if the items being offered meet the purchase description but may also be used to evaluate the relative merits of competing proposals. The effect of this different use of judgmental evaluation factors is that under competitive sealed bidding, once the judgmental evaluation is completed, award is made on a purely objective basis to the lowest responsible bidder. Under competitive sealed proposals, the quality of competing products or services may be compared and tradeoffs made between price and quality of the products or services offered (all as set forth in the solicitation). Award under competitive sealed proposals is then made to the responsible offeror whose proposal is most advantageous to the [State]. (b) Competitive sealed bidding and competitive sealed proposals also differ in that, under competitive sealed bidding, no change in bids is allowed once they have been opened, except for correction of errors in limited circumstances. The competitive sealed proposal method, on the other hand, permits discussions after proposals have been opened to allow clarification and changes in proposals provided that adequate precautions are taken to treat each offeror fairly and to ensure that information gleaned from competing proposals is not disclosed to other offerors. (4) The words "practicable" and advantageous" are to be given ordinary dictionary meanings. In general, "practicable" denotes a situation which justifies a determination that a given factual result can occur. A typical determination would be whether there is sufficient time or information to prepare a specification suitable for competitive sealed bidding. "Advantageous" connotes a judgmental assessment of what is in the [State's] best interest. Illustrations include determining: (a) whether to utilize a fixed-price or cost-type contract under the circumstances; (b) whether quality, availability, or capability is overriding in relation to price in procurements for research and development, technical supplies, or services (for example, developing a traffic management system); (c) whether the initial installation needs to be evaluated together with subsequent maintenance and service capabilities and what priority should be given these requirements in the best interests of the [State]: or (d) whether the marketplace will respond better to a solicitation permitting not only a range of alternative proposals but evaluation and discussion of them before making the award (for example, computer software programs).
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B-11 What is practicable (that is possible) may not necessarily be beneficial to the [State]. Consequently, both terms are used in the Section to avoid a possibly restrictive interpretation of the authority to use competitive sealed proposals. If local conditions require an enacting jurisdiction to reduce the proposed flexibility in choosing between competitive sealed bidding and competitive sealed proposals, the statutory determination under Subsection (1)(b) to use competitive sealed proposals should be confined to a determination that use of competitive sealed bidding is "not practicable." (5) Whenever it is determined that it is practicable but not advantageous to use competitive sealed bidding, the basis for the determination should be specified with particularity. (2) Request for Proposals. Proposals shall be solicited through a Request for Proposals. (3) Public Notice. Adequate public notice of the Request for Proposals shall be given in the same manner as provided in Section 3-202(3) (Competitive Sealed Bidding, Public Notice). (4) Receipt of Proposals. Proposals shall be opened so as to avoid disclosure of contents to competing offerors during the process of negotiation. A Register of Proposals shall be prepared in accordance with regulations, and shall be open for public inspection after contract award. (5) Evaluation Factors. The Request for Proposals shall state the relative importance of price and other factors and subfactors, if any. COMMENTARY: Subsection (5) requires that the Request for Proposals ("RFP") set forth the relative importance of the factors and any subfactors, in addition to price, that will be considered in awarding the contract. A statement in the RFP of the specific weighting to be used by the jurisdiction for each factor and subfactor, while not required, is recommended so that all offerors will have sufficient guidance to prepare their proposals. The Subsection serves two purposes. First, a fair competition necessitates an understanding on the part of all competitors of the basis upon which award will be made. Second, a statement of the basis for award is also essential to ensure that the proposals will be as responsive as possible so that the jurisdiction can obtain the optimum benefits of the competitive solicitation. The requirement for disclosure of the relative importance of all evaluation factors and subfactors applies to the areas or items that will be separately evaluated and scores, e.g., the items listed on evaluation score sheets. The requirement does not extend to advance disclosure of the separate items or emphasis that are considered in the mental process of the evaluators in formulating their scores for the factors and subfactors that are described in the solicitation. (6) Discussion with Responsible Offerors and Revisions to Proposals. As provided in the Request for Proposals, and under regulations, discussions may be conducted with responsible offerors who submit proposals determined to be reasonably susceptible of being selected for award for the purpose of clarification to ensure full understanding of, and responsiveness to, the solicitation requirements. Offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals, and such revisions may be permitted after submissions and prior to award for the purpose of obtaining best and
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B-20 (II) Criteria for objectively determining whether the prices for enhancements, options, or alternatives provide the best-value at the lowest cost to the state. (4) The contract shall be awarded with reasonable promptness by written notice to the low responsible bidder whose bid meets the requirements and criteria set forth in the invitation for bids except as otherwise provided for certain low tie bids under section 24- 103-202.5. TITLE 43 TRANSPORTATION ARTICLE 1. General and Administrative PART 14 DESIGN-BUILD CONTRACTS 43-1-1402. Definitions. As used in this part 14: (1) "Adjusted score design-build contract process" means a process to award contracts based on the lowest adjusted score of proposals submitted to the department. (2) "Best-Value" means the overall maximum value of a proposal to the department after considering all of the evaluation factors described in the specifications for the transportation project or the request for proposals, including but not limited to the time needed for performance of the contract, innovative design approaches, the scope and quality of the work, work management, aesthetics, project control, and the total cost of the transportation project. (3) "Design-build contract" means the procurement of both the design and the construction of a transportation project in a single contract with a single design-build firm or a combination of such firms that are capable of providing the necessary design and construction services. (4) "Design-build firm" means any company, firm, partnership, corporation, association, joint venture, or other entity permitted by law to practice engineering, architecture, or construction contracting in the state of Colorado. ... (5) "Transportation project" means any project that the department is authorized by law to undertake including but not limited to a highway, tollway, bridge, mass transit, intelligent transportation system, traffic management, traveler information services, or any other project for transportation purposes. ... 43-1-1406. General procedures. (1) The department shall describe in the specifications for the transportation project the particular design-build contract and selection procedures to be used in awarding such contract, including but are not limited to the following: (a) A scope of work statement that defines the transportation project and provides prospective design-build firms with sufficient information regarding the department's requirements for the transportation project; (b) If the department uses an adjusted score design-build contract process to select a design-build firm, a scope of work statement is needed that is flexible and that
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B-21 identifies the end result that the department wants to achieve. The department may determine the adjustment factors and methods it will use to adjust scores and shall state such factors and methods in the specifications for the transportation project. The department may also provide a general concept of the transportation project to potential design-build firms. Adjusted score design-build procedures shall consist of the following two phases: (I) In the first phase, the department shall issue a request for qualifications within the time specified in section 43-1-1405 to solicit proposals that include information on the design-build firm's qualifications and its technical approach to the proposed transportation project. The department shall include appropriate evaluation factors in the request for qualifications, including the factors set forth in section 24-30- 1403 (2), C.R.S. The department shall not include cost-related or price-related factors in the request for qualifications. In accordance with the time requirements specified in the department's rules, the department shall develop a short list of the highest qualified design-build firms from the proposals submitted in response to the request for qualifications. (II) In the second phase, the department shall issue a request for proposals to the design-build firms included on the short list developed pursuant to subparagraph (I) of this paragraph (b) in accordance with the time requirements specified in the department's rules. The request for proposals shall include: (A) A request to separately submit a sealed technical proposal and a sealed cost proposal for the transportation project; (B) The required content of the technical proposal to be submitted by the design-build firm, including design concepts for the transportation project, the proposed solutions to the requirements addressed in the department's scope of work statement, or both; (C) Any other evaluation factors the department considers appropriate, including the estimated cost of the transportation project; and (D) Any formula the department determines is appropriate to adjust the total score of a design-build firm's proposal. (2) Except as provided in this subsection (2), the department shall allow the preference to Colorado residents provided in section 8-19-101, C.R.S., in awarding an adjusted score design-build contract pursuant to this part 14. In evaluating and selecting a proposal for a design-build contract under this part 14, the department shall assign greater value to a proposal in proportion to the extent such proposal commits to using Colorado residents to perform work on the transportation project. If, however, the department determines that compliance with this subsection (2) may cause the denial of federal moneys that would otherwise be available for the transportation project or if such compliance would otherwise be inconsistent with the requirements of federal law, the department shall suspend the preference granted under this subsection (2) only to the extent necessary to prevent denial of federal moneys or to eliminate the inconsistency with federal law. (3) The department may use any basis for awarding a design-build contract pursuant to this part 14 that it deems appropriate so long as the basis for awarding such contract is adequately described in the specifications for the transportation project or the
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B-22 request for proposals. Such basis may include awarding a contract to the design-build firm whose proposal provides the best-value to the department. (4) The department may cancel any request for qualifications, request for proposals, or other solicitation issued pursuant to this part 14 or may reject any or all proposals in whole or in part when the department determines that such cancellation or rejection is in the best interest of the department. (5) If the department awards a design-build contract pursuant to this part 14, the department shall execute a design-build contract with the successful design-build firm and shall give notice to said firm to commence work on the transportation project.
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B-23 DELAWARE: Excerpts from the Delaware Code: Title 29 State Government PART VI Budget, Fiscal, Procurement and Contracting Regulations CHAPTER 69 STATE PROCUREMENT Subchapter IV. Public Works Contracting [as amended by 73 Del. Laws 41 (2001)] 29 Del. C. § 6962. Large public works contract procedures. (a) Applicability .--- Any state contract for which an agency is a party and for which the probable cost is greater than the amount set by the Contracting and Purchasing Advisory Council pursuant to 29 Del. C. § 6913 of this title for small public works contracts shall be subject to the provisions of this section. (b) Advertising requirements. ... (c) Bidder prequalification requirements . --- (1) An agency may require any potential contractor proposing to bid on a public works contract to complete a questionnaire containing any or all of the following information for the purposes of prequalification: a. The most recent audited financial statement and/or financial statement review, as provided by a certified public accountant, containing a complete statement of that proposing contractor's financial ability and standing to complete the work specified in the invitation to bid; b. The proposing contractor's experience on other public works or private projects, including but not limited to, the size, complexity and scope of the firm's prior projects; c. The supply of labor available to the proposing contractor to complete the project, including but not limited to, the labor supply ratio as defined by 29 Del. C. § 6902 (10) of this title; d. Performance reviews of the proposing contractor on previously awarded public works or private construction projects within the last 10 years; e. Civil judgments and/or criminal history of the proposing contractor's principals; f. Any debarment or suspension by any government agency; g. Any revocation or suspension of a license; or h. Any bankruptcy files or proceedings. (2) If the agency is not satisfied with the sufficiency of the answers to the questionnaire of the financial statement, the agency may refuse to furnish to the firm the plans and specifications for the work and that firm's bid may be disregarded. (3) No action of any nature shall lie against any agency or its employees because if actions prescribed in subsections (c)(1) and (2) of this section. (d) Bid specifications and plans requirements. --- (1) Preparation of plans and specifications and approvals. --- . . .
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B-24 (2) Based upon the proposing contractor's answers to the prequalification for any 1 of the following specified reasons: a. Insufficient financial ability to perform the contract; b. Inadequate experience to undertake the project; c. Documented failure to perform on prior public or private construction contracts, including but not limited to, final adjudication of admission of violations of prevailing wage laws in Delaware or any other state; d. Prior judgments for breach of contract that indicate the proposing contractor may not be capable of performing the work or completing the project; e. Criminal convictions for fraud, misrepresentation or theft related to contract procurement; f. Inadequate labor supply available to complete the project in a timely manner; g. Previous debarment or suspension of the contractor by any government agency that indicates the proposing contractor may not be capable of performing the work or completing the project; h. Previous revocation or suspension of a license that indicates the proposing contractor may not be capable of performing the work or completing the project; i. Previous bankruptcy proceedings that indicate the proposing contractor may not be capable of performing the work or completing the project; or j. Failure to provide prequalification information. (3) Denial of prequalification shall be in writing and shall be sent to the contractor within 5 working days of such decision. The agency may refuse to provide any contractor disqualified under this section the plans and specifications for the project. An agency receiving a bid from a contractor disqualified under this section shall not consider such bid. (4) Any contractor disqualified pursuant to subsections (c)(1), (c)(2) and (c)(3) of this section may review such decision with the agency head. No action in law or equity shall lie against any agency or its employees if the contractor does not first review the decision with the agency head. To the extent the contractor brings an action challenging a decision pursuant to subsections (c)(1), (c)(2) and (c)(3) of this section after such review by the agency head, the Court shall afford great weight to the decision of the agency head and shall not overturn such decision unless the contractor proves clear and convincing evidence that such decision was arbitrary and capricious. ... (13) Bid Evaluation, contract award and executive procedure. --- a. The contracting agency shall award any public works contract within 30 days of the bid opening to the lowest responsive and responsible bidder, unless the agency elects to award on the basis of best-value, in which case the election to award on the basis of best-value shall be stated in the invitation to bid. Any public school district and its board shall award public works contracts in accordance with this section's requirements except it shall award the contract within 60 days of the bid opening.
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B-25 Each bid on any public works contract must be deemed responsive by the agency to be considered for award. A responsive bid shall conform in all material respects to the requirements and criteria set forth in the contract plans and specifications. An agency shall determine that each bidder on any public works contract is responsible before awarding the contract. Factors to be considered in determining the responsibility of a bidder include 1. The bidder's financial, physical, personnel or other resources including subcontracts; 2. The bidder's record of performance on past public or private construction projects, including, but not limited to, defaults and/or final adjudication or admission of violations or prevailing wage laws in Delaware or any other state; 3. The bidder's written safety plan; 4. Whether the bidder is qualified legally to contract with the State; 5. Whether the bidder supplied all necessary information concerning its responsibility; and, 6. Any other specific criteria for a particular procurement, which an agency may establish; provided however, that, the criteria shall be set forth in the invitation to bid and is otherwise in conformity with State and/or federal law. If an agency determines that a bidder is nonresponsive and/or nonresponsible, the determination shall be in writing and set forth the basis of determination. A copy of the determination shall be sent to the affected bidder within 5 working days of said determination. The final determination shall be made part of the procurement file. If the agency elects to award on the basis of best-value, the agency must determine that the successful bidder is responsive and responsible, as defined in this subsection. The determination of best-value shall be based upon objective criteria that have been communicated to the bidders in the invitation to bid. The following objective criteria shall be assigned a weight consistent with the following: (1) Price --- must be at least 70% but no more than 90%; and (2) Schedule --- must be at least 10% but no more than 30%; and A weighted average stated in the invitation to bid shall be applied to each criterion according to its importance to each project. The agency shall rank the bidder according to the established criteria and award to the highest ranked bidder. Every state agency and school district shall, on a yearly basis, file a report with every member of the General Assembly and the Governor that states which projects were bid under best-value and what contractor was awarded each contract. (14) Suspension and debarment. --- Any contractor who fails to perform a public works contract or complete a public works project within the time schedule established by the agency in the invitation to bid, may be subject to suspension or debarment for 1 or more of the following reasons: a. Failure to supply the adequate labor supply ration for the project; b. Inadequate financial resources; or c. Poor performance on the project. ... (70 Del. Laws, c. 601, § 9; 70 Del. Laws, c. 186, § 1; 72 Del. Laws, c. 258 § 77.)
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B-26 KENTUCKY: Excerpts from the Kentucky Revised Statutes: Kentucky Model Procurement Code CHAPTER 45A 45A.080. Competitive sealed bidding. (1) Contracts exceeding the amount provided by KRS 45A.100 shall be awarded by competitive sealed bidding unless it is determined in writing that this method is not practicable. Factors to be considered in determining whether competitive sealed bidding is not practicable shall include (a) Whether specifications can be prepared that permit award on the basis of best- value; and (b) The available sources, the time and place of performance, and other relevant circumstances as are appropriate for the use of competitive sealed biding. (2) The invitation for bids shall state that awards shall be made on the basis of best- value. In any contract which is awarded under an invitation to bid which requires delivery by a specified date and imposes a penalty for late delivery, if the delivery is late, the contractor shall be given the opportunity to present evidence that the cause of the delay was beyond his control. If it is the opinion of the purchasing officer that there is sufficient justification for delayed delivery, the purchasing officer may adjust or waive any penalty that is provided for in the contract. (3) Adequate public notice of the invitation for bids shall be given a sufficient time prior to the date set forth for the opening of bids. The notice may include posting on the Internet or publication in a newspaper or newspapers of general circulation in the state as determined by the secretary of the Finance and Administration Cabinet not less than seven (7) days before the date set for the opening of the bids. The provisions of this subsection shall also apply to price contracts and purchase contracts of state institutions of higher education. (4) Bids shall be opened publicly at the time and place designated in the invitation for bids. At the time the bids are opened, the purchasing agency shall announce the agency's engineer's estimate, if applicable, and make it a part of the agency records pertaining to the letting of any contract for which bids were received. Each bid, together with the name of the bidder and the agency's engineer's estimate, shall be recorded and be open to public inspection. Electronic bid opening and posting of the required information for public viewing shall satisfy the requirements of this subsection. (5) The contract shall be awarded by written notice to the responsive and responsible bidder whose bid offers the best-value. (6) Correction or withdrawal of bids shall be allowed only to the extent permitted by regulations issued by the secretary. (Enact. Acts 1978, ch. 110. § 17, effective January 1, 1979; 1979 (Ex. Sess.), ch. 9. § 1, effective February 10, 1979; 1982, ch. 282, § 1, effective July 15, 1982; 1994, ch. 278, § 1, effective July 15, 1994; 1996, ch. 60, § 2, effective July 15, 1996; 1997 (1st Ex. Sess.), ch. 4, § 27, effective May 30, 1997; 1998, ch. 120, § 10, effective July 15, 1998; 2000, ch. 509 § 1, effective July 14, 2000.)
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B-27 45A.070. Definitions for KRS 45A.070 to 45A.165. As used in KRS 45A.070 to 45A.165, unless the context in which they are used clearly requires a different meaning: ... (3) "Best-Value" means a procurement in which the decision is based on the primary objective of meeting the specific business requirements and best interests of the Commonwealth. These decisions shall be based on objective and quantifiable criteria that shall include price and that have been communicated to the offerors as set forth in the invitation for bids. ... (Enact. Act 1978, ch. 110, § 15, effective January 1, 1979; 1990, ch. 496, § 3, effective July 13, 1990; 1997 (1st Ex. Sess.), ch. 4, § 26, effective May 30, 1997).
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B-28 NEW JERSEY: Excerpts from New Jersey Statutes: TITLE 34 LABOR AND WORKMEN'S COMPENSATION CHAPTER 1B PROMOTION OF BUSINESS AND INDUSTRY 34:1B-5.7. Preparation of separate plans, specifications; bids. 52.a. In undertaking any school facilities projects where the cost of construction, reconstruction, rehabilitation of improvement will exceed $25,000, the authority may prepare, or cause to be prepared, separate plans and specifications for (1) the plumbing and gas fitting and all work and materials kindred thereto, (2) the steam and hot water heating and ventilating apparatus, steam power plants and all work and materials kindred thereto, (3) the electrical work, (4) structural steel and miscellaneous iron work and materials, and (5) all general construction, which shall include all other work and materials required to complete the building. b. The authority shall advertise and receive (1) separate bids for each of the branches of work specified in subsection a. of this section; or (2) bids for all the work and materials required to complete the school facilities project to be included in a single overall contract, in which case there shall be set forth in the bid the name or names of all subcontractors to whom the bidder will subcontract for the furnishing of any of the work and materials specified in branches (1) through (4) in subsection a. of this section; or (3) both. c. Contracts shall be awarded as follows: (1) if bids are received in accordance with paragraph (1) of subsection b. of this section, the authority shall determine the responsible bidder for each branch whose bid, conforming to the invitation for bids, will be most advantageous to the authority, price and other factors considered; (2) if bids are received in accordance with paragraph (2) of subsection b. of this section, the authority shall determine the responsible bidder for the single overall contract whose bid, conforming to the invitation for bids, will be the most advantageous to the authority, price and other factors considered; or (3) if bids are received in accordance with paragraph (3) of subsection b. of this section, the authority shall award separate contracts for each branch of work specified in subsection a. of this section if the sum total of the amounts bid by the responsible bidders for each branch, as determined pursuant to paragraph (1) of this subsection, is less than the amount bid by the responsible bidder for all of the work and materials, as determined pursuant to paragraph (2) of this subsection; but if the sum total of the amounts bid by the responsible bidder for each branch, as determined pursuant to paragraph (1) of this subsection is not less than the amount bid by the responsible bidder for all of the work and materials, as determined pursuant to paragraph (2) of this subsection, the authority shall award a single over-all contract to the responsible bidder for all of the work and materials as determined pursuant to paragraph (2) of this subsection. d. For the purposes of this section, "other factors" means the evaluation by the authority of the ability of the single contractor or the abilities of the multiple contractors to complete the contract in accordance with its requirements and includes requirements relating to the experience and qualifications of the contractor or contractors and their key
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B-29 personnel in projects of similar type and complexity; the performance of the contractor or contractors on prior contracts with the authority or the State; the experience and capability of the contractor or contractors and their key personnel in respect to any special technologies, techniques or expertise that the project may require; the contractor's understanding of the means and methods needed to complete the project on time and within budget; the timetable to complete the project; the contractor's plan for quality assurance and control; and other similar types of factors. The "other factors" to be considered in evaluating bids and the weights assigned to price and these "other factors" shall be determined by the authority prior to the advertisement for bids for school facilities projects. In its evaluation of bids, the consideration given to price by the authority shall be at least equal to the consideration given to the combination of all "other factors." e. The authority shall require from all contractors to which it awards contracts pursuant to P.L. 2000, c. 72 (C. 18A:7G-1 et al.), the delivery of a payment performance bond issued in accordance with N.J.S. 2A:44-143 et seq. f. The authority shall adopt regulations to implement this section which shall include, but not be limited to, the procedural requirements for (1) the evaluation and weighting of price and "other factors" in the awarding of contracts and (2) the appealing of a prequalification classification and rating, a bid rejection, and a contract award recommendation. g. Each evaluation committee selected by the authority to review and evaluate bids shall, at a minimum, contain a representative from the district in which the school facilities project is located if such district elects to participate. (L. 2000, c. 72 § 52). TITLE 27 HIGHWAYS SUBTITLE 8 PUBLIC TRANSPORTATION CHAPTER 25 NEW JERSEY PUBLIC TRANSPORTATION ACT OF 1979 27:25-11. Purchases, contractors or agreements; award; advertisement for bids; exemptions; bid bond; qualification of bidders. 11.a. All purchases, contracts or agreements pursuant to this act shall be made or awarded directly by the corporation, except as otherwise provided in this act, only after public advertisement for bids therefor, in the manner provided in this act, notwithstanding the provisions to the contrary of P.L. 1948, c. 92 (C. 52:18A-1 et seq.) and chapters 25, 32, 33, 34 and 35 of Title 52 of the Revised Statutes. ... c. The corporation may reject any or all bids not in accord with the advertisement of specifications, or may reject any or all bids if the price of the work materials is excessively above the estimate cost or when the corporation shall determine that it is in the public interest to do so. The corporation shall prepare a list of the bids, including any rejected and the cause therefor. The corporation may accept bids containing minor informalities. Awards shall be made by the corporation with reasonable promptness by written notice to
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B-30 (1) the responsible bidder whose bid, conforming to the invitation for bids, will be the most advantageous to the State, price and other factors considered, for contracts other than contracts for the construction or improvement of capital facilities or (2) the lowest responsible bidder for contracts for the construction or improvement of capital facilities. The provisions of this paragraph shall not limit the corporation's right to extend, add or resume suspended work on any project. Nor shall the provisions of this paragraph apply to the procurement process for design-build projects or design-build, maintain and operate projects. Those projects shall be bid and contracts awarded in accordance with applicable regulations promulgated by the corporation. Nor shall the provisions of this paragraph affect the corporation's minority and women's business enterprise program, equal employment opportunity program or any affirmative action program. ... f. The corporation shall determine the terms and conditions of the various types of agreements or contracts, including provisions for adequate security, the time and amount or percentage of each payment thereon and the amount to be withheld pending completion of the contract, and it shall issue and publish rules and regulations concerning such terms and conditions, standard contract forms and such other rules and regulations concerning purchasing or procurement, not inconsistent with any applicable law, as it may deem advisable to promote competition and to protect the public interest. ... h. The corporation shall require that all persons proposing to submit bids on improvements to capital facilities and equipment shall first be classified by the corporation as to the character or amount or both of the work on which they shall be qualified to submit bids. Bids shall be accepted only from persons qualified in accordance with such classification. (L. 1979, c. 150, § 11; amended 1993, c. 313, § 2; 1996, c. 104; 2000, c. 128.)