My last post discussed the new design-build construction method authorized by the General Assembly during the 2013 Session.  S.L. 2013-401/H857 created not only a design-build construction contracting process, but also a construction contracting process called design-build bridging.  Enacted as G.S. 143-128.1B, design-build bridging might be thought of as design-build “lite,” meaning it is a somewhat scaled-down version of design-build (“Great taste, less filling” for those who remember those ads).

Design-Build Bridging Compared to Design-Build

The design-build bridging construction method is a two-step process that differs from design-build in two significant ways.  First, the unit contracts separately with an architect or engineer to design 35% of the project (referred to in the statute as the “design criteria”[1]).  The unit then solicits proposals from design-build firms based on the design criteria package and contracts with a design-builder to complete the design and perform construction.  The design criteria package acts as “bridging” documents between initial project concept and the design-build phase – hence the name of this construction method.  These bridging documents provide enough project requirements in preliminary drawings and specifications to enable design-build bidders to submit a responsive bid.^[2]

The second difference between design-build bridging and design-build involves the solicitation of fees and the standard of award for the contract.  Under the design-build method, fees are not solicited in the RFQ for design-build services and the contract is awarded based on the qualifications-based selection method of the Mini-Brooks Act (G.S. 143-64.31).  Under the design-build bridging method, fees and price estimates are solicited in the RFP for design-build services and the contract for these services is awarded based on the lowest responsive, responsible bidder standard of award.

Design-Build Bridging Contracting Process

To enter into a design-build bridging contract, the unit of government must follow specific procedures set out in the new G.S. 143-128.1B.  While many aspects of these procedures mirror those for design-build (see, G.S. 143-128.1A), there are some notable differences.  Units of government should be aware of these differences and take them into account when considering whether either design-build or design-build bridging is an appropriate construction delivery method for a particular project.

Criteria for Using Design-Build Bridging:^[3] The unit must establish written criteria for determining when using this method is appropriate for a project.  While the criteria must be in writing, governing board approval is not specifically required.  The statute requires the unit to adopt the criteria for each project (in other words, the unit cannot adopt blanket criteria).  The criteria must address the same six factors as are required for a design-build project:

1)     The unit’s ability to “adequately and thoroughly” define the project requirements in the RFP;

2)     Time constraints for project delivery;

3)     The unit’s ability to ensure that a quality project can be delivered;

4)     The availability of qualified staff or outside consultants experienced in design-build to manage and oversee the project;

5)     Good faith efforts to comply with historically underutilized business participation requirements (G.S. 143-128.2 and -128.4) and to recruit and select small business entities (the term “small business entities” is not defined in the statute); and

6)     The criteria used by the unit, including a cost-benefit analysis of using design-build in lieu of traditional construction bidding methods.

Selecting the Design Criteria Design Professional:  Before issuing the RFP for design-build services, the unit selects either a staff design professional (an architect or engineer employed by the unit) or follows the Mini-Brooks Act to contract with an architect or engineer.  This design professional (whether it be an employee or an outside design professional) develops the design criteria package, and acts as the unit’s representative during the design-build contracting process and through the life of the project.  The design professional is not eligible to bid on the design-build contract or provide input to a design-build bidder during the procurement process.

Design Criteria Package:[4] The design criteria design professional develops the design criteria for the project in consultation with the unit and prepares a design package consisting of 35% of the design documentation for the entire project.  The design criteria package must include the following nine items:

1)     Programmatic needs, interior space requirements, intended space utilization, and other capacity requirements;

2)     Physical characteristics of the site such as a topographic survey;

3)     Material quality standards or performance criteria;

4)     Special material requirements;

5)     Provisions for utilities;

6)     Parking requirements;

7)     Type, size, and location of adjacent structures;

8)     Preliminary or conceptual drawings and specifications in sufficient detail to enable design-build teams to submit responsive bids; and

9)     Notice of the unit’s rules, ordinances, or goals (presumably related to the project).

Public Notice:^[5]  After developing the design criteria package, the unit must issue a public notice of a request for proposals (RFP) for design-build firms to complete the design and perform the construction. The statute does not specify the minimum time for or method of publication.  Since the design-build contract is awarded based on the lowest responsive, responsible bidder standard of award, units may want to follow the published notice procedures for formal purchase and construction contracts under G.S. 143-129(b).

RFP Requirements:^[6] The RFP must include general information on the same eight items required for a design-build RFQ, but must also include two additional elements:

1)      The design criteria package prepared by the design criteria design professional; and

2)      A statement that each design-build bidder must submit with its proposal in a sealed envelope its price for providing the general conditions of the contract and fees for design services and general construction services.

The solicitation of fees and prices is a significant departure from the design-build process, which prohibits soliciting fee and price estimates in the RFQ for design-build services.  Note also that this information must be submitted with the bidder’s proposal in a sealed envelope; a bid that does not contain sealed fee and price proposals would be considered nonresponsive.

Receiving Responses:^[7] As with design-build, the unit must receive at least three responses to its RFP in order to consider proposals.  If the unit receives less than three responses, it must resolicit (just as is required for formal construction bids).  After the second advertisement, the unit may consider proposals even if three are not received.  Each bidder must certify that all members of its design-build team who are licensed design professionals, including subconsultants, were selected as required under the Mini-Brooks Act.

Evaluating Responses and Awarding the Contract:^[8]  After receiving proposals, the unit evaluates and ranks them, and then groups the top three without specific ordinal ranking.  From among these three respondents the unit selects the design-builder who is the lowest responsive, responsible bidder based on the cumulative amount of fees for providing the general conditions of the contract, design services, and general construction services, and taking into consideration quality, performance, and the time specified in the proposal for performance of the contract.   This standard of award is substantially different from that for design-build where the design-builder is selected based on qualifications.

Subcontractors:^[9] The design-builder with whom the unit contracts must use the competitive bidding requirements of Article 8 of Chapter 143 in hiring first-tier subcontractors on the project (design professionals are not considered first-tier subcontractors).^[10]

Performance and Payment Bonds: As with design-build, the selected design-builder must provide bonds under Article 3 of Chapter 44A, which requires performance and payment bonds for 100% of the contract amount for each contract costing more than $50,000 on projects costing over $300,000.

 Substituting Key Personnel: After the contract is awarded, the winning bidder can only substitute key personnel after obtaining written approval from the unit of government.^[11]

Stay tuned for my next post which will highlight the third new construction delivery method authorized by the General Assembly in 2013 – public-private partnerships.