Publications & Presentations
September 9, 2016
By Thomas P. Hohenstein and Justin R. Watkins 

DESIGN-BUILD CONSTRUCTION

In this second part of our two-part series examining the rules governing construction manager at-risk and design-build construction now available to political subdivision’s in Missouri, we review the new rules specific to design-build construction.  

Standards for Selecting the Design-Builder’s Project Architect orEngineer, and the Public Owner’s “Design Criteria Consultant”

The legislation for design-build project delivery on public projects will be codified under new § 67.5060 of the Missouri Revised Statutes (“RSMo.”).  In selecting a design-builder a political subdivision is, in essence, also selecting the architect or engineer (“A/E”) to design the project.  The design-build legislation therefore applies, in part, the same standards and principles which now apply to the selection of an A/E for typical design-bid-build public projects under Missouri’s “Little Brooks Act”, § 8.285-8.291, RSMo.  Notably, though, the new legislation expressly provides that the selected design-build contractor need not itself by a duly-licensed A/E, so long as the architectural and/or engineering services are performed by a licensed A/E.  However, and in contrast to the selection of a single A/E to prepare the construction and engineering drawings in a standard design-bid-build procurement, a political subdivision utilizing design-build must also select an A/E to act as a “design criteria consultant”, unless the political subdivision already employs a qualified A/E to perform the role.  The design criteria consultant develops the “design criteria package”:  in essence the request for proposals (“RFP”) establishing the general program, scope, specifications and other characteristics of the project sufficient to solicit a meaningful design-build proposal.  The design criteria consultant must also serve as the political subdivision’s “owner’s representative” throughout the award, design and construction process.  

Eligible Projects

Like the construction management at-risk legislation, any political subdivision may now use design-build procurement for a construction project.  But unlike the new construction management at-risk legislation, the design-build legislation does not place minimum dollar values for civil or non-civil public projects.  Perhaps the cost associated with engaging a design criteria consultant for the project, and mandatory stipends to compensate unsuccessful design-build bidders, ensures that public design-build procurement will only be used on high dollar projects.  Additionally, as with the construction management at-risk legislation, the design-build legislation does not apply to any metropolitan sewer district, or any particular cities or counties that have already adopted a design-build process by ordinance, rule or regulation.

Selection of the Design-Builder

The design builder is selected under a three stage process, following public notice of the RFP for the design criteria package prepared by the political subdivision’s design criteria consultant.  The RFP must include, among other things, the procedures for submitting proposals, the proposed contract, the design criteria package, with drawing, specification and other information, and the schedule and budget limits.  

Phase I:  Prequalification Standards.  Each design-build applicant must first submit a “qualifications statement” describing the applicant’s experience with similar projects, and listing owner references, qualified personnel, and the names and identity of the primary trade contractors with whom the design-builder proposes to subcontract with, or team as a joint venture.  The political subdivision must evaluate applications in accordance with the same standards applicable to selection of any A/E on typical design-bid-build projects under, as noted above.  No price or fee information shall be included or considered at this stage.  The public owner shall evaluate the qualifications and assign point-rankings to the applicants. Once the applicants are selected and ranked based upon general pre-qualification, the public owner must then proceed through a two-tier selection process, first looking at design and performance factors and second considering cost.  Both a design proposal and cost proposal must be submitted simultaneously, but evaluated and ranked separately under a point system with each category accounting for no less than 40% of the total points and no more than 60% of the total points.

Phase II:  Ranking of the Design Proposals.  Based upon the ranking of the qualified design-builders, the public owner then solicits design proposals for the project as specified in the RFP.  The design proposals must be evaluated solely on the design, and the perceived ability of the applicant to design, contract and deliver the project on time and within budget.  The design and performance factors must account for no less than 40% (and no more than 60%) of the total point value in the selection process.  

Phase III:  Solicitation and Acceptance of Cost Proposals.  Although submitted concurrently with the design proposal, the cost proposal shall only be opened and evaluated after the Phase II design proposals have been evaluated and points assigned.  The cost proposals, like competitive bid proposals, are opened and read aloud and the “lowest responsive bidder” shall be assigned the total remaining points.  The other bidders shall then each be assigned points calculated under a formula based upon the amount by which the higher bidders’ price exceeds that of the lowest responsive bidder.  The responsive design-builder with the highest accumulated point total following phase III is awarded the project.  

Stipend and Sunset Provisions

In the event the public owner does not want to contract with the design-builder having the highest combined score, or otherwise elects not to proceed with the project, the public owner can refuse to award the contract to the bidder with highest point total, but then must reject all proposals and pay predetermined stipend amounts to each bidder, and start the process anew. Stipends are also required to be provided to each qualified design-builder who submits a design and price proposal at an amount no less than one half of 1% of the total project budget, provided the designer builder accepting a stipend grants the public a non-exclusive right to use the design submitted by the design-builder, who shall than be released from further liability with respect to the use of the design.  

Finally, like the construction management at-risk legislation, the design-build legislation requires that the project be bonded, and also contains a ten (10) year sunset provision.