DESIGN-BUILD CONTRACTING.

SEC. 1307. DESIGN-BUILD CONTRACTING. (a) Authority.— Section 112(b) of title 23, United States Code, is amended— 112 STAT. 230 (1) in the first sentence of paragraph (1) by striking “paragraph (2)” and inserting “paragraphs (2) and (3)”; (2) in paragraph (2)(A) by striking “Each” and inserting “Subject to paragraph (3), each”; and (3) by adding at the end the following: “(3) Design-build contracting.— “(A) In general.— A State transportation department or local transportation agency may award a design-build contract for a qualified project described in subparagraph (C) using any procurement process permitted by applicable State and local law. “(B) Limitation on final design.— Final design under a design-build contract referred to in subparagraph (A) shall not commence before compliance with section 102 of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). “(C) Qualified projects.— A qualified project referred to in subparagraph (A) is a project under this chapter for which— “(i) the Secretary has approved the use of design-build contracting described in subparagraph (A) under criteria specified in regulations issued by the Secretary; and “(ii) the total costs are estimated to exceed— “(I) in the case of a project that involves installation of an intelligent transportation system, $5,000,000; and “(II) in the case of any other project, $50,000,000. “(D) Design-build contract defined.— In this paragraph, the term ‘design-build contract’ means an agreement that provides for design and construction of a project by a contractor, regardless of whether the agreement is in the form of a design-build contract, a franchise agreement, or any other form of contract approved by the Secretary.” . (b) Inapplicability of Standardized Contract Clause Requirement.— Section 112(e)(2) of such title is amended— (1) by striking “Paragraph” and inserting the following: “(A) State law.— Paragraph” ; (2) by adding at the end the following: “(B) Design-build contracts.— Paragraph (1) shall not apply to any design-build contract approved under subsection (b)(3).” ; and (3) by aligning the remainder of the text of subparagraph (A) (as designated by paragraph (1) of this subsection) with subparagraph (B) of such section (as added by paragraph (2) of this subsection). (c) Regulations.— (1) In general.— Not later than the effective date specified in subsection (e), after consultation with the American Association of State Highway and Transportation Officials and representatives from affected industries, the Secretary shall issue regulations to carry out the amendments made by this section. (2) Contents.— The regulations shall— (A) identify the criteria to be used by the Secretary in approving the use by a State transportation department112 STAT. 231 or local transportation agency of design-build contracting; and (B) establish the procedures to be followed by a State transportation department or local transportation agency for obtaining the Secretary’s approval of the use of design-build contracting by the department or agency. (d) Effect on Experimental Program.— Nothing in this section or the amendments made by this section affects the authority to carry out, or any project carried out under, any experimental program concerning design-build contracting that is being carried out by the Secretary as of the date of enactment of this Act. (e) Effective Date for Amendments.— (1) In general.— The amendments made by this section take effect 3 years after the date of enactment of this Act. (2) Transition provision.— (A) In general.— During the period before issuance of the regulations under subsection (c), the Secretary may approve, in accordance with an experimental program described in subsection (d), design-build contracts to be awarded using any process permitted by applicable State and local law; except that final design under any such contract shall not commence before compliance with section 102 of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). (B) Previously awarded contracts.— The Secretary may approve design-build contracts awarded before the date of enactment of this Act. (C) Design-build contract defined.— In this paragraph, the term “design-build contract” means an agreement that provides for design and construction of a project by a contractor, regardless of whether the agreement is in the form of a design-build contract, a franchise agreement, or any other form of contract approved by the Secretary. (f) Report to Congress.— (1) In general.— Not later than 5 years after the date of enactment of this Act, the Secretary shall submit to Congress a report on the effectiveness of design-build contracting procedures. (2) Contents.— The report shall contain— (A) an assessment of the effect of design-build contracting on project quality, project cost, and timeliness of project delivery; (B) recommendations on the appropriate level of design for design-build procurements; (C) an assessment of the impact of design-build contracting on small businesses; (D) assessment of the subjectivity used in design-build contracting; and (E) such recommendations concerning design-build contracting procedures as the Secretary determines to be appropriate.