Procurement of Construction and Management Services

PURPOSE: This rule sets forth the methods and procedures for selection of project construction and management services. (1) Definitions. As used in this regulation and the remainder of this chapter, the following terms mean: (A) “Affiliate,” a person who directly or indirectly controls, or has the power to control, another person or a person who is subject to the control of another person. Indicia of control include, but are not limited to: interlocking management or ownership, identity of interests among family members, shared facilities and equipment, common use of employees or a business entity organized following the suspension or debarment of a person that has the same or similar management, ownership, or principal employees as the debarred or suspended person; (B) “Bidder,” a person who submits a proposal for a construction contract in accordance with 1 CSR 30-3, or one who offers to or subcontracts to a person who submits a proposal for a construction contract; (C) “Bid documents,” a document or documents by which the division solicits proposals for a contract; (D) “Commissioner,” the Commissioner of the State of Missouri, Office of Administration; (E) “Competitive bid,” a process of advertising for bids in accordance with section 8.250, RSMo or solicitation of bids from a minimum of three (3) contractors in which an award is based on the lowest responsive, responsible bid or other pre-established criteria where cost is a factor; (F) “Debarment,” the exclusion of a contractor from performing work on a state project for an indefinite period of time; (G) “Design-build,” a project for which the design and construction services are furnished under one contract; (H) “Design-build contract,” a contract between the division and a design-builder, to furnish the architecture or engineering and related design services necessary for a given public construction project and to furnish the labor, materials, and other construction services for the same public project; (I) “Design-builder,” any individual, partnership, joint venture, corporation, or other legal entity that furnishes both the architectural or engineering services and construction services for a project, whether itself or through subcontracts; (J) “Design criteria consultant,” a person, corporation, partnership, or other legal entity duly registered and authorized to practice architecture or professional engineering in this state pursuant to Chapter 327, RSMo, and who is employed by contract to the division to provide professional design and administrative services in connection with the preparation of the design criteria package; (K) “Design criteria package,” performance-oriented program, scope, and specifications for the public construction project sufficient to permit a design-builder to prepare a response to the division’s request for proposals for a design-build project; (L) “Design services,” services that are— 1. Within the practice of professional engineering as defined in section 327.181, RSMo, or the practice of architecture as defined in section 327.091, RSMo; or 2. Performed by a registered architect or professional engineer in connection with the architect’s or professional engineer’s employment or practice; (M) “Director,” the director of the Division of Facilities Management, Design and Construction; (N) “Division,” the State of Missouri, Office of Administration, Division of Facilities Management, Design and Construction; (O) “Evaluation team,” a group of people selected by the director to evaluate bidders’ qualifications or proposals; (P) “Job order contract,” a standing contract where the prices for work are determined by specifying one (1) or more published construction unit price books and the applicable divisions or line items and/or providing a list of work items and requiring the bidders to bid or propose one (1) or more coefficients or multipliers to be applied to the price book or work items as the price proposal; (Q) “Person,” an individual, corporation, partnership, association, or legal entity; (R) “Principal,” an officer, director, owner, partner, key employee, or other person within an organizational structure having the authority to obligate the bidder in a contractual relationship; (S) “Proposal,” an offer to enter into a contract, including bids submitted in a competitive bidding process; (T) “Public construction project,” the process of designing, constructing, reconstructing, altering, or renovating state owned real property; (U) “Request for proposals,” a document by which the division solicits proposals for a contract; (V) “Standing Contract,” a contract for construction, renovation, maintenance, and/or repair services to be performed during a specified period of time where the delivery times and quantities of work are indefinite, and the cost of orders for work to be performed under the contract is based on predetermined rates; (W) “Stipend,” an amount paid to the unsuccessful proposers to defray the cost of submission of phase II of the design-build proposal; (X) “Suspension,” the exclusion of a contractor from performing work on a state project for a temporary period of time. (2) Competitive Bidding. (A) Soliciting Bids. Section 8.250, RSMo requires that bids be solicited for work on public construction projects. When appropriate, solicitation for bids will go beyond the minimum requirements of the statutes and/or this rule. Notice of solicitation for bids on projects in major metropolitan areas will be sent to minority contractor assistance organizations. Solicitation for bids is authorized only after review and approval of drawings and specifications have been completed in accordance with 1 CSR 30-3.030. 1. Projects costing more than twenty-five thousand dollars ($25,000). Projects costing more than twenty-five thousand dollars ($25,000) will have solicitation advertised in accordance with section 8.250, RSMo. In addition, when appropriate, individual firms will be contacted to determine and/or solicit their interest. 2. Projects costing twenty-five thousand dollars ($25,000) or less. Projects costing twenty-five thousand dollars ($25,000) or less will be referred to in these regulations as small projects. Small projects may be accomplished using standing contracts or individually procured by the agency in accordance with the current policies of the Division of Facilities Management, Design and Construction. 3. Emergency projects. A. Projects for emergency repairs the cost of which exceeds twenty-five thousand dollars ($25,000) require approval of the director. Requests should include scope, source of funding and, when appropriate, drawings, specifications, and proposal forms. B. The director may waive the requirement of competitive bids for construction projects when the director has determined that there exists a threat to life, property, public health, or public safety or when immediate projects are necessary for repairs to state property in order to protect against further loss of, or damage to, state property, to prevent or minimize serious disruption in state services or to ensure the integrity of state records. Emergency contracts for construction shall be made with as much competition as is practicable under the circumstances. C. For emergency repair projects, firms that are available and competent to perform the necessary work will be invited to visit the site for examination and discussion of the work. Attending firms will be provided with available drawings, specifications, proposal forms, and instructions for submitting proposals. Telephone bids for an hourly rate with a “total not to exceed” amount may be accepted. D. Work included in an emergency request for proposals shall be held to the minimum necessary to eliminate hazards and/or prevent further damage. Corrective work shall not be included in the emergency request, but incorporated into a separate project for later solicitation. 4. Project related equipment. If it is determined that it is necessary or expedient for project related equipment or materials to be separately procured, the Division of Facilities Management, Design and Construction will prepare the necessary specifications and procure the equipment using appropriate competitive bidding procedures. (B) Pre-Bid Conference. When appropriate, a pre-bid conference will be held at the project site. Interested firms will be invited to inspect and discuss the project work. Answers and clarification to substantive questions raised at the pre-bid conference will be published in an addendum distributed to all plan holders having made deposits. (C) Addenda. Substantive changes or clarifications established between the times of solicitation and receipt of proposals will be issued as addenda to all plan holders who hold plans. Sufficient time, including an extension if necessary, will be allowed for addenda to be received, considered, and incorporated into proposals submitted for the work. (D) Receipt and Opening of Proposals. Unless otherwise approved by the director, all proposals will be received at the office of the division. Proposals received in response to a solicitation shall be held secure until the bid opening. If requested in writing and properly identified prior to the set date and time for opening, proposals may be returned to the firm making the submission. At the set date and time, all proposals received shall be opened and made public. Proposals received after the set date and time for openings shall be returned unopened to the firm making the late submission. For good and sufficient cause, in the best interest of Missouri, the director may reject any or all proposals. (E) Evaluation of Proposals. Proposals received shall be evaluated based on the method of procurement as defined in the bid documents within the available appropriations. When several appropriation items are combined in a single lump sum bid item, the total price for the sin gle bid item shall not exceed the total of the amounts appropriated for all the included items. (F) Contracts. Approval by the director of a contract for a project costing twenty-five thousand dollars ($25,000) or more will be granted only after review and approval of drawings and specifications in accordance with 1 CSR 30-3.030. 1. Award of contracts shall be made to the bidder successfully meeting the requirements of the bid documents within the available appropriations. 2. Intent to Award. An intent to award letter will be issued to the successful bidder upon approval by the director. The purpose of the intent to award letter is to notify the successful bidder of their selection so they may obtain the insurance, performance bond, and other documentation necessary to allow the notice to proceed to be issued. 3. Contract Documents. Contract documents may require, as appropriate, performance/payment bond, Workers’ Compensation insurance, comprehensive general liability and property damage insurance, automobile public liability and damage insurance, owner’s protection liability insurance, builder’s risk (or installation floater) insurance, and special hazard insurance. The director or his/her designee will determine the form and items required to provide the complete contract documents. Evidence of these items shall be furnished on the forms and in amounts determined by the director to be necessary and/or in compliance with current statutes. In addition, drawings and specifications on which proposals were submitted shall be incorporated by reference in the contract signed by the successful bidder. Contracts shall not be approved until these contract documents, properly executed, are received by the director. The director has discretion to reject any insurer for bond and insurance tendered. Failure to perform on a prior contract may be cause for rejection of an insurer. Failure to furnish the mandatory contract documents in a reasonable time may be treated by the director as refusal to accept the contract and/or execute the contract. 4. Notice to Proceed. Notice to proceed with work on a project will be issued by the director, or his/her designee, and work on a project will not be authorized until a notice is issued. This notice shall be issued only after encumbrance of funds for the contract. (3) Pre-qualification. (A) Criteria. The division may require prequalification of bidders when the construction project to be bid— 1. Is highly specialized as to the work to be performed; 2. Requires significant experience in the method of construction specified; 3. Requires specialized equipment and experience with such equipment; 4. Requires specific expertise in the installation of sophisticated equipment, systems, or controls; 5. Requires a minimum level of training or certification from specified equipment manufacturers; 6. Must be completed within a critical time frame; or 7. Requires higher than “industry standard” quality control. (B) Selection. The director will select those projects for which pre-qualification of bidders is appropriate. (C) Procedure. The pre-qualification process will be a one- (1-) step process. The division shall prepare a request for qualifications for specific selected project with a description of the project, the rationale for the decision to pre-qualify bidders, the procedures for submittal and the selection criteria to be Design and Construction used. Notice of the request for qualifications shall be advertised in accordance with section 8.250, RSMo. The selection criteria to be used in the pre-qualification may include— 1. Experience of the bidder with similar projects; 2. Experience of key personnel proposed for project; 3. List of recent projects of similar scope and value; 4. Bonding capacity; 5. List of specified equipment available to bidder; 6. References; 7. Safety records; 8. Previous project completion schedules; 9. Previous project contract change rates; and 10. Qualifications of subcontractors proposed for specified areas of work. (D) Evaluation. An evaluation team consisting of at least three (3) representatives of the division shall be selected by the director to evaluate the qualifications submitted by all potential bidders. 1. The evaluation team shall review the submittals of the potential bidders and assign points to each submittal in accordance with the criteria established for the project and as set out in the instructions of the request for qualifications. 2. All potential bidders obtaining a predetermined number of points shall be prequalified to submit a bid on the project on a date specified. 3. Only bids from pre-qualified bidders will be accepted and opened. Bid evaluation shall be on the basis of the lowest, responsive, responsible bidder. (4) Project/Construction Management. (A) Project/construction management services may be procured as provided in sections 8.675 to 8.687, RSMo. (5) Design-Build. (A) Criteria. The director will select those projects for which the use of design-build procurement is appropriate. In making that determination, the director should consider— 1. The likelihood of whether either method of procurement will serve the public interest by providing substantial savings of time or money over the traditional design/bid/build delivery process; 2. The time available to complete the project and meet the needs of the agency and any need to expedite the delivery process; 3. The type of project and its suitability of either method; 4. The size of the project; 5. The level of agency knowledge and confidence about the project scope and definition; 6. The availability of the using agency staff to manage the project; and 7. The availability of the division staff to manage the project. If a design-build process is selected, the director will determine the scope and level of detail necessary to permit qualified persons to submit proposals in accordance with the request for proposals given the nature of the project. (B) Procedure. A design criteria consultant may be employed or retained by the division director to assist in preparation of the request for proposal, perform periodic site visits, prepare progress reports, review, and approve progress and final pay applications of the design-builder, review shop drawings and submittals, decide disputes, interpret the construction documents, perform inspections upon substantial and final completion, assist in warranty inspections, and to provide any other professional service where the director deems it to be in the public interest to have an independent design professional assisting with the project administration. The consultant will be selected and its contract negotiated in compliance with sections 8.285 to 8.291, RSMo. 1. Notice of requests for proposals shall be advertised in accordance with section 8.250, RSMo. The division shall publish a notice of a request for proposal with a description of the project, the rationale for the decision to use the design-build method of procurement, the procedures for submittal, and the selection criteria to be used. 2. The director shall establish in the request for proposal a time, place, and other specific instructions for the receipt of proposal. Proposals not submitted in strict accordance with those instructions shall be subject to rejection. 3. A request for proposals shall be prepared for each design-build contract containing at minimum the following elements: A. The procedures to be followed for submitting proposals, the criteria for evaluation of proposals, and their relative weight and the procedures for making awards; B. The proposed terms and conditions for the design-build contract; C. The design criteria package; D. A description of the drawings, specifications, or other information to be submitted with the proposal, with guidance as to the form and level of completeness of the drawings, specifications, or other information that will be acceptable; E. A schedule for planned commencement and completion of the designbuild contract; F. Budget limits for the design-build contract, if any; G. Affirmative action and minority or women business enterprise requirements for the design-build contract, if any; H. Requirements including any available ratings for performance bonds, payment bonds, and insurance; and I. Any other information that the division in its discretion chooses to supply, including, without limitation, surveys, soil reports, drawings of existing structures, environmental studies, photographs, or references to public records, or affirmative action and minority business enterprise requirements consistent with state and federal law. 4. The director will solicit proposals in a three- (3-) stage process. Phase I will be the solicitation of qualifications of the designbuild team. Phase II will be the solicitation of a technical proposal including conceptual design for the project, and Phase III will be the proposal of the construction cost. 5. The evaluation team shall consist of at least two (2) representatives of the division, two (2) representatives of the using agency, and a fifth member selected by the director who shall serve as chairman to facilitate the evaluation process and vote only in case of a tie. The evaluation team shall review the submittals of the proposers and assign points to each proposal in accordance with this regulation and the request for proposal. 6. In Phase I all proposers shall submit a statement of qualification that includes, but is not limited to— A. Demonstrated ability to perform projects comparable in design, scope, and complexity; B. References of owners for whom design-build projects have been performed; C. Qualifications of personnel who will manage the design and construction aspects of the project; and D. The names and qualifications of the primary design consultants and the contractors with whom the design-builder proposes to subcontract. The design-builder may only replace an identified subcontractor or subconsultant with the written approval of the director. 7. Architectural and engineering services on the project shall be evaluated in accordance with the requirements of sections 8.285 to 8.291, RSMo. Qualified proposers selected by the evaluation team may proceed to Phase II of the selection process. Proposers lacking the necessary qualifications to perform the work shall be disqualified and not allowed to proceed to Phase II of the process. Under no circumstances shall price or fee be a part of the prequalification criteria. Points assigned in the Phase I evaluation process will not carry forward to Phase II of the process. All qualified proposers shall be ranked on points given in Phases II and III only. 8. The director has discretion to disqualify any proposer, which in the director’s opinion, lacks the minimal qualifications necessary to perform the work. 9. Once a sufficient number of qualified proposers have been selected, the proposers will be given a specified amount of time with which to assemble Phase II and Phase III proposals. 10. Phase II of the process shall be conducted as follows: A. The director will invite the top qualified proposers to participate in Phase II of the process; B. The design proposal should demonstrate compliance with the requirements set out in the request for proposal, including the level of detail requested for the design; C. The ability of the proposer to meet the schedule for completing a project as specified by the owner may be considered as an element of evaluation in Phase II; D. Up to twenty percent (20%) of the points awarded to each proposer in Phase II may be based on each proposer’s qualifications and ability to design, contract, and deliver the project on time and within budget of the Office of Administration; E. Under no circumstances should the design proposal contain any reference to the cost of the proposal; and F. The design submittals will be evaluated and assigned points in accordance with the requirements of the request for proposal. Phase II shall account for no less than forty percent (40%) of the total point score as specified in the request for proposal. 11. Phase III shall be conducted as follows: A. The Phase III proposal must provide a firm, fixed cost of construction and be accompanied by bid security and any other submittals mandated by the request for proposals, such as statements of minority participation; B. Cost proposals must be submitted in accordance with the request for proposal. The director shall reject any proposal that is not submitted on time. Phase III shall account for not less than forty percent (40%) of the total point score as specified in the request for proposal; C. Proposals for Phase II and Phase III shall be submitted concurrently at the time and place specified in the request for proposal. The Phase III cost proposals shall be opened only after the Phase II design proposals have been evaluated and assigned points; D. Cost proposals will be opened and read aloud at the time and place specified in the request for proposal. At the same time and place, the evaluation team will make public its scoring of Phase II. Cost proposals will be evaluated in accordance with the requirements of the request for proposal. In evaluating the cost proposals, the low bidder shall be awarded the total number of points assigned to be awarded in Phase III. For all other bidders, cost points will be calculated by reducing the maximum points available in Phase III by two percent (2%) or more for each percentage point of the low bid by which the bidder exceeds the low bid and the points assigned will be added to the points assigned for Phase II for each proposer; E. If the director determines that it is not in the best interest of the state to proceed with the project pursuant to the proposal offered by the proposer with the highest total number of points, the director may reject all proposals. In such event, all qualified proposers with lower point totals shall receive a stipend and the proposer with the highest total number of points shall receive an amount equal to two (2) times such stipend. If the director determines to award the project, the responsive proposer with the highest number of points shall be awarded the contract; and F. If all proposals are rejected, the director may solicit new proposals using different design criteria, budget constraints, or qualifications. 12. As an inducement to qualified proposers, the division may pay a reasonable stipend, the amount of which shall be established in the request for proposal, to each prequalified design-builder whose proposal is responsive but not accepted. Upon payment of the stipend to any unsuccessful designbuild proposer, the state shall acquire a nonexclusive right to use the design submitted by the proposer, and the proposer shall have no further liability for its use by the state in any manner. If the design-build proposer desires to retain all rights and interest in the design proposed, the proposer shall forfeit the stipend. (6) Standing Contracts. (A) The minimum and maximum amounts of work to be performed under a standing contract shall be stated in the bid documents issued by the division. Once work reaches the maximum amount, no further work may be performed under the contract. (B) The amount of each order for a job or project issued under a standing contract shall not exceed the amounts set forth in section 8.255, RSMo. (C) The division shall advertise for, receive, and publicly open sealed proposals for standing contracts in accordance with the competitive bidding standards established by Chapter 8, RSMo and these regulations. (D) The division may require bidders on standing contracts to submit additional information besides rates, including experience, past performance, and proposed personnel and methodology. (E) The division may award standing contracts to one (1) or more contractors in connection with each solicitation of bids or proposals. (F) An order for a job or project under a standing contract must be signed by the division’s representative and the contractor. The order may be a fixed price, lump-sum contract based substantially on contractual unit pricing applied to estimated quantities, or may be a unit price order based on the quantities and line items delivered. (G) The contractor shall provide payment and performance bonds as set forth in bid documents issued by the division. (H) The base term of a standing contract is for the initial period and any renewal options that the division sets forth in the bid documents. The base term may not exceed two (2) years and is not renewable without further advertisement and solicitation of proposals. (I) If a standing contract or an order issued under the contract requires services that constitute the practice of engineering or the practice of architecture, those services shall be provided in accordance with applicable law. (7) Contractor Responsibility. The director has the authority to declare a contractor not responsible, and to either suspend or debar the contractor from performing work on any state project. (A) Initial Decision. 1. Notice of the director’s decision to suspend or debar a contractor shall be sent to the contractor by certified mail, return receipt requested. The notice should contain a statement as to the factual basis for the contractor’s suspension or debarment, the length of the suspension, and an explanation of what the contractor must do to be found eligible to again submit bids on contracts. 2. Upon receipt of notice of suspension or debarment, the contractor may request a hearing in front of the director or his/her appointed designee. The hearing will be informally conducted and provide the contractor or affiliates an opportunity to present any facts that may tend to show that the contractor is in Design and Construction fact responsible. 3. Any request for a hearing must be postmarked within ten (10) consecutive calendar days of the date of receipt of the notice, as evidenced by the return receipt. 4. The director shall render a determination within sixty (60) consecutive calendar days of the hearing. The determination shall be sent to all parties by certified mail, return receipt requested. The determination shall set forth the basis for the suspension or debarment, the length of ineligibility, and the showing required for the contractor to once again be determined eligible to bid on contracts. The determination may affirm, reverse, or modify the preliminary determination. (B) Appeal. The contractor may request that the director’s determination be reviewed by the commissioner of administration or his/her appointed designee. 1. Any request for review must be in writing and be filed with the commissioner within fourteen (14) consecutive calendar days of the date of receipt of the director’s final determination, as evidenced by the return receipt. The request must set forth specific reasons why relief should be granted. 2. A review under this section will be based solely on the documentation submitted by both the contractor and the director. No new hearing will be provided. The commissioner may set aside a determination only if it is found to be an abuse of discretion. 3. The commissioner’s determination shall be issued within sixty (60) consecutive calendar days of the date of the request for review and shall be mailed to all parties. 4. The decision of the director or the commissioner to suspend or debar a contractor is not a “contested case” as defined in Chapter 536, RSMo. (C) Effect of Suspension or Debarment. During the period of suspension or debarment, a suspended or debarred contractor will not be eligible to receive invitations for bids or requests for proposals or to be awarded any contract by the division. A suspended or debarred contractor may also not participate in any contract with the division. This restriction includes being a subcontractor, consultant, sub-consultant, or supplier to any eligible contractor, as well as submitting a bid as part of a partnership or joint venture. 1. If a contractor enters into any contract to perform work on a state project during a period of suspension or debarment, the director may issue a determination extending the time of suspension, changing a suspension to a debarment, or changing the showing that the contractor must make to be determined eligible to perform work on future contracts. 2. Any eligible contractor who knowingly contracts with a suspended or debarred contractor to provide labor or materials on a contract with the division may be suspended or debarred. 3. A suspension or debarment may extend to any affiliate of the contractor who had actual or constructive knowledge of the preliminary determination of suspension or debarment. 4. The director may suspend a contractor for a period not to exceed one (1) year or debar a contractor indefinitely. After the stated period of suspension has expired or more than two (2) years has passed since the finding of debarment, the contractor may apply to the director to be declared eligible. The contractor must show that the contractor has complied with the terms set forth in the final determination of suspension or debarment. If the contractor applies for reinstatement but is unable to demonstrate responsibility to the director, the contractor shall continue to be ineligible until the required information is provided. (D) Cause for Suspension or Debarment. The director may suspend or debar a company or firm and their named principals for any or a combination of the following reasons: 1. Commission of a criminal offense related to obtaining or performing a government contract; 2. Violation of antitrust statutes; 3. Commission of fraud, embezzlement, theft, forgery, making false statements, or tax evasion; 4. Commission of any other offense or action indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of the contractor; 5. Debarment of the contractor by another state, the federal government, another entity of the state of Missouri, or by a political subdivision of the state of Missouri; or 6. Violations of material contract provisions, which include, but are not limited to failure to, perform or negligent performance of any term or standard of one or more contracts. The failure to perform caused by acts beyond the control of the contractor, or a subcontractor, or material supplier, shall not be considered a basis for suspension or debarment. AUTHORITY: sections 8.250, 8.255, 8.310, and 8.320, RSMo 2016.* Original rule filed Nov. 5, 2007, effective June 30, 2008. Amended: Filed Nov. 30, 2018, effective July 30, 2019. *Original authority: 8.250, RSMo 1939, amended 1957, 1995, 2007; 8.255, RSMo 1995, amended 2005, 2007; 8.310, RSMo 1958, amended 1965, 1984, 1985, 1995, 2014; and 8.320, RSMo 1958, amended 1965, 2014.