Assigned to GOV &                                                                                                                   FOR COMMITTEE

 

 

 

 

ARIZONA STATE SENATE

Fifty-Third Legislature, Second Regular Session

 

FACT SHEET FOR H.B. 2304

 

public buildings; omnibus

 

Purpose

 

Extends the time periods in which a city, county or political subdivision (agent) may procure certain specified construction project delivery methods for horizontal construction. Establishes parity between contract amount thresholds for technical registrants and architects.

 

Background

 

In 2000, the Legislature enacted the Alternative Project Delivery Method (APDM) statutes as an optional alternative to the traditional procurement process of design-bid build. APDM authorizes the state, its agencies and political subdivisions to utilize construction-manager-at-risk, design-build and job-order-contracting project delivery methods for construction services (Laws 2000, Chapter 135). The APDM currently has a delayed repeal date that has been extended periodically. The ability to procure construction-manager-at-risk services for horizontal construction projects where the Federal Transit Administration (FTA) or the Federal Aviation Administration (FAA) are used as a source of monies to fund the project is set to expire on June 30, 2018 (A.R.S. § 34-603). Additionally, the ability to procure any horizontal construction using APDM is set to expire on June 30, 2020 (A.R.S. § 34-605).

 

Current statute requires an agent to procure the professional services of technical registrants through APDM if the contract with the registrant is in excess of $500,000. For contracts less than $500,000, an agent may employ direct selection, public competition or selection committee procurement methods. The contract amount threshold that determines the procurement method for architects is currently $250,000 (A.R.S. § 34-103).

 

Current statute defines horizontal construction as the construction of highways, roads, streets, bridges, canals, floodways, earthen dams, landfills, light rail and airport runways. Design-build is defined as a project delivery method in which there is a single contract for design services and construction services. Construction-manager-at-risk is defined as a project delivery method in which there is a separate contract for design services and a separate contract for construction services. Job-order-contracting is defined as a project delivery method in which the contract is a requirements contract for indefinite quantities of construction and the construction to be performed is specified in the job orders issued during the contract. (A.R.S. § 34-101).

 

The fiscal impact to the state General Fund associated with this legislation would depend on the amount of monies collected from increasing the civil penalty for a knowing violation of construction services procurement requirements.

 

 

Provisions

 

1.      Extends, retroactive to June 30, 2018, the time period from June 30, 2018 to June 30, 2025 in which an agent is allowed to procure any construction-manager-at-risk construction services for horizontal construction projects for which all of the following apply:

a) the contract for the project is a single contract for horizontal construction in which FAA or FTA are used as a source for monies;

b) price competition is required by the funding agency or federal law; and

c) the agent is a city with a population greater than 1,000,000 persons or a separate legal entity formed by an intergovernmental agreement that is a sub grantee to the city.

 

2.      Extends, from June 30, 2020 to June 30, 2025, the time period in which an agent is allowed to procure any horizontal construction using APDM project delivery methods.

 

3.      Increases, from $250,000 to $500,000, the threshold for contract amounts that determines whether an architect must be procured using either:

a) for contracts less than $500,000, direct selection, public competition or selection committee procurement methods; or

b) for contracts more than $500,000, construction-manager-at-risk, design-build or job-order-contracting procurement methods.

 

4.      Reestablishes the civil penalty for knowingly and intentionally violating requirements relating to the procurement of construction services as follows:

a) $10,000 for a first violation;

b) $25,000 for a second violation; and

c) $75,000 for a third violation.

 

5.      Makes technical and conforming changes.

 

6.      Becomes effective on the general effective date, with a retroactive provision as noted.

 

House Action

 

GOV               2/15/18            DP       7-0-0-1

3rd Read          2/21/18                        60-0-0

 

Prepared by Senate Research

March 5, 2018

JO/ZD/lat