SB 781 Modifies provisions relating to construction
Sponsor: Schatz
LR Number: 5032H.04C Fiscal Notes
Committee: Commerce, Consumer Protection, Energy and the Environment
Last Action: 5/13/2016 - H Calendar Senate Bills for Third Reading w/HCS Journal Page:
Title: HCS SCS SB 781 Calendar Position:
Effective Date: August 28, 2016
House Handler: Jones

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Current Bill Summary

HCS/SCS/SB 781 - This act contains provisions relating to construction.


The act creates the construction manager-risk method which political subdivisions are permitted to use when engaging in civil-works projects in excess of $2 million and non-civil works projects in excess of $3 million. When entering into contracts for the services of a construction manager at-risk for such construction projects, political subdivisions are required to follow the procedures set forth in this act.

Political subdivisions are required to select both a construction manager at-risk and an engineer or architect who will prepare the construction documents for the project. The engineer is not permitted to serve as the construction manager at-risk.

Construction managers at-risk are required to publicly advertise and receive bids or proposals from trade contractors or subcontractors. In the event that the political subdivision has a preference for a subcontractor or trade contractor that differs from the construction manager at-risk, the political subdivision is required to compensate the construction manager at-risk by the change in price, time, or guaranteed maximum cost for any additional cost and risk incurred by the construction manager at-risk.

A political subdivision is required to publish a request for proposal or qualifications in a newspaper of general circulation for a period of two weeks prior to opening the submitted proposals or qualifications. Within 45 days, the political subdivision shall evaluate each proposal and interview at least two of the top offerors. The political subdivision is required to select the proposal that offers the best value, as determined by the political subdivision.

This provision does not apply to constitutionally-established metropolitan sewer districts, special charter cities, charter counties, or charter cities that have adopted the construction manager at-risk method via ordinance, rule, or regulation. Moreover, there is a sunset of September 1, 2026 on this provision.

This provision is similar to the truly agreed to and finally passed SS/SCS/HCS/HB 2376 (2016) and SCS/SBs 789 & 595 (2016).

DESIGN-BUILD CONTRACTS - 67.5060 & 227.107

The act further creates new provisions of law relating to design-build contracts entered into between a political subdivision and a design-builder. A design-build contract is one that is entered into for the purpose of furnishing architectural, engineering, and related design services and the labor, materials, supplies, equipment, and other construction services required for a design-build project. Specifically, the act sets forth the process to be followed in requesting proposals for design-build contracts. The political subdivision shall solicit proposals in a three-stage process: Phase I shall be the solicitation of qualifications of the design-build team; Phase II shall be the solicitation of a technical proposal including conceptual design for the project; and Phase III shall be the proposal of the construction cost. Non-civil works projects must be in excess of $7 million. Civil works projects do not have a price threshold.

In addition, this act authorizes any political subdivision to use a design-build contractor for waste water and water treatment projects and prohibits the Department of Economic Development from rejecting waste water or water treatment projects solely for using design-build when disbursing certain grants and loans.

These provisions do not apply to constitutionally-established metropolitan sewer districts, special charter cities, charter counties, or charter cities which have adopted the design-build method via ordinance, rule, or regulation. The provision has a sunset of September 1, 2026.

These provisions are similar to provisions in the truly agreed to and finally passed SS/SCS/HCS/HB 2376 (2016), SCS/SBs 789 & 595 (2016) SCS/HCS/HB 844 (2015), SB 781 (2016), and SB 398 (2015).

In addition, this act removes the July 1, 2018, expiration date on a provision authorizing the State Highways and Transportation Commission to enter into highway design-build project contracts. This provision is identical to a provision in the truly agreed to and finally passed SS/SCS/HCS/HB 2376 (2016).


This act requires the Department of Health and Senior Services to promulgate regulations for the construction and renovation of hospitals that will include standards that reflect the Life Safety Code standards imposed under Medicare. Hospitals shall not be required to meet the standards contained in the Facility Guidelines Institute for the Design and Construction of Health Care Facilities, but any hospital that complies with the 2010 or later version of such guidelines shall not be required to comply with any inconsistent or conflicting regulations.

The Department may waive enforcement of these standards for licensed hospitals if the department determines that: (1) compliance with them would result in unreasonable hardship for the facility and the health and safety of hospital patients would not be compromised by such a waiver; or (2) the hospital used other equivalent standards. Any conflicting regulations promulgated by the Department that are currently in existence and that conflict with the standards promulgated pursuant to this act shall lapse on and after January 1, 2018. Regulations developed pursuant to this act may incorporate by reference later additions or amendments to such rules, regulations, standards, or guidelines as needed to consistently apply current standards of safety and practice.

These provisions are identical to provisions in the truly agreed to and finally passed CCS/HCS/SB 635 (2016), the truly agreed to and finally passed CCS#2/HCS/SS/SB 608 (2016), the truly agreed to and finally passed CCS/HCS/SCS/SB 973 (2016), SCS/HCS/HB 2402 (2016), and SCS/HCS/HB 2376 (2016) and similar to SB 1052 (2016).