SB 374

Alternative project delivery methods

This bill authorizes the Department of Transportation and cities, villages,

towns, counties, and technical colleges (governmental units) to use alternate

methods for delivering projects.

Under current law, the design and construction of projects are generally two

distinct phases. Under this method, often referred to as “design-bid-build,”

governmental units have broad authority to accomplish the design of a project. The

construction of a project must be executed by contract based on bids, with a

governmental unit awarding the contract to the lowest responsible bidder.

Under the bill, in addition to the design-bid-build method, governmental units

are authorized to deliver projects with four alternative methods:

1. “Design-build,” in which architectural, surveying, engineering,

construction, and related services for a project are provided by a single contractor.

2. “Design-build-finance,” in which the design and construction services for a

project are provided by a single entity and financing is provided in whole or in part

by the same entity.

3. “Construction manager-general contractor,” a two-phase method in which

all services unrelated to construction are provided in the first phase by a contractor

who, subject to approval by the governmental unit, also provides construction

services in the second phase.

4. “Fixed-price variable-scope," in which a contractor provides the maximum

amount of work at a cost not to exceed the price fixed by the governmental unit.

The bill creates requirements for soliciting and evaluating proposals using

these methods and awarding contracts to the most qualified bidders. The bill

requires DOT to use these methods to deliver not less than 5 percent of construction

costs of improvement projects by June 30, 2019, not less than 10 percent of

construction costs of improvement projects by June 30, 2021, and not less than 20

percent of construction costs of improvement projects by June 30, 2023.

Prevailing wage

The bill eliminates the state prevailing wage law and the highway prevailing

wage law.

Generally, under the current prevailing wage laws, laborers, workers,

mechanics, and truck drivers employed on the site of certain projects of public works

1) must be paid the prevailing wage rate, as determined by the U.S. Department of

Labor under the federal Davis-Bacon Act; and 2) may not be required or permitted

to work a greater number of hours per day and per week than the prevailing hours

of labor, which is no more than 10 hours per day and 40 hours per week, unless they

are paid 1.5 times their basic rate of pay (commonly referred to as overtime pay) for

all hours worked in excess of the prevailing hours of labor. The prevailing wage laws

include two separate laws: one that applies to certain projects of public works to