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(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

LFC Files

Legislative Council Services

State Department of Education (SDE)

NMED Construction Programs Bureau

No comments were received from the General Services Department.

SUMMARY

Synopsis of House Business and Industry Committee Amendment

While the original bill would have removed the limit for use of a design and build project delivery system to projects with more than a $10 million maximum allowable construction cost, the amendment allows this limit to remain but provides an exception for projects under $200.0. If adopted as amended, design and build delivery systems could be used for projects with more than a $10 million maximum allowable construction cost or with a maximum allowable construction cost of $200.0 or less.

Synopsis of Bill

The original bill would have removed limitation of use of a design and build project delivery system to projects with a maximum allowable construction cost of more than $10 million. It also would have exempted design and build projects from various procurement requirements if the projects 1) had a maximum allowable construction cost of $200.0 or less and 2) the only requirement for architects, engineers, landscape architects, or surveyors is limited to either site improvements or adaption for a pre-engineered building or system. The specific procurement requirements which would have been waived include 1) use of a New Mexico registered engineer or architect and New Mexico licensed contractor on the design and build team, 2) a two-phase process for awarding design and build contracts including a request for qualification process followed by a bid process, and 3) regulations promulgated by the General Services Department for procuring a design and build delivery system. In place of these requirements, the bill would require competitive sealed bids to procure design and build services for the exempted projects.

Significant Issues

The intent of this bill is to simplify the procedures required to procure design and build services for smaller (less than $200.0) projects which involve either site improvements or adaption for a pre-engineered building or system. It would also provide greater flexibility in procurement of design and build projects, thereby encouraging their use.

The SDE indicated that the bill could potentially eliminate safeguards provided by a professional designer contracted by a public entity to design and oversee the construction of projects. Removing the requirement for companies to be licensed in New Mexico compromises the ability for a public government entity to have recourse in the event of a project related design or construction problem.

FISCAL IMPLICATIONS

According to SDE, school districts would be vulnerable to poor workmanship and increased costs related to accelerated projects. Recent SDE construction plan approval data indicate that 57 percent of funded projects are in this small improvements category.

It is possible that the bill would reduce the costs of small design and build contracts by reducing the administrative overhead required to complete the bidding process.

ADMINISTRATIVE IMPLICATIONS

According to SDE, school districts would have to monitor both the design and construction more closely to ensure appropriate use of public funds, which could result in the need ro additional staff to supervise projects and to delay of other projects if problems arise during the design and build process.

It is possible that the bill would reduce staff requirements of small design and build contracts by reducing the administrative overhead required to complete the bidding process.

DH/njw