By G. William Quatman, DBIA, Esq.[1] | June 20, 2016
It has been said that you should never watch sausage or legislation being made. President Calvin Coolidge also once said, “Nothing in this world can take the place of persistence.” These observations have been particularly true in recent years with regard to design-build legislation in the state of Missouri. For two decades, Missouri has tried and failed to pass broad legislation that authorizes use of design-build on state and local projects. Small bites have been taken out of the legal prohibitions over time, but a large gap remained in the public procurement arena. Public owners have wanted to bring the “Show Me State” in line with the rest of the nation in innovative construction delivery systems. That finally happened on May 13, 2016 with the overwhelming passage of HB 2376. The behind-the-scenes story shows the value of persistence.
Years of Struggling and Getting Close. The saga began more than twenty years ago in 1995, when the Missouri State Division of Design and Construction short-listed five design-build teams for a $48 million 1,200-bed prison in Cameron, Missouri. The low bidder sued for an injunction against the project, arguing that the state could not use design-build without awarding to the low bidder. The suit was voluntarily dismissed and the prison was built, but in order to avoid future such challenges, the Division introduced legislation from 1997 to 2000 to hire design-builders on a combined criteria of qualifications and price. That effort met with opposition each year from design and construction groups. Failing to get express authority in the legislature, the agency adopted administrative regulations in June 2008 that permitted the use of alternative project delivery methods, including design-build. The regulations have been widely used.
On the transportation side, MoDOT obtained legislative permission to use design-build on just three contracts in 2002, when HB 1196 was passed. For the three “contracts,” MoDOT selected one bridge in Kansas City, one in St. Louis, and a mega-bridge package of 554 bridges across the state (the Safe and Sound Bridge Project). In 2009, MoDOT’s authority was expanded from just three design-build contracts to 2% percent of the total number of all state highway system projects listed in the MoDOT approved statewide transportation improvement agenda for each fiscal year.
School districts attempted to get legislative approval to use design-build in 2008, 2009 and 2010, but met with opposition each year. In 2011, however, the St. Louis Metropolitan Sewer District was successful in getting special legislation passed to use design-build only for that district. That law permits that sewer district to enter into design-build contracts only for projects that exceed $1 million.
Proponents for use of design-build by other political subdivisions began their efforts in 2012 in Jefferson City by introducing HB 1788, which failed. Bills were introduced each successive year until 2015, when HB 844 passed the House by a vote of 111 to 45 before dying in the final days of the session. This paved the way to the successful passage in 2016 of HB 2376, however.
All Things Come To Him Who Waits. The legislative session of 2016 saw a total of six bills introduced to permit design-build for political subdivisions or water districts. HB 2376 passed by votes of 147-5 in the House and 31-0 in the Senate and was signed by the Governor on July 1. It permits use of construction management-at-risk and design-build by Missouri “political subdivisions.” The term “political subdivision” has been defined by the Missouri Supreme Court as “a broad umbrella category that includes all of the differing definitions of ‘political subdivisions’ under its cover.” Case law, statutes and the Missouri Constitution include under this umbrella: counties, townships, municipalities, cities, towns, villages, school district, road district, drainage, sewer and levee districts, a county sports complex authority, among others. For civil works projects (normally designed by engineers), there is no dollar threshold on use of design-build; however, for architectural projects, the new law only applies to projects over $7 million.
The new law does not affect “home rule” cities, such as Kansas City and St. Louis, nor the four home-rule charter counties of Jackson, St. Charles, Jefferson, and St. Louis, all of which can adopt design-build by local ordinance. St. Louis County has used design-build to renovate the County Courts Building in Clayton, Missouri and Kansas City has successfully used design-build for a police station and several fire stations, as well as exterior renovation of the historic Municipal Auditorium and the award-winning Liberty Memorial Restoration and World War I Museum.
The wait has been long, but Missouri finally joins most of the rest of the nation in permitting local use of alternative ways of delivering public construction projects. The new law sunsets in the year 2026.
[1] Bill Quatman is currently Chairman of the Design-Build Institute of America’s National Board of Directors, and is a past two-time national chair of DBIA’s Legislative/Legal Committee. He is the general counsel for Burns & McDonnell Engineering Company, Inc. in Kansas City.