Developments in Federal Design-Build Legislation and Regulation

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Developments in Federal Design-Build Legislation and Regulation

by Louis J. Jenny  |  June 1, 2016

We’ve had some movement on a few fronts with DBIA’s efforts to improve design-build procedures in federal projects.  Since our successes in 2014 and 2015 on encouraging better use of two-step design-build selection procedures (more on that later), we’ve shifted our focus in Congress to putting a dollar ceiling on one-step/turnkey design-build contracts.  The idea being that it should only be used for simple projects that don’t require much design work.

On May 11, Congressman Mark Meadows (R-NC) introduced H.R. 5199, the U.S. House of Representatives’ version of the Construction Consensus Procurement Improvement Act, a bill supported by a broad coalition of A/E/C organizations, including DBIA.  As introduced, this bill contained a $750,000 ceiling on one-step/turnkey design-build for civil projects.  The plan is to expand the scope of the bill to include defense projects either later in the legislative process or during implementation, which has worked in the past.

Then on May 17, H.R. 5199 was promptly considered and passed by the House Committee on Oversight & Government Reform.  The ceiling, however, was raised to $3 million due to an amendment offered by Congressman Stephen Lynch (D-MA).   It is now ready for consideration by the full House, but that has not been scheduled yet.

This action on H.R. 5199 follows Senate action on the same bill this past March.  Similarly, the Senate bill, S. 1526, was considered and passed by committee and is ready for action by the full Senate.  The only discrepancy in the bill is that the ceiling in the Senate bill remains at $750,000.  This difference will have to be resolved before final passage.  DBIA and the coalition prefer the lower number.

On another front, the final regulations were issued on legislation we supported that was placed in the FY 2015 Defense Authorization bill, encouraging the defense department to limit the short-list to five finalists in the two-step process. When this legislation passed in 2014 it was limited to defense contracts. However, during the rulemaking process last year, the language was expanded to include civil contracts.

The final FAR language is as follows and will go into effect June 15.  The part in italics was added.

FAR 36.303-1 Phase One.

(a)

(4) A statement of the maximum number of offerors that will be selected to submit phase-two proposals. The maximum number specified in the solicitation shall not exceed five unless the contracting officer determines, for that particular solicitation, that a number greater than five is in the Governments interest and is consistent with the purposes and objectives of the two-phase design-build contracting selection procedures. The contracting officer shall document this determination in the contract file. For acquisitions greater than $4 million, the determination shall be approved by the head of the contracting activity, delegable to a level no lower than the senior contracting official within the contracting activity. In civilian agencies, for this paragraph (a)(4), the senior contracting official is the advocate for competition for the procuring activity, unless the agency designates a different position in agency procedures. The approval shall be documented in the contract file.

And as if that wasn’t enough, Congressman Sam Graves (R-MO), who has been an important ally in this process, had report language added to the recently passed 2017 House of Representatives Defense Authorization bill that directs the Secretary of Defense to provide the committee a briefing on the implementation of the changes discussed above in the 2015 defense bill (and spelled out in the new FAR language).  Specifically, the report is to include a list of instances when the two-step short list was more than five finalists.  While this is merely a briefing, it sends the signal that Congress is monitoring this issue, and discouraging shortlists of more than five.

We will keep working on these issues and representing the design-build industry’s interests in Washington, so be sure to check back to DesignBuildDoneRight.com for more updates.