Municipal Design-Build Authorization Act Effective January 1, 2024
Sep 28, 2023
The Illinois General Assembly recently enacted the Municipal Design-Build Authorization Act (the “Act”) which allows municipalities and school districts to enter into design-build contracts, and significantly expands how these public entities can procure and structure construction projects. The Act goes into effect on January 1, 2024.
Currently, municipalities and school districts utilize a traditional “design-bid-build” project delivery method which requires them to procure and contract with two separate design and construction firms. The public body selects an architect in accordance with the Local Government Professional Services Selection Act, 50 ILCS 510/1, et seq., and then bids the public construction work pursuant to the bidding requirements in the School Code (105 ILCS 5/10-20.21) and the Municipal Code (65 ILCS 5/8-9-1). While the “design-bid-build” project delivery method still has many benefits, the Act’s allowance of “design-build” contracts is intended “to increase the efficiency and effectiveness of delivering public projects” which occurs from having one entity responsible for both the design and construction.
The Act defines “design-build” as “a delivery system that provides responsibility within a single contract for the furnishing of architecture, engineering, land surveying, and related services, as required, and the labor, materials, equipment, and other construction services for the project.” 65 ILCS 5/11-39.2-10 and 105 ILCS 5/15A-10. The design-build delivery method allows a project owner to enter into a single agreement with the design-build entity that covers both the design and construction phases of a contract. In addition to the efficiency of having a single contract, owners may realize construction costs savings and more efficient communications because the design-build process allows reduces the number of parties involved in the design, planning, and building process.
While traditional bidding requirements are not applicable for these design-build contracts, the Act sets forth strict requirements for the solicitation of proposals. Specifically, the Act establishes procedural requirements as to the notice of intent to receive proposal for a project, the request for proposal, the date the proposals are due, and performance criteria. Further, in developing the project scope and performance criteria, the Act requires that the municipality or school district use a licensed design firm or public art designer for a variety of tasks including writing the scope and performance criteria, and evaluating compliance with those criteria. Thus, municipalities and school districts should be aware that the requirements for soliciting proposals may be time and labor intensive.
Subsequently, once proposals are received, the Act sets forth a strict two-phase selection process. In Phase I, the municipality or school district must evaluate and shortlist the proposers based on their qualifications, and in Phase II, the municipality or school district must evaluate the technical and cost proposals. The Act provides clear criteria and requirements for municipalities and school districts in establishing the scope and performance criteria for design-build contracts and procedures for awarding contracts. It is worth noting that the total project cost may not be weighted at more than thirty percent (30%) of the weighted criteria. The Act also establishes that the two-phase selection process can be combined into one if the total overall cost of a project is estimated to be less than $12,000,000.00.
Finally, once the highest overall ranked proposal is determined, the municipality or school district may award the contract to that entity. The Act requires that at the end of every six-month period, the selected proposer shall submit a report detailing its compliance with the utilization goals for businesses established under the Business Enterprise for Minorities, Women, and Persons with Disabilities Act and provisions of the Illinois Human Rights Act.
The Act provides municipalities and school districts with new abilities and approaches to public construction projects. However, given the various procedural requirements and risk involved with any construction project, municipalities and school districts should work with legal counsel to comply with the procurement requirements and develop a contract that meets the public owner’s expectations and limits risk and liability. For more information, please contact any Robbins Schwartz Attorney.