LRB-2322/2
JTK:kjf:ph
2011 - 2012 LEGISLATURE
January 5, 2012 - Introduced by Senators Wanggaard, Zipperer and Taylor,
cosponsored by Representatives
Strachota, Spanbauer and Endsley.
Referred to Committee on Judiciary, Utilities, Commerce, and Government
Operations.
SB366,1,4
1An Act to amend 16.855 (1), 16.855 (2) (intro.), 16.855 (13) (a), 16.855 (14) (a)
2and 16.855 (15); and
to create 16.855 (14) (ae) and 16.855 (14) (am) to (aq) of
3the statutes;
relating to: state building contracting and construction
4procedures and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill makes changes in state building contracting and construction
procedures.
Currently, with certain exceptions, contracts for construction work on state
construction projects that cost more than $50,000 must be let by contract to the
lowest responsible bidder and must be preceded by public notice and a public bidding
process. Wisconsin-based bidders are accorded a preference over bidders whose
home governments grant them a preference in making governmental purchases.
With certain exceptions, if bids are required to be solicited and the estimated cost of
a project exceeds $185,000, the Department of Administration (DOA) must solicit
single and separate bids on each portion of the work that DOA designates. DOA must
attempt to ensure that 5 percent of the total amount expended for construction work
in each fiscal year is awarded to minority-owned businesses. Contractors must be
granted certain progress payments while a project is underway. With certain
exceptions, if the estimated cost of a project exceeds $185,000, the project is subject
to approval of the Building Commission.
The bill permits DOA either to: 1) solicit both single and separate bids on any
division of the work it designates; or 2) solicit only single bids on all divisions of the
work that DOA designates. The bill also permits DOA to utilize another contracting
procedure to construct any project called "construction-manager-at-risk
contracting." Under the construction-manager-at-risk contracting procedure,
DOA hires a construction manager to provide preconstruction services and to
manage the construction process. The construction manager must solicit bids for all
work on a project unless the manager submits a bid for a portion of the work. The
bill also requires the construction manager to award all contracts to the lowest
qualified responsible bidder unless the construction manager and DOA agree that
it is in the best interest of the state to contract with a subcontractor other than the
lowest bidder. In addition, the bill requires the construction manager to submit
progress payment requests to DOA, to pay each subcontractor the amount to which
the subcontractor is entitled within seven days after the prime contractor receives
payment for work performed, and to limit the amount of any retainage to the
proportionate share of the retainage that is attributable to the subcontractor's
division of the work. The bill also permits DOA to prescribe, by rule, additional
contracting procedures not specified in current law or in the bill that DOA may
utilize for any project.
The bill provides the following when DOA uses a contracting procedure in
which it solicits only single bids on all divisions of the work on a project (single prime
contracting): 1) the prime contractor must submit to DOA the names of the
subcontractors that are proposed to be retained; 2) DOA must require the prime
contractor to solicit bids from subcontractors who will perform any division of the
work on the project designated by DOA and to award each subcontract to the lowest
qualified responsible bidder; 3) the prime contractor must submit progress payment
requests to DOA and must pay the subcontractors for their proportionate share of the
work within seven days after a payment is received from DOA; and 4) retainages
from subcontractors must be limited to their proportionate share of the work. In
addition, the bill provides that when DOA uses the single prime contracting
procedure to construct a project, DOA must ensure that each subcontractor has
access to the elements of the project information available to the prime contractor
that are required for the subcontractor to effectively participate in the project.
Under all of the proposed new contracting procedures, as well as any other
procedures prescribed by DOA, DOA must advertise for and solicit bids on all or any
portion of the work it designates and comply with all other laws governing
construction procedures, except that DOA may provide, by rule, that any of these
laws do not apply to a specific project that is constructed using the
construction-manager-at-risk procedure, and except that, as currently provided,
the Building Commission may waive compliance with any of these laws for
construction of a specific project.
Currently, with certain exceptions, a bidder on a contract for a state project
need not submit with its bid a list of the subcontractors to be used on the project, but
DOA may require a list of the subcontractors to be submitted before the contract is
awarded. This bill permits DOA to require each bidder on a state project to submit
with its bid a list of its subcontractors to be used on the project. The bill also directs
DOA to require each bidder to solicit bids from subcontractors who will perform any
division of the work on a project designated by DOA and to award each subcontract
to the lowest qualified responsible bidder.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB366,3,133
16.855
(1) The department shall let by contract to the lowest qualified
4responsible bidder all construction work when the estimated construction cost of the
5project exceeds $50,000, except for construction work authorized under s. 16.858 and
6except as provided in sub. (10m)
or (14) (am) or s. 13.48 (19). If a bidder is not a
7Wisconsin firm and the department determines that the state, foreign nation or
8subdivision thereof in which the bidder is domiciled grants a preference to bidders
9domiciled in that state, nation or subdivision in making governmental purchases,
10the department shall give a preference over that bidder to Wisconsin firms, if any,
11when awarding the contract, in the absence of compelling reasons to the contrary.
12The department may enter into agreements with states, foreign nations and
13subdivisions thereof for the purpose of implementing this subsection.
SB366,3,1916
16.855
(2) (intro.) Except
as provided in subs. (10) and (14) (ae), (am), and (ao)
17and except for projects authorized under s. 16.858, whenever the estimated
18construction cost of a project exceeds $50,000, or if less and in the best interest of the
19state, the department shall:
SB366, s. 3
20Section
3. 16.855 (13) (a) of the statutes is amended to read:
SB366,4,9
116.855
(13) (a)
A The department may require each bidder to submit a list of
2the major subcontractors
shall not be required to be submitted, as designated by the
3department in its solicitation documents, for work to be performed with the
bidder's 4bid.
The Except as provided in sub. (14) (ae) 2., the department may
also require
the 5each prime contractor to submit in writing the names of prospective subcontractors
6for the department's approval before the award of a contract to the prime contractor.
7The department shall require each bidder to solicit bids from subcontractors who will
8perform any division of the work on a project designated by the department and to
9award each subcontract to the lowest qualified responsible bidder.
SB366, s. 4
10Section
4. 16.855 (14) (a) of the statutes is amended to read:
SB366,4,2211
16.855
(14) (a) If a project requires prior approval of the building commission
12under s. 13.48 (10) (a)
and or bids are required to be solicited under sub. (2), the
13department
shall take may solicit both single bids and separate bids on any division
14of the work that it designates
. If a project does not require prior approval of the
15building commission under s. 13.48 (10) (a) and bids are required to be solicited under
16sub. (2), the department may take single bids or separate bids on any division of the
17work that it designates or may solicit only single bids on all divisions of the work.
18If the department awards contracts by the division of work, the department shall
19award the contracts according to the division of work selected for bidding. Except
20as provided in
pars. (am) and (ao) and sub. (10m) (am), the department shall award
21all contracts to the lowest qualified responsible bidder or bidders that result in the
22lowest total construction cost for the project.
SB366, s. 5
23Section
5. 16.855 (14) (ae) of the statutes is created to read:
SB366,4,2424
16.855
(14) (ae) 1. In this paragraph:
SB366,5,3
1a. "Base bid" means the bid of a prime contractor for all work to be performed
2on a project submitted in accordance with the solicitation, excluding any alternatives
3or options.
SB366,5,54
b. "Single prime contracting" means a contracting procedure in which the
5department solicits only single bids on all divisions of the work on a project.
SB366,5,86
2. If the department elects to use single prime contracting for the construction
7of a project, the department shall set forth the divisions of the work in the
8solicitation. The department shall also enforce the following requirements:
SB366,5,159
a. Each bidder shall submit in writing the names of the subcontractors who are
10proposed to be retained to perform services required under the base bid for each
11division of the work specified by the department together with the amount to be paid
12by the prime contractor to each subcontractor. No modification may be made in the
13submission unless the department permits a modification. The department may
14permit a modification after the opening of bids but prior to execution of the contract
15with the prime contractor.
SB366,5,1916
b. The prime contractor shall submit progress payment requests to the
17department for each period designated by the department and upon receiving each
18progress payment shall pay each subcontractor for its division of the work in
19accordance with s. 16.528 (2m).
SB366,5,2220
c. In making payments to each subcontractor, the prime contractor shall limit
21the amount of any retainage to the proportionate share of the retainage under sub.
22(19) that is attributable to the subcontractor's division of the work.
SB366,6,223
d. The prime contractor shall pay each subcontractor no later than 7 days after
24the prime contractor receives payment the amount to which the subcontractor is
1entitled, including any retainage, when the work contracted to that subcontractor is
2completed to the satisfaction of the department.
SB366,6,63
3. If the department elects to use single prime contracting for the construction
4of a project, the department shall ensure that each subcontractor has access to the
5elements of the project information available to the prime contractor that are
6required for the subcontractor to effectively participate in execution of the project.
SB366, s. 6
7Section
6. 16.855 (14) (am) to (aq) of the statutes are created to read:
SB366,6,168
16.855
(14) (am) 1. In this paragraph, "construction-manager-at-risk
9contracting" means a contracting procedure in which a person is selected by the
10department to act as a construction manager for a project; to provide preconstruction
11services during the design phase of the project; and to manage the construction
12process, which includes, but is not limited to, supervision of public notice and bidding
13for construction work on the project, contracting for construction work required to
14be performed on the project, compliance with all terms and conditions of applicable
15collective bargaining agreements, if any, and assumption of responsibility for the
16project's cost, completion schedule, and workmanship of construction.
SB366,6,2317
2. As an alternative to the procedures under par. (a), the department may
18utilize construction-manager-at-risk contracting to construct a project. The
19department shall prescribe, by rule, the specific procedures to be used by the
20department for projects constructed using construction-manager-at-risk
21contracting. A rule promulgated under this subdivision may provide that any
22provision of this section does not apply to a project constructed in accordance with
23the procedures prescribed in the rule.
SB366,7,524
3. When the department elects to utilize construction-manager-at-risk
25contracting to construct a project, the construction manager shall solicit bids on all
1work on the project in the manner prescribed under this subsection unless the
2construction manager elects to submit a bid to perform a portion of the work. In that
3case, the department shall solicit bids for that portion of the work in accordance with
4procedures prescribed by rule. The department shall also enforce the following
5requirements:
SB366,7,96
a. Within a reasonable time after the construction manager receives bids, the
7construction manager shall provide tabulations of all bids received and subcontract
8award results to the department and the department shall make the tabulations
9available for public inspection.
SB366,7,1310
b. The construction manager shall award all contracts to the lowest qualified
11responsible bidder unless the construction manager recommends to the department
12and the department concurs that it is in the best interest of the state to contract with
13a subcontractor other than the lowest bidder.
SB366,7,1514
c. The construction manager shall provide subcontract forms of agreement with
15the bidding documents.
SB366,7,1916
d. The construction manager shall submit progress payment requests to the
17department for each period designated by the department and upon receiving each
18progress payment shall pay each subcontractor for its division of the work in
19accordance with s. 16.528 (2m).
SB366,7,2220
e. In making payments to each subcontractor, the construction manager shall
21limit the amount of any retainage to the proportionate share of the retainage under
22sub. (19) that is attributable to the subcontractor's division of the work.
SB366,8,223
f. The construction manager shall pay each subcontractor no later than 7 days
24after the prime contractor receives payment the amount to which the subcontractor
1is entitled, including any retainage, when the work contracted is completed to the
2satisfaction of the department.
SB366,8,53
(an) The department may prescribe, by rule, additional contracting procedures
4not enumerated in this subsection that the department may utilize to construct any
5project that requires approval of the building commission under s. 13.48 (10) (a).
SB366,8,96
(ao) On any project constructed under a procedure identified in or prescribed
7under par. (ae), (am), or (an), the department shall comply with all provisions of this
8section unless the building commission waives compliance under s. 13.48 (19), or a
9rule promulgated under par. (am) provides for an alternative procedure.
SB366,8,1010
(ap) The department shall define, by rule:
SB366,8,1411
1. Any specific contracting procedures not specified in par. (ae) that prime
12contractors must use when the department elects under par. (a) to solicit only single
13bids on all divisions of the work on a project to provide protections to major
14subcontractors.
SB366,8,1715
2. The specific contracting procedures identified in or authorized to be
16prescribed under pars. (am) and (an) and how they will be applied to construction
17projects.
SB366,8,1918
3. The criteria that will be applied to the selection of the contracting procedure
19that will be utilized by the department on a particular project.
SB366,8,2220
4. The selection process that the department will use to select a contractor for
21any contracting procedure to be utilized on a project other than the procedures
22identified in par. (a).
