The Texas Department of Transportations adopts amendments to §9.31, §9.38, and §9.40, the repeal of §§9.33-9.37 and §9.39, and new §§9.33-9.37, §9.39, and §§9.41-9.43 concerning contracts for architectural and engineering services. The amendments to §9.38 and new §§9.33-9.35, §9.37, and §§9.41-9.43 are adopted with changes to the proposed text as published in the October 11, 1996, issue of the Texas Register (21 TexReg 9800). The amendments to §9.31 and §9.40, the repeal of §§9.33-9.37 and §9.39, and new §9.36, §9.38, and §9.39 are adopted without changes and will not be republished.

The amendments to §9.31 and §9.38 are necessary to gather the preliminary database information necessary to implement the precertification and selection processes provided by new §§9.33-9.37, §9.39, and §§9.41-9.43 which will be implemented on April 1, 1997. The new processes will provide a more streamlined, cost efficient, and expeditious selection process for architects and engineers by creating a precertification process for architects and engineers and their related subproviders, defining a selection procedure, utilizing data obtained during precertification, and establishing a contract evaluation system.

The amendments to §9.40 provide participation goals for Disadvantaged Business Enterprises (DBES) and for Historically Underutilized Businesses (HUBS).

The amendments to §9.31, §9.38, and §9.40 are effective 20 days after filing their final adoption with the Texas Register. The repeal of §§9.33-9.37 and §9.39, and new §§9.33-9.37, §9.39, and §§9.41-9.43 are effective April 1, 1997.

Amended §9.31 provides definitions for the words, terms, and acronyms used in this subchapter.

New §9.33 establishes requirements for notice and letter of interest; adds contract or request for proposal number, work category codes, and type of selection to the notice; provides that notices filed by the department be considered as posted; and removes the requirement to publish notices in the newspapers.

New §9.34 specifies the composition of the Consultant Selection Team, which is responsible for selection evaluation; identifies the long list evaluation criteria; defines the selection process for the short list; and provides for notification of all firms submitting a letter of interest that were not selected for the short list.

New §9.35 specifies the purpose of the short list meeting, specifies the contents of the request for proposal, requires written proposals conforming to the format and content specified in the request for proposal, specifies the requirements for receipt of proposals, and provides the proposal evaluation criteria and evaluation scale.

New §9.36 establishes interview requirements, requires interviews with the providers on the short list, and allows telephone interviews at the discretion of the Consultant Selection Team. This section provides for the selection of providers for interview, interview structure, and interview evaluation criteria and evaluation scale.

New §9.37 incorporates the provisions of repealed §9.37, revises the evaluation criteria considered, establishes the final selection process, and provides for the managing officer to submit a recommendation for selection to the Consultant Review Committee for procedural review. If the procedural review is acceptable, the deputy executive director, will concur with the selection. This section provides for publication of the short list and selected providers on an electronic bulletin board; administrative qualification, if not performed prior to selection; and negotiations. This section requires authorization by the managing officer for negotiations to commence with the next ranked provider if negotiations are unsuccessful and clarifies the process for determination of a good faith effort to meet the DBE/HUB goal.

Amended §9.38 creates a provider performance evaluation that can be easily distributed through a computer database and provides for a numerical scoring system for provider performance evaluations.

New §9.39 establishes types of selections performed by the department for architectural and engineering contracts, incorporates the provisions of repealed §9.39, and replaces District Consultant Review Committee with the Consultant Selection Team.

Amended §9.40 changes the department's overall architectural and engineering participation goal for DBES and for HUBS from 30% to a percentage that the department will periodically establish and publish in the Texas Register and other media in order to adjust the goals based on the underutilization of specific groups and to allow flexibility in the DBE and HUB programs based on availability.

New §9.41 provides for the precertification of engineers and architects and their related subproviders, describes the precertification application process, provides publishing annual notice regarding precertification in the Texas Register and on an electronic bulletin board, requires the prime provider and subprovider to be precertified by the deadline for receiving the letter of interest, provides for the creation of the Consultant Certification Information System, and provides an implementation date for use of the Consultant Certification Information System data and precertification selection process. This section provides for provider precertification in multiple technical categories, review for precertification, annual renewal of precertification, and appeal of denial of precertification.

New §9.42 provides for administrative qualification, provides for exceptions to administrative qualification, allows administrative qualification to be performed prior to selection to expedite negotiations upon selection of a provider, requires that administrative qualification be performed prior to contract execution, identifies evaluation factors used in determining administrative qualification, allows the Audit Office to provide financial information to the managing office after final selection, and prohibits consideration of financial information during the selection process.

New §9.43 identifies work groups and categories and qualification requirements by work category.

On October 24, 1996, the department held a public hearing to receive data, comments, views, and testimony concerning the proposed amendments and new sections. Oral comments were submitted on behalf of the Consulting Engineers Council of Texas (CEC). CEC indicated it was in favor of the amendments, repeal, and new sections, but suggested changes. Written comments were submitted by Fittz & Shipman and Hicks and Company indicating that they were partly in favor of the amendments, repeal, and new sections, and partly against the amendments, repeal, and new sections.

Comment: CEC suggested that the time between public notice and receipt of letter of interest in §9.33(a) be extended from ten days to fourteen days to allow time for teaming.

Response: The department concurs with this suggestion and that subsection has been revised accordingly.

Comment: CEC suggested that the letter of interest identified in §9.33(a)(1) include a general description of the project and a general description of the work to be done by the provider, in addition to the list of required work categories. Response: The department concurs with this suggestion and has revised that paragraph.

Comment: CEC recommended that the notice requesting letters of interest in §9.33(a)(1) should not be considered as posted if it failed to appear in the Texas Register.

Response: The department files notices for publication in the Texas Register, which another state agency is responsible for publishing. Notices are also published on an electronic bulletin board. Combined with other sources, this is sufficient notice, particularly since the time between the notice publication and the deadline for the letter of interest is being extended, thus allowing the department time to file another notice to be published in the Texas Register prior to the deadline.

Comment: CEC questioned whether it was the intent in §9.33(b) that any letter of interest including a subprovider that is not precertified would be considered nonresponsive, and if so, would any fast track process for precertification be available. Response: The prime providers and subproviders are required to be precertified in any category of work that is identified in §9.43, by the deadline for receipt of the letter of interest. Complete precertification questionnaires received more than 60 days after the implementation date will be reviewed and a determination of precertification status made within 30 days of receipt.

Comment: CEC suggested that §9.35 should specify that the managing office be allowed to omit the written RFP and proceed directly to the interview stage in certain sensitive situations such as small projects.

Response: The department requires a written proposal. The proposal length may be adjusted accordingly for project size and/or complexity.

Comment: CEC suggested that §9.35(a) should include mailing the RFP packet to the short-listed providers prior to the short list meeting to allow adequate time to prepare questions.

Response: The department concurs with providing the RFP prior to the meeting and has revised that subsection to reflect this.

Comment: CEC commented on the scoring system identified in §9.35(e)-(f) and §9.35(c)-(d). CEC suggested a differentiated approach which might include weighting of criteria and greater differentiation in scoring, and could be tailored to the project at hand.

Response: The department is committed to the objective scoring system. The differentiation in §9.35(f) is sufficient for the short list meeting, proposal and evaluation stage. However, the department will use weighting factors in the selection phase. Section 9.37 is revised to clarify this.

Comment: In §9.37(e)(2), concerning the notification of the short-listed providers, CEC recommended that the final ranking order be included to assist the providers in preparation in the event that negotiations are required with alternative providers.

Response: The department will include the ranking in the notification.

Comment: In §9.37(f), regarding negotiations, CEC suggested the inclusion of a reference to the scoping meeting to be held after selection and prior to negotiation to discuss detailed requirements.

Response: This type of meeting is applicable to project specific contracts, and will not be required of every contract procured under these rules. These optional meetings will be adequately addressed in the procedure manual.

Comment: Fittz and Shipman commented that the wording of §9.37 may limit the possibility of selecting smaller local engineering firms because it does not consider current dollar volume with the department. It suggested that a dollar cap be placed on actual contracts.

Response: The department does not have the authority to give preference to local firms. Under the law, the department must select consultants based on qualifications, knowledge, and ability to perform the prescribed work without regard to the size or location of the firm.

Comment: CEC suggested §9.43 specify that only employees of a firm be submitted to precertify a firm.

Response: The department requires that the firm employ personnel with specific qualifications to be precertified in a category. The following statement will be added to the section to clarify this: "A firm may only use an individual who is employed by that firm at the time of submittal for prequalification."

Comment: CEC suggested that the term "environmental" be deleted from the term "environmental engineering" in §9.43(b)(2), since this term has been used in the past to refer to the design of sewerage and water supply systems.

Response: The department supports the use of this term in reference to environmental studies, but for clarity, will replace "environmental" with "civil or environmental".

Comment: CEC stated that §9.43(b)(2)(E) was specific to the Edwards Aquifer region, relating to compliance with TNRCC rules, and suggested that precertification category 2.5.1 be split into two parts, one for the Edwards Aquifer area and one for the remainder of the state.

Response: This is adequately addressed because counties outside the Edwards Aquifer region are not subject to TNRCC rules concerning the Edwards Aquifer.

Comment: CEC recommended that §9.43(b)(2)(L)(i) be revised by adding engineering and planning degrees to the current degrees.

Response: The department concurs with this suggestion, and the subparagraph has been revised to include urban planning and related engineering fields.

Comment: CEC recommended that §9.43(b)(2)(N) also include persons with a bachelor's degree in engineering or planning with the specified knowledge and experience.

Response: The paragraph presently includes a bachelor's degree in urban planning and environmental engineering. Civil engineering has been added.

Comment: CEC observed that few projects result in the requirements of an EIS, and suggested that §9.43(b)(2)(N)(iii) either be deleted, or a separate precertification category created for EIS preparation.

Response: The department's intent was to require that a firm employ at least one individual with experience in the preparation of an EIS. The department has determined that this should be maintained as a minimum.

Comment: Hicks and Company commented that §9.38(a)(2) limits the ability of minority firms to use subcontractors and suggested that DBE participation only be calculated on the labor costs of DBE providers.

Response: The intent of this paragraph is to prohibit DBE/HUB primes or subprimes that are utilized to meet the goal, from subcontracting out to another firm. If a portion of the DBE/HUB contract is subcontracted, it cannot be used to fulfill the goal. The DBE/HUB program is not limited to labor. Participation is calculated by taking the whole contract into consideration.

Comment: Hicks and Company commented on the elimination of 30% participation goals in §9.40 and recommended that availability be based on the statewide availability of DBE/HUB firms, so that "availability" will not be construed to mean local availability.

Response: The department's Business Opportunity Programs Office (BOP) is proposing rules for establishment of DBE/HUB participation goals. It is the intent of this wording to bring participation goals into compliance with BOP's new rules. The goals will be established periodically.

Comment: Hicks and Company asked for more detail concerning the ineligibility period of prime or subprime providers that do not renew applications within the specified time.

Response: A firm that allows their precertification to lapse would be able to submit anytime during the year for consideration for the next precertification.

Comment: Hicks and Company requested that precertification requirements be established for non-engineering firms in the area of transportation systems planning in §9.43.

Response: These sections are limited to the selection for engineering and architectural services and their related sub-providers.

Section 9.34(a)(3) relating to the composition of the Consultant Selection Team (CST), has been revised to reduce the number of department employees from two to one in order to provide an odd number of team members to prevent tie scoring.

Section 9.35(b)(5) has been revised to include proposed method of payment which was inadvertently omitted from the proposed version, causing numbers (5) through (10) to be renumbered (6) through (11).

Section 9.35(f), relating to proposal evaluation scale, has been revised to clarify the CST will assign a numerical value to each evaluation criteria.

Section 9.37(a) has been revised to clarify that the Consultant Review Committee (CRC) will establish weighting factors for each evaluation criterion by the CST.

Section 9.37(f)(1) has been revised to change the phrase "submit the information requested in the contract" to "submit the information required for the contract" to clarify the information needed. The statement that state funded architectural contracts are based on a percentage of construction cost as provided in the General Appropriations Act, has been included to clarify state funded architectural contracts do not require contract negotiations.

Section 9.38(g) has been revised to clarify the district, division, or special office will evaluate the provider's performance in the categories of management cost administration, quality, timeliness, and constructability.

Section 9.41(h) has been revised to clarify a prime provider or subprovider failing to submit an application for renewal will be ineligible to submit a letter of interest for new contracts until they are precertified.

Section 9.42(a) has been revised to include exceptions from administrative qualification for Group 14 - geotechnical services, Group 15 - surveying and mapping, and/or Group 16 - architecture. Percent of construction has excluded from the requirement of administrative qualification.

Section 9.42(b) has been revised to include the complete Texas Department of Transportation's Audit office address.

Section 9.42(c)(2) has been revised to clarify the reference from "annual overhead audit" to "overhead rate audit" throughout this section to provide accurate terminology.

Section 9.42(c)(2)(D) has been revised to clarify that the department's policy concerning contracting with a provider lacking an approved overhead rate audit if specified requirements are met also applies to subproviders.

Section 9.42(d) has been revised to change the wording "financial information" to "administrative qualification information" for accuracy. The term "engineer" has been changed to "provider". A reference to §9.37 has been included.

Section 9.42(e) has been revised to change the phrase "Financial information will not be made available to the CST prior to contract selection" to "Administrative qualification information obtained through §9.42 will not be made available to the CST by the Audit Office prior to contract selection" to clarify the origination of the information.

Section 9.43(b)(1)(F)(i) and (iii) have been revised by deleting "social" and adding "urban planning" to more clearly define the qualifications.

Section 9.43(b)(1)(F)(ii) has been revised to replace the word "and" by "or" for the types of degree's accepted in subparagraph (ii), and the word "and" deleted from the end of the paragraph because either physical or a natural science degree will suffice as a qualification.

Section 9.43(b)(2)(C)-(D) have been revised to correct the title from United States Corps to United States Army Corps.

Section 9.43(b)(2)(E)(i) has been revised to include environmental studies, civil or environmental engineering to more clearly define the qualifications.

Section 9.43(b)(2)(H) has been revised to include the origination date of the national Historic Preservation Act of 1966, as amended.

Section 9.43(b)(2)(I)(ii) has been revised to include a minimum of one year of full-time experience managing historic preservation projects to more clearly define the qualifications.

Section 9.43(b)(2)(L)(i) has been revised to include urban planning or a related engineering field to the other degrees or educational requirements to provide a broader range of professions applicable to the environmental justice areas.

Section 9.43(b)(2)(N)(i) has been revised to include civil engineering to the other degrees or educational requirements. This degree was inadvertently left out of the proposed version and will allow a broader range of professions.

Section 9.43(b)(8)(B)(ii) has been corrected to clarify the demonstrated experience is in electrical engineering and the National Electric Code.