Part 1.
TEXAS DEPARTMENT OF TRANSPORTATION
Chapter 9.
CONTRACT MANAGEMENT
Subchapter B. HIGHWAY IMPROVEMENT CONTRACTS
43 TAC §§9.11, 9.12, 9.15 - 9.17
The Texas Department of Transportation (department) proposes
amendments to §§9.11, 9.12, and 9.15 - 9.17, concerning highway
improvement contracts.
EXPLANATION OF PROPOSED AMENDMENTS
Transportation Code, Chapter 223, Subchapter A, prescribes the method by
which the department receives competitive bids for the improvement of highways
that are a part of the state highway system. Pursuant to this authority, the
Texas Transportation Commission (commission) has previously adopted §§9.10-9.20
to specify the process by which the department will administer and manage
highway improvement contracts.
The amendments to §9.11 add, revise, and renumber accordingly definitions
to provide clarification and better conformity with other existing rules.
It is necessary to amend §9.11 to conform to the department's recently
revised definitions in its Standard Specifications for Construction of Highways,
Streets, and Bridges.
Section 9.12(a)(2)(C)(ii)(I), (II), and (III) are amended by removing the
word "and/or" from each subclause and replacing it with the word "or" to state
that experience in maintenance and construction cannot be combined to meet
the experience requirement.
Section 9.12(a)(2)(C)(ii)(III) is amended to revise a parenthetical reference
to a complete sentence. No substantive change has been made by this amendment.
Section 9.15(b)(1)(D) is revised to provide clarification regarding the
reasons for not reading a proposal due to incorrect submission of the bid.
Section 9.15(b)(1) is further revised with the addition of new subparagraphs
(M) and (N). These two new subparagraphs provide that submitting a bid proposal
with the incorrect number of bid items, or containing more than the maximum
or less than the minimum number of allowable working days shown on the plans
when working days is a bid item will be additional reasons for not accepting
and reading a bid proposal. These revisions are necessary to ensure that the
bids accepted and tabulated adequately address the requirements specified
in the bid advertisement.
Section 9.16(e)(3) is added to put bidders on notice that a bidder’s
attempt to unbalance its bid may negate any claim that the bidder exercised
due care in preparing its bid.
Section 9.17(e) is revised to remove the requirement that the apparent
low bidder concur with the award of a contract where award of the contract
was previously deferred at an earlier commission meeting.
New subsection (g) of §9.17 affords the commission the authority to
cancel the award of any contract prior to contract execution if such cancellation
is determined to be in the best interest of the state. These revisions are
necessary in order to ensure the safety and best interest of the traveling
public are served in the award of highway improvement contracts.
FISCAL NOTE
James Bass, Director, Finance Division, has determined that for each of
the first five years the amendments as proposed are in effect, there will
be no fiscal implications for state or local governments as a result of enforcing
or administering the amendments. There are no anticipated economic costs for
persons required to comply with the sections as proposed.
Thomas R. Bohuslav, P.E., Director, Construction Division has certified
that there will be no significant impact on local economies or overall employment
as a result of enforcing or administering the amendments.
PUBLIC BENEFIT
Mr. Bohuslav has also determined that for each of the first five years
the sections are in effect, the public benefit anticipated as a result of
enforcing or administering the amendments will be to further the department’s
mission to provide an efficient and fair process of administering the award
or rejection of highway improvement contracts, while ensuring the safety and
interest of the traveling public. There will be no adverse economic effect
on small businesses.
SUBMITTAL OF COMMENTS
Written comments on the proposed amendments may be submitted to Thomas
R. Bohuslav, P.E., Director, Construction Division, 125 East 11th Street,
Austin, Texas 78701-2483. The deadline for receipt of comments is 5:00 p.m.
on April 12, 2004.
STATUTORY AUTHORITY
The amendments are proposed under Transportation Code, §201.101, which
provides the commission with the authority to establish rules for the conduct
of the work of the department, and more specifically, Transportation Code, §§223.001-223.013,
which requires the department to competitively bid highway improvement contracts.
CROSS REFERENCE TO STATUTE: None.
§9.11.Definitions.
The following words and terms, when used in this subchapter, shall
have the following meanings, unless the context clearly indicates otherwise.
(1)
Advertisement--The public announcement
required by law inviting bids for work to be performed or materials to be
furnished.
(2)
[
(3)
Apparent low bidder--The bidder
determined to have the numerically lowest total bid as a result of the tabulation
of bids by the department.
(4)
Available bidding capacity--The
contractor's approved bidding capacity less uncompleted work on department
contracts.
(5)
Award--The commission's acceptance
of a contractor's bid for a proposed contract that authorizes the department
to enter into a contract.
[
(6)
[
(7)
Bid bond--The security executed
by the contractor and the surety furnished to the department to guarantee
payment of liquidated damages if the contractor fails to enter into an awarded
contract.
(8)
[
(9)
[
(10)
[
(11)
Certificate of insurance--A
form approved by the department covering insurance requirements stated in
the contract.
(12)
[
(13)
[
(14)
[
(15)
[
(16)
[
(17)
[
(18)
Disadvantaged business enterprise
(DBE)--Has the meaning assigned by §9.51(10) of this chapter (relating
to Definitions).
[
(19)
[
(20)
[
(21)
[
(22)
[
(23)
Historically underutilized
business (HUB)--Has the meaning assigned by §9.51(17) of this chapter.
(24)
Joint venture--Any combination
of individuals, partnerships, limited liability companies, or corporations
submitting a single bid proposal.
(25)
Letting official--The executive
director or any department employee empowered by the executive director to
officially receive bids and close the receipt of bids at a letting.
[
(26)
[
(27)
[
(28)
[
(29)
[
(30)
[
(31)
[
(32)
[
(33)
[
(34)
Small business enterprise
(SBE)--Has the meaning assigned by §9.51(23) of this chapter.
§9.12.Qualification of Bidders.
(a)
Audited financial qualification of construction and maintenance
bidders. Unless waived under paragraph (2) of this subsection, to be eligible
to bid on a construction or maintenance contract a potential bidder must be
prequalified in accordance with paragraph (1) of this subsection.
(1)
(No change.)
(2)
Waiver.
(A) - (B)
(No change.)
(C)
The department will make its examination and determination
based on the information submitted, and advise the bidder of its approved
bidding capacity.
(i)
(No change.)
(ii)
An experienced bidder with sufficient working capital
and financial capability, as determined by the department, will receive a
bidding capacity of:
(I)
$500,000 for a bidder submitting compiled financial information
if the principals of the bidder have at least one year experience in construction
or
[
(II)
$1,000,000 for a bidder submitting compiled financial
information if the principals of the bidder have at least two years experience
in construction
or
[
(III)
over $1,000,000 for a bidder submitting reviewed financial
information if the principals of the bidder have at least two years of experience
in construction
or
[
(b) - (c)
(No change.)
§9.15.Acceptance, Rejection, and Reading of Proposals.
(a)
Public reading. Bids will be opened and read in accordance
with Transportation Code, §223.004 and §223.005. Bids for contracts
with an engineer's estimate of less than $300,000 may be filed with the district
engineer at the headquarters for the district, and opened and read at a public
meeting conducted by the district engineer, or his or her designee on behalf
of the commission.
(b)
Proposals not read.
(1)
The department will not accept and will not read a proposal
if:
(A)
the proposal is submitted by an unqualified bidder;
(B)
the proposal is in a form other than the official proposal
form issued to the bidder;
(C)
the certification and affirmation are not signed;
(D)
the proposal was
not in the hands of the letting official
at the time and location
[
(E)
the bidder modifies the proposal in a manner that alters
the conditions or requirements for work as stated in the proposal;
(F)
the proposal guaranty, when required, does not comply with §9.14(d)
of this title (relating to Submittal of Proposal);
(G)
the bidder did not attend a specified mandatory pre-bid
conference;
(H)
the bid does not include a historically underutilized business
subcontracting plan when required;
(I)
a computer printout proposal, when used, does not have
the unit bid prices entered in designated spaces, is not signed in the name
of the firm or firms to whom the proposal was issued, or omits required bid
items or includes items not shown in the proposal;
(J)
the bidder was not authorized to be issued a proposal under §9.13(e)
of this title (relating to Notice of Letting and Issuance of Proposals);
(K)
the proposal did not otherwise conform with the requirements
of §9.14 of this title; [
(L)
the bidder fails to properly acknowledge receipt of all
addenda
;
[
(M)
the proposal submitted has
the incorrect number of bid items; or
(N)
the bidder bids more than the
maximum or less than the minimum number of allowable working days shown on
the plans when working days is a bid item.
(2)
If more than one proposal involving a bidder under the
same or different names is submitted on the same project, the department will
not accept and will not read any of the proposals submitted by that bidder
for that project.
(c) - (e)
(No change.)
§9.16.Tabulation of Bids.
(a) - (d)
(No change.)
(e)
Bid errors. The commission will consider a bid error that
meets the notification requirements contained in paragraph (1) of this subsection
and satisfies the criteria contained in paragraph (2) of this subsection in
the award of a contract.
(1)
The apparent low bidder must submit written notification
of an alleged bid error to the department's Construction Division within five
business days after the date proposals are opened for the project. The notification
must identify the items of work involved and must include bid documentation,
such as quotes received, calculations made, or other related documentation
used in bid preparation, that substantiates the alleged error. Once the notification
is submitted to the department, it may not be revised or supplemented unless
additional information is requested by the department.
(2)
The commission will consider the following criteria in
determining whether a bid error exists:
(A)
the alleged bid error relates to a material item of work
contained in the bid;
(B)
the alleged bid error is a significant portion of the total
bid as compared to the intended bid contained in the documentation submitted
by the contractor in accordance with paragraph (1) of this subsection, and
other contractor bids;
(C)
the alleged bid error occurred despite the contractor's
exercise of ordinary care in preparing its bid; and
(D)
delay in the completion of the project will not have a
significant impact on the cost to and safety of the public.
(3)
The commission may consider
an alleged bid error caused by an effort to unbalance the bid as failure to
exercise ordinary care.
(4)
[
§9.17.Award of Contract.
(a) - (d)
(No change.)
(e)
When additional information is required to make a final
decision, the commission may defer the award or rejection of the contract
until the next regularly scheduled commission meeting. [
(f)
Contracts with an engineer's estimate of less than $300,000
may be awarded or rejected by the executive director or the director's designee
under the same conditions and limitations as provided in subsections (a)-(c)
of this section.
(g)
The commission may rescind
the award of any contract prior to contract execution upon a determination
that it is in the best interest of the state. In such an instance, the proposal
guaranty will be returned to the bidder. No compensation will be paid to the
bidder as a result of this cancellation.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on February 27, 2004.
TRD-200401560
Richard D. Monroe
General Counsel
Texas Department of Transportation
Earliest possible date of adoption: April 11, 2004
For further information, please call: (512) 463-8630
Subchapter D. MEMORANDUM OF UNDERSTANDING
(1)
] Alternate bid item--A bid
item identified by the department as an acceptable substitute for a regular
bid item.
(2)
Available bidding capacity--
Bidding capacity less uncompleted work under contract.]
(3)
] Bidder--An individual, partnership,
limited liability company, corporation or
joint venture
[
any combination
] submitting a
bid for a proposed contract
[
proposal
].
(4)
] Bid error--A mathematical
mistake by the prime contractor in
the
[
a
] unit bid
price entered in the proposal.
(5)
] Bidding capacity--The maximum
dollar value a contractor may have under contract
with the department
at any given time.
(6)
] Building contract--A contract
entered under Transportation Code, Chapter 223, Subchapter A, or Transportation
Code, §361.231, for the construction or maintenance of a department building
or appurtenant facilities.
Building contracts are considered to be highway
improvement contracts.
(7)
] Certification of Eligibility
Status form--A notarized form describing any suspension, voluntary exclusion,
ineligibility determination actions by an agency of the federal government,
indictment, conviction, or civil judgment involving fraud, official misconduct,
each with respect to the bidder or any person associated with the bidder in
the capacity of owner, partner, director, officer, principal investor, project
director/supervisor, manager, auditor, or a position involving the administration
of federal funds, covering the three-year period immediately preceding the
date of the qualification statement.
(8)
] Commission--The Texas Transportation
Commission
or authorized representative
.
(9)
] Confidential Questionnaire--A
prequalification form reflecting detailed financial and experience data.
(10)
] Construction contract--A
contract entered under Transportation Code, Chapter 223, Subchapter A, or
Transportation Code, §361.231, for the construction or reconstruction
of a segment of the state highway system.
(11)
] Department--The Texas Department
of Transportation.
(12)
] Deputy executive director--Any
second tier manager appointed by the executive director.
(13)
Disadvantaged business enterprise
(DBE)--As defined in Title 49 Code of Federal Regulations (CFR) §26.5,
a for-profit small business concern, certified by the department, that is
at least 51% owned by one or more individuals who are both socially and economically
disadvantaged, or in the case of a corporation, in which 51% of the stock
is owned by one or more such individuals, and whose management and daily business
operations are controlled by one or more of the socially and economically
disadvantaged individuals who own it.]
(14)
] District engineer--The chief
executive officer in each of the designated district offices of the department.
(15)
] Emergency--Any situation
or condition of a designated state highway, resulting from a natural or man-made
cause, that poses an imminent threat to life or property of the traveling
public or which substantially disrupts or may disrupt the orderly flow of
traffic and commerce.
(16)
] Executive director--The
executive director of the Texas Department of Transportation.
(17)
] Highway improvement contract--A
construction, maintenance, or building contract.
(18)
Historically underutilized
business (HUB)--A corporation, sole proprietorship, partnership, or joint
venture formed for the purpose of making a profit, certified by the General
Services Commission in accordance with Government Code, Chapter 2161.]
(19)
] Maintenance contract--A
contract entered under Transportation Code, Chapter 223, Subchapter A, or
Transportation Code, §361.231, for the maintenance of a segment of the
state highway system.
(20)
] Materially unbalanced bid--A
bid which generates a reasonable doubt that award to the bidder submitting
a mathematically unbalanced bid will result in the lowest ultimate cost to
the state.
(21)
] Mathematically unbalanced
bid--A bid containing lump sum or unit bid items that do not reflect reasonable
actual costs plus a reasonable proportionate share of the bidder’s anticipated
profit, overhead costs, and other indirect costs.
(22)
] Preventive maintenance contract--Contracts
let through the construction contracting procedure to preserve and prevent
further deterioration of the roadways and rights of way, with all its components.
(23)
] Proposal--The offer of the
bidder, made out on the prescribed form,
including addenda issued,
giving
bid prices for performing the work described in the plans and specifications.
(24)
] Proposal guaranty--The security
designated in the proposal and furnished by the bidder as a guaranty that
the bidder will enter into a contract if awarded the work.
(25)
] Regular bid item--A bid
item contained in a proposal and not designated as an alternate bid item.
(26)
] Routine maintenance contract--Contracts
let through the routine maintenance contracting procedure to preserve and
repair roadways and rights of way, with all its components, to its designed
or accepted configuration.
and/or
] maintenance and have satisfactorily completed
at least two projects in these fields;
and/or
] maintenance and have satisfactorily
completed at least four projects in these fields (Those contractors possessing
more than two years experience will be granted an additional $250,000 in bidding
capacity for each additional year of experience in construction
or
[
and/or
] maintenance, with a maximum bidding capacity of $3,000,000.);
and
and/or
] maintenance and have satisfactorily
completed at least four projects in these fields
.
[
(
]The
amount of the bidding capacity will be determined by multiplying the net working
capital by a factor determined by the department based upon the expected dollar
volume of projects to be awarded and the number of bidders prequalified by
the department. In the event that this calculation does not result in an amount
greater than $1,000,000, the bidder will receive a bidding capacity of $1,000,000[
)
].
received after the time or at some location
other than that
] specified in the advertisement;
or
]
.
]
(3)
] When the engineer's estimate
on a project is less than $300,000, the executive director or the director's
designee may determine whether a bid error exists, under the same conditions
and criteria as provided in paragraphs (1) and (2) of this subsection.
Award of the
deferred contract will be with the concurrence of the apparent low bidder.
]
Chapter 23.
TRAVEL INFORMATION