Subchapter A. GENERAL

The Texas Department of Transportation (department) adopts amendments to §§9.30 - 9.39, §9.41, and §9.42, new §9.43, and the repeal of §9.40 and §9.43, concerning contracting for architectural, engineering, and surveying services. The amendments to §§9.30 - 9.39, §9.41, and §9.42, new §9.43, and the repeal of §9.40 and §9.43 are adopted without changes to the proposed text as published in the November 12, 2004 issue of the Texas Register (29 TexReg 10474) and will not be republished.

EXPLANATION OF ADOPTED AMENDMENTS, NEW, AND REPEALED SECTIONS

Architectural, engineering, and surveying services are procured by the department in accordance with Government Code, Chapter 2254, Subchapter A, and 23 CFR §172.5.

The adopted amendments clarify and refine the language to improve consistency in the interpretation and application of procedures for provider precertification, and the selection, negotiation, management, and evaluation of contracts with architects, engineers, and surveyors.

Section 9.30 is amended to revise the reference to Transportation Code §361.042, which was renumbered as §361.032 by the 78th Legislature, Regular Session, 2003. Section 9.30 is also amended to update the title of referenced §9.33 to its revised title (relating to Notice of Intent and Letter of Interest).

Section 9.31 is amended to: delete the definitions of "constructability," "construction engineering," "construction inspection," "construction management," "consultant review committee (CRC)," "FONSI," "graduate engineer," "IESNA," "ITS," and "small business concern" as they are no longer used; clarify the definition of "administrative qualification;" add a definition for "Audit Office;" add a definition for "specific deliverable contract," which replaces deleted "project specific contract" and clarifies the types of contracts; clarify the definition of "department project manager" to include management of contracts; add a definition for "Design Division;" revise the definition of "historically underutilized business" to reflect the name change of the General Services Commission to the Texas Building and Procurement Commission; clarify the term and definition of "indefinite deliverable contract;" add a definition for "indirect cost rate guidance" to help determine indirect costs and to replace the term "overhead guidelines" which is deleted; add a definition for "letter of interest" (LOI) which is the prime provider's responsive document; revise the definitions of "licensed state land surveyor" to include the citation to the laws concerning this license as re-codified in Occupations Code by the 78th Legislature, Regular Session; revise the definitions of "long list" to include that the LOI must be acceptable, "lower tier debarment certification" to remove a reference to a form that is no longer used, and "metropolitan district" to add the Pharr, El Paso, Corpus Christi and Lubbock districts; add a definition for "notice of intent" (NOI) as the department's indication it intends to enter into professional contracts;" revise the definition of "short list meeting" to include distribution of the Interview and Contract Guide; and delete the term "technical precertification," which is replaced with the clearer term "precertification."

Section 9.32 is amended by reorganizing the section into subsections (a) and (b). Subsection (a) is titled "Policy" and includes paragraphs (1)-(8) as they currently exist. Subsection (b) is added and titled "Organizations" and is equivalent to §9.33(a)(3) which is deleted and relocated to this section as a more appropriate location.

Section 9.33 is amended to change the section title to "Notice of Intent and Letter of Interest" to clarify the two distinct processes that this section covers. Subsection (a) is renamed "Notice of Intent (NOI)" for clarification. References to an RFP number are deleted because there is no longer a defined RFP number. References throughout this section to listed categories in §9.43 are revised because the repeal of §9.43 will eliminate listed categories since they will be posted on the department's website. The list of what the NOI identifies is expanded to include the assigned HUB or DBE participation goal for the contracts with additional text relocated to this more appropriate location from §9.37(c). Subparagraphs (a)(2)(F)-(H) are deleted because this information is no longer contained in the newspaper notices. Only the essential information is published in the newspaper, and a reference to the department's website is given for more information. Paragraph (a)(3) is deleted and relocated to a more appropriate location in §9.32. The requirement for the Design Division Director to approve an increase in the maximum number of pages in the letter of interest (LOI) is eliminated. The previously required approval adds unnecessary time to the process and is not warranted based on review of request history. Clarification is added to indicate that stated requirements, including length, apply unless specified otherwise in the NOI because the need for additional pages is typically associated with larger and more complicated projects. Clauses (i) and (ii) under subsection (b)(4)(B) are reversed for clarity and amended to allow the prime provider's and subprovider's key personnel to be replaced during the selection process and before contract execution only by another person from the prime provider's or subprovider's proposed team in the LOI and approved by the consultant selection team (CST). This provides a consistent process for a situation that occurs frequently and allows the decision control to remain with the CST. Wording for replacement of the project manager during the selection and award process is clarified to indicate replacement is acceptable by a team member during the selection process and before contract execution. Under the list of what the LOI shall include, the reference to similar project-related experience is revised to eliminate reference to information in the precertification database. This data is only accessible to precertification review officers for the purpose of precertification only. The data is not collected in a format for the purpose of evaluating an individual's experience for contract selection. The name and contact information for references is clarified to be for references from the department or other entities.

Section 9.34 is renamed "Short List Determination" for consistency in section titles. The consultant selection team composition requirements are modified to require a minimum of one professional engineer for engineering contracts, a minimum of one professional engineer or registered or licensed professional land surveyor for surveying contracts, and a minimum of one registered architect for architectural contracts. This change further ensures a qualified selection team for the purpose of evaluating and selecting providers based on their proposed qualifications.

In order to protect the department and the general public, firms may be disqualified from the long list if the department or the firm's references have knowledge that the firm or an employee of the firm has a record of unprofessional conduct, including, but not limited to, whether the appropriate licensing board has cited the firm or employee for a violation of its rules concerning conduct. The long list qualification is clarified to indicate that the letters of interest are what are specifically reviewed for submittal requirements and precertification requirements. The team is not actually evaluated until after the long list is determined. The long list evaluation was revised to clarify that the CST and not the department reviews the LOIs. It is also clarified that the CST will consider the identified criteria in its review of the long-listed providers and not all interested providers. The second criterion listed is revised to clarify that the project manager's experience refers to the provider's project manager. The acronym RIF is identified as relative importance factor. Subsection (f) is renamed Short List to more appropriately represent the information addressed. The acronym RFP is identified as request for proposal.

Section 9.35 is amended to delete language regarding the opportunity to conduct a short list meeting. A short list meeting is at the discretion of the managing officer who best knows the complexity of the project. Subsection (e) clarifies where or when references are identified. Reference to Consultant Review Committee (CRC) approval of other criteria is eliminated because the CRC no longer functions in this capacity.

Section 9.36 is renamed "Short List Interviews and Evaluation" for consistency and clarification in section titles. The section is amended to delete the last sentence of subsection (a) because it potentially conflicts with the previous sentence that clearly states the required attendance of the prime provider's project manager at an interview. Subsection (d) is renamed "Interview evaluation criteria" for consistency and clarification in subsection titles. Subsection (d) is revised to incorporate language consistent with the previous section and clarify that the CST will evaluate interviews based on the listed criteria. The criteria wording is revised to be consistent with the previous section, §9.35. Performance scores or references will now be considered in the interview evaluation, whereas currently they are only considered if no proposal is required. Past performance is an important indicator as to how a firm will perform and the addition here allows it to be considered in the possible procurement scenarios of an interview with no proposal, a proposal with no interview, and an interview and proposal. Reference to CRC approval of other criteria is eliminated because the CRC no longer functions in this capacity.

Section 9.37 is amended to add additional steps for breaking a tie. Subsection (c) is deleted and relocated to a more appropriate location in §9.33. Reference to the CRC is replaced by reference to the Design Division for review of the selection package. Renumbered subsection (f) is revised to clarify information required by the selected provider for negotiation. References to the relevant law regarding negotiation requirements have been added. The reference to 23 CFR §172.9 is replaced by the reference to 23 CFR §172.5(c) which is the current CFR section addressing federally funded contracts not being based on percentage of construction cost. Subsection (f)(2) is renamed "Negotiation Period" to more appropriately reflect the information covered. The section is amended to allow approval of a unique negotiation schedule for any contract and not just multiple contract selections. The section is amended to clarify order of negotiation for single and multiple contract selection processes. Reference to the professional provider is clarified to refer to the prime provider.

Section 9.38 is amended to clarify applicable credit for DBE/HUB participation and eliminate the unnecessary statement that a HUB prime provider perform at least 25% of the work. The section already states that a prime provider shall perform at least 30% of the contracted work. The section is amended to delete the restriction that no subprovider may perform a higher percentage of work than the prime provider. The prime provider is required to perform at least 30% of the work and is ultimately responsible for the contracted work. Elimination of this constraint will allow the prime provider more flexibility in determining the optimum distribution of work among subproviders. Language is also deleted regarding subcontract content and review requirements since current standard prime contract language adequately addresses subcontract requirements. The section is amended to specify prior written consent of the department for prime provider project manager replacement. Reference to department Form 132 is eliminated since this is no longer a form required by the department. A subsection is added for indefinite deliverable contract work authorizations, which are negotiated during the contract period. The subsection addresses the procedure of ending unsuccessful negotiations for a work authorization with one provider before initiating negotiations with another. The section is amended to clarify that the department's audit office may perform an audit. The section is also amended to reflect the pending changes to the department's provider performance evaluation form and process regarding when and how a provider is evaluated.

Section 9.39 is renamed "Selection and Contract Types" to reflect section content. Subsection (a) is added to address selection types. The number of selection types is changed from four to three since one of the four currently identified is best addressed as a contract type. The cause for an emergency contract selection is clarified and subparagraphs are added to address eligibility of the firm's project manager, the notification process, and the selection process. Subsection (b) is added to address contract types that are identified as indefinite deliverable and specific deliverable. Limitations of the indefinite deliverable contract type are clarified to specify divisions as eligible for the same $5 million dollar amount as a metropolitan or border district. The rules have never limited the divisions, except for the turnpike division, which was limited to $5 million. Since the divisions support 25 districts statewide, the higher number is necessary. The Lubbock and Corpus Christi districts' limitations are increased from $2 million to $5 million since population growth has resulted in their addition to the definition of "metropolitan district." El Paso and Pharr have also been added to that definition, but their limitation was already at $5 million since they also are border districts.

Amendments also allow the maximum amount of $5 million and the two year work authorization period to be exceeded if approved by the Texas Transportation Commission (commission) prior to NOI publication to accommodate some of the very large projects such as the Trans-Texas Corridor. This will allow for additional flexibility, if warranted, in the use of this contract type.

Section 9.40 is repealed. Information in this section related to DBE/HUB goals is adequately addressed in §§9.50 et.seq. of this chapter (relating to Business Opportunity Program).

Section 9.41 is amended to appropriately reference §9.43 as it is repealed and reenacted as a new section. Subsections (a) and (d)-(g) are renamed for clarification. Subsection (b) is revised to clarify who may apply. Precertification questionnaire is changed to precertification application. Reference to the CRC is changed to the Design Division. Reference to a precertification information packet is deleted because the information is now available on the department's website. The list of information now available is clarified. Reference to prime providers and subproviders is revised to simply reference providers or a firm for clarification and consistency where appropriate. Former subsection (c), regarding Instructions, is deleted since there is no need to annually publish the instructions in the Texas Register because the process and instructions are currently maintained on a daily basis on the department's website. Under renumbered subsection (e), clarification is added with respect to a firm's precertification status and a firm employee's precertification status. Under renumbered subsection (h), regarding Appeals, the reference to CRC is changed to Design Division in one instance and in another instance it is changed to the department for review of the information to determine precertification as the CRC no longer serves this function. The last sentence is revised to clarify a written complaint regarding precertification denial may be filed with the executive director or his or her designee.

Section 9.42 is amended to clarify which firms are exempt from administrative qualification. The reference to §9.43 is replaced by a reference to the department's website as a result of the repeal of §9.43. The typical compensation type for firms exempt from administrative qualifications is more appropriately indicated as units of service and lump sum is deleted. Reference to the CRC is replaced by reference to the Design Division. References to overhead rate are replaced by indirect cost rate as a more appropriate term. The list of acceptable indirect cost rate audit preparers is revised to include an agency of the federal government, another state transportation agency, or a local transit agency in accordance with the Single State Audit Act. The department's Audit Office will be given access to the audit work papers if the audit is performed by an independent certified public accountant. The regulations and guidelines applicable to audit report preparation are clarified. Procedures related to an indirect cost rate projection are clarified for providers who have been in operation for less than one fiscal year. Rates the department will consider by job classification are revised to include salary rates, range of rates, or average rates.

Section 9.43 is repealed and new §9.43, "Precertification Requirements," is adopted. The repeal of §9.43 eliminates the work categories, descriptions, and requirements for precertification since new §9.43 provides that this information will be maintained on the department's website. The addition of or any change to a work category will require a commission minute order. The agenda for commission meetings is posted with the Secretary of State's Office and also on the department website. By using a minute order to change the work categories, the public is afforded an opportunity to comment. Maintenance of the work categories on the website will provide more flexibility in updating categories to meet the outsourcing needs of the districts and divisions without the requirement of proposing changes to the Texas Administrative Code. New §9.43 reestablishes the following provisions from the repealed §9.43. The section allows a firm to be precertified in the technical work categories by providing the listed requirements that are maintained on the department's website. A firm may only submit an application for an individual who is employed by that firm at the time of submittal for precertification, and allows the provider to use experience that is either prior to or after licensure unless otherwise stated in a specific category. The employee must be licensed to practice in any state that is recognized by the appropriate Texas board of licensing.

COMMENTS

Comment: One comment was received relating to amended §9.34(b)(1) concerning the disqualification of a firm when there is knowledge that the firm, or an employee of the firm, has a record of unprofessional conduct including but not limited to whether the firm or an employee has been sanctioned for a violation of the rules of a licensing board. The comment acknowledged the right of the department to disqualify a proposer in the case of a breach of ethical or professional obligations that raise questions about the firm's ability to perform appropriately on a project. However, the broad nature of the proposed language was questioned with respect to having a technical violation of licensing rules by a single individual that would cause the entire firm to be disqualified.

Response: It should be noted that the proposed language is a permissive condition. A firm may indeed have an individual technical violation with respect to the rules of a licensing board and still be a qualified firm. Even though the department's intent would not be to subject an entire firm to disqualification for such an individual technical violation of licensing rules, there can be instances where the position of the individual within the firm and their actions in representing the firm make the disqualification decision appropriate with respect to the firm's ability to perform appropriately on a project. While the department must exercise reasonable judgment, the department needs the flexibility represented by the language in this section to determine the firm's qualifications to enter into future contracts and perform appropriately.

Subchapter B. USE OF STATE HIGHWAY RIGHT OF WAY

Subchapter G. OPERATION OF DEPARTMENT TURNPIKE PROJECTS