Senate Bill No. 491–Committee on Government Affairs
CHAPTER..........
AN ACT relating to public works; requiring certain subcontractors to become qualified to be subcontractors on contracts for public works; providing that those subcontractors are presumed to be qualified except under certain circumstances; authorizing the Board to disqualify subcontractors under certain circumstances; providing for a process to appeal such a disqualification; revising the criteria that the Board is required to adopt for the qualification of bidders on contracts for public works; authorizing the Board and the governing body of a local government to issue subpoenas relating to hearings on denials of applications for qualification to bid on or be subcontractors on contracts for public works; specifying the burden of proof in such hearings; revising the provisions governing the awarding of design-build contracts; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 338 of NRS is hereby amended by adding
thereto a new section to read as follows:
1. Each subcontractor whose name is required to be included
in a bid pursuant to NRS 338.141 must, to be eligible to provide
labor or a portion of the work or improvement to a contractor to
whom the State Public Works Board awards a contract pursuant
to this chapter, be qualified in accordance with criteria
established by regulation by the State Public Works Board. The
criteria established by the State Public Works Board pursuant to
this subsection must be made applicable to a subcontractor but
must otherwise be substantively identical to the criteria set forth
in paragraph (b) of subsection 3 of NRS 338.1375.
2. A subcontractor shall be presumed to be qualified pursuant
to subsection 1 unless the State Public Works Board has received
information that:
(a) The State Public Works Board determines to be sufficient
and verifiable; and
(b) Indicates the subcontractor does not meet the criteria
established by regulation pursuant to subsection 1.
3. Upon receipt of sufficient and verifiable information of a
type described in subsection 2, the State Public Works Board shall
require a subcontractor regarding whom such information is
received to submit to the State Public Works Board, on a form
prescribed by the State Public Works Board, an application for
qualification in accordance with the criteria established by
regulation pursuant to subsection 1. After receiving such an
application, the State Public Works Board shall determine
whether the subcontractor is qualified in accordance with the
criteria established by regulation pursuant to subsection 1. Except
as otherwise provided in subsection 4, if the State Public Works
Board determines that the subcontractor does not meet such
criteria, the State Public Works Board may disqualify the
subcontractor, for a period set by the State Public Works Board,
from participating in public works projects which are sponsored
by the State Public Works Board. The State Public Works Board
shall provide written notice to the subcontractor of any such
disqualification.
4. A subcontractor may appeal a disqualification pursuant to
subsection 3 in the manner set forth in NRS 338.1381.
Sec. 2. NRS 338.1373 is hereby amended to read as follows:
338.1373 1. A local government shall award a contract for
the construction, alteration or repair of a public work pursuant to
the provisions of:
(a) NRS 338.1377 to 338.139, inclusive; or
(b) NRS 338.143 to 338.148, inclusive.
2. The provisions of NRS 338.1375 to 338.1383, inclusive, and
section 1 of this act and 338.139 do not apply with respect to
contracts for the construction, reconstruction, improvement and
maintenance of highways that are awarded by the Department of
Transportation pursuant to NRS 408.313 to 408.433, inclusive.
Sec. 3. NRS 338.1375 is hereby amended to read as follows:
338.1375 1. The State Public Works Board shall not accept a
bid on a contract for a public work unless the person who submits
the bid has qualified pursuant to NRS 338.1379 to bid on that
contract.
2. The State Public Works Board shall by regulation adopt
criteria for the qualification of bidders on contracts for public works
of this state. The criteria adopted by the State Public Works Board
pursuant to this section must be used by the State Public Works
Board to determine the qualification of bidders on contracts for
public works of this state.
3. The criteria adopted by the State Public Works Board
pursuant to this section:
(a) Must be adopted in such a form that the determination of
whether an applicant is qualified to bid on a contract for a public
work does not require or allow the exercise of discretion by any one
person.
(b) May include only:
(1) The financial ability of the applicant to perform a
contract;
(2) The principal personnel of the applicant;
(3) Whether the applicant has breached any contracts with a
public agency or person in this state or any other state;
(4) Whether the applicant has been disqualified from being
awarded a contract pursuant to NRS 338.017 or 338.1387; [and]
(5) The performance history of the applicant concerning
other recent, similar contracts, if any, completed by the applicant [.]
; and
(6) The truthfulness and completeness of the application.
Sec. 4. NRS 338.1381 is hereby amended to read as follows:
338.1381 1. If, within 10 days after receipt of the notice
denying [his application,] an application pursuant to NRS
338.1379 or disqualifying a subcontractor pursuant to section 1 of
this act, the applicant or subcontractor, as applicable, files a
written request for a hearing with the State Public Works Board or
the governing body of the local government, the Board or
governing body shall set the matter for a hearing within [10] 20
days after receipt of the request. The hearing must be held not later
than [20] 45 days after the receipt of the request for a hearing[.]
unless the parties, by written stipulation, agree to extend the time.
2. The hearing must be held at a time and place prescribed by
the Board or governing body. At least 10 days before the date set
for the hearing, the Board or governing body shall serve the
applicant or subcontractor with written notice of the hearing. The
notice may be served by personal delivery to the applicant or
subcontractor or by certified mail to the last known business or
residential address of the applicant [.] or subcontractor.
3. The applicant or subcontractor has the burden at the
hearing of proving by substantial evidence that the applicant is
entitled to be qualified to bid on a contract for a public work, or
that the subcontractor is qualified to be a subcontractor on a
contract for a contract for a public work.
4. In conducting a hearing pursuant to this subsection, the
Board or the governing body of a local government may:
(a) Administer oaths;
(b) Take testimony;
(c) Issue subpoenas to compel the attendance of witnesses to
testify before the Board or governing body;
(d) Require the production of related books, papers and
documents; and
(e) Issue commissions to take testimony.
5. If a witness refuses to attend or testify or produce books,
papers or documents as required by the subpoena issued pursuant
to subsection 4, the Board or governing body may petition the
district court to order the witness to appear or testify or produce
the requested books, papers or documents.
6. The Board or governing body shall issue a decision on the
matter within 5 days after the hearing and notify the applicant, in
writing, of its decision within [5] 15 days after it is issued. The
decision of the Board or governing body is a final decision for
purposes of judicial review.
Sec. 5. NRS 338.1387 is hereby amended to read as follows:
338.1387 1. A public body awarding a contract for a public
work shall not award the contract to a person who, at the time of the
bid, is not properly licensed under the provisions of chapter 624 of
NRS or if the contract would exceed the limit of his license. A
subcontractor named by the contractor who is not properly licensed
for that portion of the work , or who, at the time of the bid, is on
disqualified status with the State Public Works Board pursuant to
section 1 of this act, shall be deemed unacceptable. If the
subcontractor is deemed unacceptable, the contractor shall provide
an acceptable subcontractor before the award of the contract.
2. If, after awarding the contract, the public body discovers that
the person to whom the contract was awarded is not licensed, or
that the contract would exceed his license, the public body shall
reject the bid and may accept the next lowest bid for that public
work from a responsive bidder who was determined by the public
body to be a qualified bidder pursuant to NRS 338.1379 or was
exempt from meeting such qualifications pursuant to NRS
338.1373 or 338.1383 without requiring that new bids be
submitted.
Sec. 6. NRS 338.139 is hereby amended to read as follows:
338.139 1. A public body may award a contract for the
construction, alteration or repair of a public work pursuant to NRS
338.1375 to 338.1389, inclusive, to a specialty contractor if:
(a) The majority of the work to be performed on the project to
which the contract pertains consists of specialty contracting for
which the specialty contractor is licensed; and
(b) The project to which the contract pertains is not part of a
larger public work.
2. If a public body awards a contract to a specialty contractor
pursuant to NRS 338.1375 to 338.1389, inclusive, all work to be
performed on the project to which the contract pertains that is
outside the scope of the license of the specialty contractor must be
performed by a subcontractor who [is] :
(a) Is licensed to perform such work [.]; and
(b) At the time of the performance of the work, is not on
disqualified status with the State Public Works Board pursuant to
section 1 of this act.
Sec. 7. NRS 338.141 is hereby amended to read as follows:
338.141 1. Except as otherwise provided in subsection 2[,]
and NRS 338.1727, each bid submitted to any officer, department,
board or commission for the construction of any public work or
improvement must include:
(a) The name of each subcontractor who will provide labor or a
portion of the work or improvement to the contractor for which he
will be paid an amount exceeding 5 percent of the prime
contractor’s total bid. Within 2 hours after the completion of the
opening of the bids, the contractors who submitted the three lowest
bids must submit a list containing the name of each subcontractor
who will provide labor or a portion of the work or improvement to
the contractor for which he will be paid an amount exceeding 1
percent of the prime contractor’s total bid or $50,000, whichever is
greater, and the number of the license issued to the subcontractor
pursuant to chapter 624 of NRS. [If] Except as otherwise provided
in this paragraph, if a contractor [fails] :
(1) Fails to submit [such a] the list within the required time
[, his]; or
(2) Submits a list that includes the name of a subcontractor
who, at the time of the submission of the list, is on disqualified
status with the State Public Works Board pursuant to section 1 of
this act,
the contractor’s bid shall be deemed not responsive. A contractor’s
bid shall not be deemed not responsive on the grounds that the
contractor submitted a list that includes the name of a
subcontractor who, at the time of the submission of the list, is on
disqualified status with the State Public Works Board pursuant to
section 1 of this act if the contractor, before the award of the
contract, provides an acceptable replacement subcontractor in the
manner set forth in subsection 1 of NRS 338.1387.
(b) A description of the portion of the work or improvement
which each subcontractor named in the bid will complete.
2. The contractor shall list in his bid pursuant to subsection 1
the name of a subcontractor for each portion of the project that will
be completed by a subcontractor.
3. A contractor whose bid is accepted shall not substitute any
person for a subcontractor who is named in the bid, unless:
(a) The awarding authority objects to the subcontractor, requests
in writing a change in the subcontractor and pays any increase in
costs resulting from the change; or
(b) The substitution is approved by the awarding authority or an
authorized representative of the awarding authority. The
substitution must be approved if the awarding authority or
authorized representative of the awarding authority determines that:
(1) The named subcontractor, after having a reasonable
opportunity, fails or refuses to execute a written contract with the
contractor which was offered to the subcontractor with the same
general terms that all other subcontractors on the project were
offered;
(2) The named subcontractor files for bankruptcy or becomes
insolvent; or
(3) The named subcontractor fails or refuses to perform his
subcontract within a reasonable time or is unable to furnish a
performance bond and payment bond pursuant to NRS 339.025.
4. As used in this section, “general terms” means the terms and
conditions of a contract that set the basic requirements for a project
and apply without regard to the particular trade or specialty of a
subcontractor, but does not include any provision that controls or
relates to the specific portion of the project that will be completed
by a subcontractor, including, without limitation, the materials to be
used by the subcontractor or other details of the work to be
performed by the subcontractor.
Sec. 8. NRS 338.1721 is hereby amended to read as follows:
338.1721 To qualify to participate in a project for the design
and construction of a public work, a design-build team must:
1. Obtain a performance bond and payment bond as required
pursuant to NRS 339.025;
2. Obtain insurance covering general liability and liability for
errors and omissions;
3. Not have been found liable for breach of contract with
respect to a previous project, other than a breach for legitimate
cause;
4. Not have been disqualified from being awarded a contract
pursuant to NRS 338.017, 338.1387, 338.145 or 408.333; [and]
5. Ensure that the members of the design-build team possess
the licenses and certificates required to carry out the functions of
their respective professions within this state[.] ; and
6. If the project is for the design and construction of a public
work of the State, ensure that the prime contractor is qualified to
bid on a public work of the State pursuant to NRS 338.1379.
Sec. 9. NRS 338.1723 is hereby amended to read as follows:
338.1723 1. A public body shall advertise for preliminary
proposals for the design and construction of a public work by a
design-build team in a newspaper of general circulation in this
state.
2. A request for preliminary proposals published pursuant to
subsection 1 must include, without limitation:
(a) A description of the public work to be designed and
constructed;
(b) Separate estimates of the costs of designing and constructing
the public work;
(c) The dates on which it is anticipated that the separate phases
of the design and construction of the public work will begin and
end;
(d) The date by which preliminary proposals must be submitted
to the public body, which must not be less than 30 days after the
date that the request for preliminary proposals is first published in a
newspaper pursuant to subsection 1; [and]
(e) A statement setting forth the place and time in which a
design-build team desiring to submit a proposal for the public work
may obtain the information necessary to submit a proposal,
including, without limitation, the information set forth in subsection
3[.] ; and
(f) If the proposal is for a public work of the State, a statement
setting forth that the prime contractor must be qualified to bid on
a public work of the State pursuant to NRS 338.1379 before
submitting a preliminary proposal.
3. A public body shall maintain at the time and place set forth
in the request for preliminary proposals the following information
for inspection by a design-build team desiring to submit a proposal
for the public work:
(a) The extent to which designs must be completed for both
preliminary and final proposals and any other requirements for the
design and construction of the public work that the public body
determines to be necessary;
(b) A list of the requirements set forth in NRS 338.1721;
(c) A list of the factors that the public body will use to evaluate
design-build teams who submit a proposal for the public work,
including, without limitation:
(1) The relative weight to be assigned to each factor pursuant
to NRS 338.1727; and
(2) A disclosure of whether the factors that are not related to
cost are, when considered as a group, more or less important in the
process of evaluation than the factor of cost;
(d) Notice that a design-build team desiring to submit a proposal
for the public work must include with its proposal the information
used by the public body to determine finalists among the design
-build teams submitting proposals pursuant to subsection 2 of NRS
338.1725 and a description of that information;
(e) A statement that a design-build team whose prime contractor
holds a certificate of eligibility to receive a preference in bidding on
public works issued pursuant to NRS 338.1389 or 338.147 should
submit a copy of the certificate of eligibility with its proposal; and
(f) A statement as to whether a design-build team that is selected
as a finalist pursuant to NRS 338.1725 but is not awarded the
design-build contract pursuant to NRS 338.1727 will be partially
reimbursed for the cost of preparing a final proposal and, if so, an
estimate of the amount of the partial reimbursement.
Sec. 10. NRS 338.1727 is hereby amended to read as follows:
338.1727 1. After selecting the finalists pursuant to NRS
338.1725, the public body shall provide to each finalist a request
for final proposals for the public work. The request for final
proposals must:
(a) Set forth the factors that the public body will use to select a
design-build team to design and construct the public work,
including the relative weight to be assigned to each factor; and
(b) Set forth the date by which final proposals must be
submitted to the public body.
2. If one or more of the finalists selected pursuant to NRS
338.1725 is disqualified or withdraws, the public body may select
a design-build team from the remaining finalists if at least two
finalists remain.
3. Except as otherwise provided in this subsection, in assigning
the relative weight to each factor for selecting a design-build team
pursuant to subsection 1, the public body shall assign, without
limitation, a relative weight of 5 percent to the possession of a
certificate of eligibility to receive a preference in bidding on public
works and a relative weight of at least 30 percent to the proposed
cost of design and construction of the public work. If any federal
statute or regulation precludes the granting of federal assistance or
reduces the amount of that assistance for a particular public work
because of the provisions of this subsection relating to preference in
bidding on public works, those provisions of this subsection do not
apply insofar as their application would preclude or reduce federal
assistance for that public work.
[3.] 4. A final proposal submitted by a design-build team
pursuant to this section must be prepared thoroughly[,] and be
responsive to the criteria that the public body will use to select a
design-build team to design and construct the public work
described in subsection 1 . [and comply with the provisions] A final
proposal is exempt from the requirements of NRS 338.141.
[4.] 5. After receiving the final proposals for the public work,
the public body shall:
(a) Select the most cost-effective and responsive final proposal,
using the criteria set forth pursuant to subsections 1 and [2;] 3; or
(b) Reject all the final proposals.
[5.] 6. If a public body selects a final proposal pursuant to
paragraph (a) of subsection [4,] 5, the public body shall, at its next
regularly scheduled meeting:
(a) Review and ratify the selection.
(b) Award the design-build contract to the design-build team
whose proposal is selected.
(c) Partially reimburse the unsuccessful finalists if partial
reimbursement was provided for in the request for preliminary
proposals pursuant to paragraph (f) of subsection 3 of NRS
338.1723. The amount of reimbursement must not exceed, for each
unsuccessful finalist, 3 percent of the total amount to be paid to the
design-build team as set forth in the design-build contract.
(d) Make available to the public a summary setting forth the
factors used by the public body to select the successful design-build
team and the ranking of the design-build teams who submitted final
proposals. The public body shall not release to a third party, or
otherwise make public, financial or proprietary information
submitted by a design-build team.
[6.] 7. A contract awarded pursuant to this section:
(a) Must specify:
(1) An amount that is the maximum amount that the public
body will pay for the performance of all the work required by the
contract, excluding any amount related to costs that may be
incurred as a result of unexpected conditions or occurrences as
authorized by the contract;
(2) An amount that is the maximum amount that the public
body will pay for the performance of the professional services
required by the contract; and
(3) A date by which performance of the work required by the
contract must be completed.
(b) May set forth the terms by which the design-build team
agrees to name the public body, at the cost of the public body, as an
additional insured in an insurance policy held by the design-build
team.
(c) Except as otherwise provided in paragraph (d), must not
require the design professional to defend, indemnify or hold
harmless the public body or the employees, officers or agents of
that public body from any liability, damage, loss, claim, action or
proceeding caused by the negligence, errors, omissions,
recklessness or intentional misconduct of the employees, officers
and agents of the public body.
(d) May require the design-build team to defend, indemnify and
hold harmless the public body, and the employees, officers and
agents of the public body from any liabilities, damages, losses,
claims, actions or proceedings, including, without limitation,
reasonable attorneys’ fees, that are caused by the negligence, errors,
omissions, recklessness or intentional misconduct of the design
-build team or the employees or agents of the design-build team in
the performance of the contract.
[7.] 8. Any provision of a contract that is in violation of
paragraph (c) of subsection [6] 7 is declared to be contrary to the
public policy of this state and is void.
[8.] 9. A design-build team to whom a contract is awarded
pursuant to this section shall:
(a) Assume overall responsibility for ensuring that the design
and construction of the public work is completed in a satisfactory
manner; and
(b) Use the workforce of the prime contractor on the design
-build team to construct at least 15 percent of the public work.
Sec. 11. This act becomes effective upon passage and
approval.
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