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F I S C A L I M P A C T R E P O R T

SPONSOR Lopez

ORIGINAL DATE

LAST UPDATED

2/1/07

HB

SHORT TITLE ROAD PROJECT DESIGN & BUILD SYSTEM

SB 675

ANALYST Propst

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year Total

Cost

Recurring

or Non-Rec

Fund

Affected

Total

0.0

60.0

50.0 110.0 Recurring GSD Purchasing Div

(General Fund)

(Parenthesis ( ) Indicate Revenue Decreases)

GSD estimates 1 additional FTE to review contracts prepared under a design and build system.

SOURCES OF INFORMATION

LFC Files

Responses Received From

General Services Department (GSD)

SUMMARY

Synopsis of Bill

Senate Bill 675 eliminates the exclusion of road and highway construction and reconstruction

projects from the "design and build project delivery system". It also defines allowable specific

project construction cost to be a minimum, instead of maximum, of $10,000,000.

FISCAL IMPLICATIONS

GSD and DOT verified that there is no fiscal impact of this legislation on either Department.

SIGNIFICANT ISSUES

GSD reports that public agencies, which include the NM Department of Transportation, are al-

lowed by this bill to utilize a design and build project delivery system to combine the design and

construction processes on a project rather than having to depend only on the "traditional design-

bid-build" approach. Using the traditional approach tends to create a project working environ-

ment whereby the design entity and the contractor are not necessarily working in tandem with

each other and can lead to them being "often at odds, blaming each other for problems on the

project." SB 675 would foster a more cooperative relationship between the design entity and the

contractor "because both are working on the same team to produce a constructible design and

Senate Bill 675 – Page

2

construction in conformance with the contract specifications." DOT favors passage of this bill to

utilize the design and build delivery system, particularly on its larger projects because "This ap-

proach is particularly valuable in large projects because a hostile atmosphere can increase the

chances of particularly large claims."

Source: NM Department of Transportation

PERFORMANCE IMPLICATIONS

Efficiencies would be realized by passage of this legislation because use of the design and build

project delivery system would simplify the bidding process for large highway construction and

reconstruction projects. Design services and construction services would no longer have to be

obtained through separate bids. "The Department would have the ability to negotiate a construc-

tion and design package with one bidder under a competitive sealed proposal process…"

Source: NM Department of Transportation

ADMINISTRATIVE IMPLICATIONS

The "administrative claims procedure" of the NM Department of Transportation would be

streamlined because a contractor would not be able to claim defective design by the Department.

That's because "the entity providing the construction services has also provided the design…"

Source: NM Department of Transportation

According to the GSD, Purchasing Division: "The request for proposals (RFP) process used in a

design/build procurement takes more staff time than the invitation to bid process currently used

for DOT projects." It has been verified with the Deputy Director of the GSD, Purchasing Divi-

sion that an additional 1.0 FTE would be needed by the Division to handle the workload impact

of including NM Department of Transportation highway projects in the design and build project

delivery system.

Source: GSD, Purchasing Division

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