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CHAPTER 9 PROCUREMENT OF CONSTRUCTION AND DESIGN PROFESSIONAL SERVICES Sec. 901. Definitions. 902. Bid or proposal security. 903. Contract performance security and payment bonds. 904. Copies of bonds. 905. Procurement of design professional services. 906. Letters of intent. 907. Procurement of right-of-way acquisition assistance services. Enactment. Chapter 9 was added May 15, 1998, P.L.358, No.57, effective in 180 days. § 901. Definitions. The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Design professional services." Those professional services within the scope of the practice of architecture, geology, engineering, landscape architecture or land surveying, including studies, investigations, surveying, mapping, tests, evaluations, consultations, comprehensive planning, program management, conceptual design, plans and specifications, value engineering, maintenance manuals and other related services associated with research, planning, development, design, construction, alteration or repair of real property. The term includes services provided under the supervision of a professional engineer to develop engineering software which will aid design professionals in performing their work. The term does not include those services which are not exclusively within the scope of architecture, geology, engineering or landscape architecture but which are related to capital improvements such as, but not limited to, environmental hygienics, construction management as described in section 322 (relating to specific construction powers, duties and procedures), exhibit design, fine arts or lesser arts and crafts, even though an architect, geologist, engineer or landscape architect may provide such services. Cross References. Section 901 is referred to in section 3902 of this title. § 902. Bid or proposal security. (a) Requirement for bid or proposal security.--Bidders or offerors may be required to provide bid or proposal security for construction contracts. Bid or proposal security shall be in the form of a certified or bank check or a bond provided by a surety company authorized to do business in this Commonwealth or another form of security as specified in the invitation for bids or request for proposals. (b) Amount of bid or proposal security.--Bid or proposal security shall be at least in the minimum amount or percentage of the amount of the bid or proposal as shall be specified in the advertisement, the invitation for bids or the request for proposals. (c) Rejection of bids or proposals.--When the invitation for bids or the request for proposals requires security, noncompliance with the instructions in the invitation for bids or the request for proposals requires that the bid or proposal be rejected unless it is determined that the bid or proposal fails to comply with the security requirements in a nonsubstantial manner. (d) Withdrawal of bids and proposals.--After the bids or proposals are opened, they shall be irrevocable for the period specified in the invitation or requests for proposals for bids except as provided in section 512(f) (relating to competitive sealed bidding). If a bidder or offeror is permitted to withdraw its bid or proposal before award, no action shall be had against the bidder or offeror or the bid or proposal security. (Dec. 3, 2002, P.L.1147, No.142, eff. imd.) 2002 Amendment. Act 142 amended subsecs. (a), (b) and (d). Cross References. Section 902 is referred to in section 533 of this title. § 903. Contract performance security and payment bonds. (a) When required and amounts.--For construction contracts awarded for amounts between $25,000 and $100,000, the purchasing agency shall require contract performance security, in an amount equal to at least 50% of the contract price, as the purchasing agency in its discretion determines necessary to protect the interests of the Commonwealth. When a construction contract is awarded in excess of $100,000, the following bonds shall be delivered to the purchasing agency and shall be binding on the parties upon the execution of the contract: (1) A performance bond, executed by a surety company authorized to do business in this Commonwealth and made payable to the Commonwealth, in an amount equal to 100% of the price specified in the contract and conditioned upon the faithful performance of the contract in accordance with the plans, specifications and conditions of the contract. (2) A payment bond, executed by a surety company authorized to do business in this Commonwealth and made payable to the Commonwealth, in an amount equal to 100% of the price specified in the contract and conditioned upon the prompt payment for all materials furnished or labor supplied or performed in the prosecution of the work. Labor or materials include public utility services and reasonable rentals of equipment for the periods when the equipment is actually used at the site. (b) Protection.--A performance bond shall be solely for the protection of the purchasing agency which awarded the contract. A payment bond shall be solely for the protection of claimants supplying labor or materials to the prime contractor to whom the contract was awarded or to any of its subcontractors in the prosecution of the work provided for in the contract, whether or not the labor or materials constitute a component part of the construction. (c) Authority to require additional bonds.--Nothing in this section shall be construed to limit the authority of the Commonwealth agency to require a performance bond, payment bond or other security in addition to those bonds or in circumstances other than specified in subsection (a). (d) Actions on payment bonds.-- (1) Subject to paragraph (2), any claimant who has performed labor or furnished material in the prosecution of the work provided for in any contract for which a payment bond has been given under subsection (a) and who has not been paid in full before the expiration of 90 days after the day on which the claimant performed the last of the labor or furnished the last of the materials for which it claims payments may bring an action on the payment bond in its own name, in assumpsit, to recover any amount due it for the labor or material and may prosecute the action to final judgment and have execution on the judgment. (2) Any claimant who has a direct contractual relationship with any subcontractor of the prime contractor who gave the payment bond but has no contractual relationship, express or implied, with the prime contractor may bring an action on the payment bond only if it has given written notice to the contractor within 90 days from the date on which the claimant performed the last of the labor or furnished the last of the materials for which it claims payment, stating with substantial accuracy the amount and the name of the person for whom the work was performed or to whom the material was furnished. (3) Notice shall be served by registered mail in an envelope addressed to the contractor at any place where its office is regularly maintained for the transaction of business or served in any manner in which legal process may be served in the manner provided by law for the service of a summons except that the service need not be made by a public officer. (e) Adjustment of threshold amount.--The dollar thresholds set forth in subsection (a) shall be adjusted annually by the department to reflect the annual percentage change in the Composite Construction Cost Index of the United States Department of Commerce occurring in the one-year period ending on December 31 of each year. (Dec. 3, 2002, P.L.1147, No.142, eff. imd.) 2002 Amendment. Act 142 amended subsec. (e). Cross References. Section 903 is referred to in section 533 of this title. § 904. Copies of bonds. (a) Copies of bonds.--The purchasing agency shall furnish a copy of any payment bond and the contract for which the bond was given to any person who makes an application for the copy. (b) Fee for copies.--Each applicant shall pay for each copy of any payment bond a fee fixed by the purchasing agency to cover the actual cost of the preparation of the copy. (c) Evidence.--A copy of any payment bond and of the contract for which the bond was given constitutes prima facie evidence of the contents, execution and delivery of the original of the bond and contract. § 905. Procurement of design professional services. (a) Applicability.--Design professional services shall be procured as provided in this section except as authorized by sections 514 (relating to small procurements), 515 (relating to sole source procurement) and 516 (relating to emergency procurement). (b) Policy.--It is the policy of this Commonwealth to publicly announce all requirements for design professional services and to award contracts for design professional services on the basis of demonstrated competence and qualification for the types of services required. There shall be a committee to review the qualifications, experience and work of design professionals seeking contracts with purchasing agencies. (c) Selection committees for Department of Transportation, Department of Environmental Protection, Department of Conservation and Natural Resources and State-affiliated entities.--Where they are authorized by law to act as purchasing agency for design professional services, the Department of Transportation, the Department of Environmental Protection, the Department of Conservation and Natural Resources and State- affiliated entities shall each establish as many selection committees as the department deems appropriate and a procedure for the selection of committee members. (d) Selection committee for all other Commonwealth agencies.--Except as provided for in subsection (c), all purchasing agencies shall use the selection committee appointed by the Governor which shall be composed of five members, none of whom shall be employees of the Commonwealth or hold any elective office or office in any political party. The members shall be architects, engineers or other persons knowledgeable in construction. The members shall serve for terms of two years and shall not be removed except for cause. Of the original members, three shall serve for terms of two years and two for terms of one year. Thereafter, all terms shall be for two years. Each member shall be reimbursed for reasonable travel and other expenses incurred incident to attendance at meetings and to assigned duties and also a per diem allowance in accordance with Commonwealth travel policies. (e) Procedure for selection committees.--The selection committees shall use the procedure set forth in this subsection: (1) The committee shall give public notice of projects requiring design services and publicly recommend to the purchasing agency three qualified design professionals for each project. (2) If desired, the committee may conduct discussions with three or more professionals regarding anticipated design concepts and proposed methods of approach to the assignment. The committee shall select, based upon criteria established by the head of the purchasing agency, no less than three design professionals deemed to be the most highly qualified to provide the services required. In exercising its responsibility, the committee shall consider the following factors: (i) An equitable distribution of contracts to design professionals. (ii) Particular capability to perform the design or construction services for the contract being considered. (iii) Geographic proximity of the design professional to the proposed facility. (iv) The design professional selected has the necessary available personnel to perform the services required by the project. (v) Any other relevant circumstances peculiar to the proposed contract. (f) Design professionals.--Except as provided for in subsection (g), the head of the purchasing agency shall select design professionals as follows: (1) Where the amount of the base construction allocation is less than $20,000,000, the head of the purchasing agency shall choose one of the three firms approved by the selection committee. The fee to be paid to the appointed design professional may be established by the selection committee or may be negotiated at the discretion of the head of the purchasing agency. The $20,000,000 threshold shall be adjusted by the department to reflect the annual percentage change in the Composite Construction Cost Index of the United States Department of Commerce occurring in the one-year period ending December 31 each year. (2) Where the amount of base construction allocation is in excess of or equal to $20,000,000, as annually adjusted, the head of the purchasing agency shall choose one of the three firms approved by the selection committee to begin contract negotiations. The fee to be paid to the design professional and the terms of the contract between the design professional and the department shall be negotiated by the head of the purchasing agency. In negotiating the contract and the fee, the head of the purchasing agency shall take into account the estimated value, scope, complexity, uniqueness and the professional nature of the services to be rendered. In the event the head of the purchasing agency is unable to negotiate a satisfactory contract or fee with the appointed design professional, negotiations with that design professional shall be terminated, and the head of the purchasing agency shall commence negotiations with one of the other firms chosen by the selection committee. In the event the head of the purchasing agency is unable to negotiate a satisfactory contract or fee with the second firm, the head of the purchasing agency shall terminate negotiations with the second design professional and commence negotiation with the third firm. In the event the head of the purchasing agency is unable to negotiate a satisfactory contract with any of the selected firms, the selection committee shall choose additional qualified firms, and the head of the purchasing agency shall continue negotiations in accordance with this subsection until an agreement is reached. (g) Selection method for Department of Transportation, Department of Conservation and Natural Resources, Department of Environmental Protection and State-affiliated entities.--In the event the Department of Transportation, the Department of Conservation and Natural Resources, the Department of Environmental Protection or a State-affiliated entity otherwise authorized by law to use its own selection committee requires the services of a design professional, the head of the purchasing agency or a State-affiliated entity shall choose one of the three firms approved by the selection committee. The head of the purchasing agency or a State-affiliated entity shall negotiate with the firm determined to be the highest qualified firm for design professional services at a fee which is determined to be fair and reasonable to the Commonwealth. In making this decision, the head of the purchasing agency shall take into account the estimated value, scope, complexity and professional nature of the services to be rendered. Should the head of the purchasing agency be unable to negotiate a satisfactory contract with the firm considered to be the most qualified at a fee he determines to be fair and reasonable to the Commonwealth, negotiations with that firm shall be formally terminated. The head of the purchasing agency shall then undertake negotiations with the firm he determines to be the second highest qualified firm. Failing accord with the second most qualified firm, the head of the purchasing agency shall formally terminate negotiations and then undertake negotiations with the third highest qualified firm. Should the head of the purchasing agency be unable to negotiate a satisfactory contract with any of the selected firms, the committee shall select additional qualified firms, and the head of the purchasing agency shall continue negotiations in accordance with this section until an agreement is reached. Cross References. Section 905 is referred to in sections 322, 511, 907, 3756 of this title. § 906. Letters of intent. Before a contract for construction is effective, the head or a deputy of the purchasing agency may issue binding letters of intent to contract. A bidder or offeror receiving a letter of intent may rely on the letter to prepare to start work to the extent authorized by the letter and incur costs in preparation for performance of the contract. No work on the construction site shall be commenced and no payment shall be made to the bidder or offeror until the contract is fully executed. If the contract is not fully executed, the bidder or offeror shall be entitled to reimbursement for its actual expenses reasonably incurred pursuant to the letter prior to notification from the purchasing agency not to proceed. Reimbursement shall not include any loss of anticipated profit, loss of use of money or administrative or overhead costs. (Dec. 3, 2002, P.L.1147, No.142, eff. imd.) 2002 Amendment. Act 142 added section 906. § 907. Procurement of right-of-way acquisition assistance services. Right-of-way acquisition assistance services to be provided in conjunction with the planning, development, design, construction, alteration or repair of bridges and highways by the Department of Transportation shall be procured in accordance with section 905 (relating to procurement of design professional services). (Dec. 3, 2002, P.L.1147, No.142, eff. imd.) 2002 Amendment. Act 142 added section 907.