June 6, 2023
By Caitlyn Culbertson and Brooke Lenneman
On May 19, 2023, the Illinois General Assembly adopted Senate Bill 1570, which amends the Illinois Municipal Code to add a new Division 39.2 explicitly authorizing municipalities to enter into design-build contracts. The bill was sent to the Governor’s Office that day, and is currently awaiting the Governor’s signature, which we expect to happen any day.
Ostensibly, SB1570, which will be titled the Municipal Design-Build Authorization Act once signed, is a good thing: it grants explicit authority to municipalities to enter into design-build contracts (this is especially important to non-home rule municipalities, for whom authority to pursue a design-build project is currently murky). The Bill’s stated purpose is “to increase the efficiency and effectiveness of delivering public projects.” 65 ILCS 5/11-39.2-5. However, in granting explicit authority, the Bill also imposes a mandatory, detailed, and cumbersome Request for Proposal (“RFP”), evaluation, and selection process for the design-build entity. The Bill does not pre-empt home rule authority, so home rule municipalities can use their home rule authority to opt-out of these time-consuming requirements. But for non-home rule municipalities, the Bill’s onerous solicitation, evaluation, selection, and reporting process may actually discourage the use of design-build contracts.
Prior to this new legislation, even without explicit authority to enter into design-build contracts, non-home rule municipalities cobbled together authority to enter into design-build contracts, usually by relying on the Local Government Professional Services Selection Act, 50 ILCS 510/0.01 et seq., for the design and construction management services, and then waiving competitive bidding requirements for the related construction services. SB1570 likely precludes non-home rule municipalities from using this process for design-build contracts, as it adds another layer of regulation to the design-build process that non-home rule municipalities likely cannot waive. Unlike the statute requiring competitive bidding, which explicitly authorizes bidding requirements to be waived by a supermajority vote, SB1570 does not explicitly authorize municipalities to waive, nor does it provide any exceptions to, the proposal, evaluation, and selection process. It thus appears that, if SB1570 becomes law, non-home rule municipalities will be bound to follow the procedures set forth in the new law to utilize a design-build contract.
The two-phase RFP process required by SB1570 is summarized below. We note that, if the total overall cost of a project is estimated to be less than $12 million, the municipality may combine the two-phase procedure for selection into one phase:
- Intent to Solicit Proposals: The municipality must issue an intent to receive proposals at least 14 days before issuing the request for proposals.
- Request for Proposals:
- The municipality must employ or hire an outside design professional to develop a RFP that includes specific information, including a proposed budget, preliminary completion schedule, performance criteria, evaluation criteria, and material requirements for the contract including bonds, insurance, etc.
- The design professional that assists in the preparation of the scope and performance criteria required for the RFP cannot submit a proposal in response to the RFP.
- The RFP must be issued at least 21 days before the proposal due date, or 28 days before the due date if the project is estimated to cost more than $12 million.
- Evaluation of Proposals:
- The RFP process contemplates a two-phase evaluation process: Phase I evaluation includes a qualification-based selection/evaluation process. Phase II is a technical evaluation process, including compliance with objectives, design concepts, quality of the products/materials proposed, and cost.
- Upon completion of the Phase I evaluation, the municipality must develop a short list of the most highly qualified respondents.
- The RFP must provide the Phase I short-listed firms a minimum of 30 days to prepare their Phase II submissions.
- The municipality must employ or contract with a licensed design professional to review the Phase II submissions.
- Award: Upon completion of the Phase II evaluation, the municipality may award the contract to the highest-ranked entity. The municipality may negotiate with the highest-ranked entity after award but before contract execution for the purpose of securing better terms.
- Reports: At the end of each six-month period following award and prior to final payment, the selected entity must submit a written report detailing its plan to comply with the utilization goals for business enterprises established in the Business Enterprises for Minorities, Women, and Persons with Disabilities Act and the Illinois Human Rights Act.
SB1570 also creates the School Design-Build Contracts Article in the School Code, which provides similar requirements for design-build contracts for school districts.
The full text of SB1570 can be found at this link. For more information, contact Caitlyn Culbertson, Brooke Lenneman, or any Elrod Friedman attorney.
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