BILL REQ. #:  H-1558.2 

Read first time 02/06/09.   Referred to Committee on Transportation.

     AN ACT Relating to directing the use of design-build and commercial, off-the-shelf procurement methods by the Washington state ferry system; amending RCW 47.56.030; adding new sections to chapter 47.60 RCW; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that the current procurement practices of the Washington state ferry system frequently involve extensive in-house design efforts, often supported by extensive outside consulting services. The legislature notes that this practice has extended to the design and procurement of ferries, terminal facilities, and some operating and management support systems involving information technologies. The legislature further notes that these procurement practices have, in several cases, resulted in the expenditure of many millions of dollars without resulting in successful deliveries to the ferry system. The legislature further finds that industry has abandoned these kinds of in-house practices in favor of design-build procurement strategies for major capital acquisitions and commercial, off-the-shelf procurement strategies for ancillary systems that rely on rapidly evolving technologies. Finally, the legislature finds that a severe economic and budgetary crisis imposes an imperative to adopt immediately new and much more economical procurement practices. Therefore, the legislature intends to restructure the duties of the Washington state ferries to reflect best procurement practices in the marine industry.

NEW SECTION.  Sec. 2   A new section is added to chapter 47.60 RCW to read as follows:
     The Washington state ferries shall:
     (1) Immediately cease all in-house design and construction activity and all associated consulting contracting. With the prior concurrence of the legislature, the secretary of transportation may, on a case-by-case basis, authorize any individual procurement programs that are in progress, as of the effective date of this section, to proceed to their earliest practicable conclusion;
     (2) Continue an in-house ferry maintenance engineering effort by staff tasked to manage routine and emergent ferry maintenance work performed by on-board crews, the intermediate-level staff at the Eagle Harbor facility, and by contract to depot-level, commercial ship repair vendors. Service life extension projects by which older ferry vessels receive a comprehensive refit are specifically excluded from this in-house maintenance provision. These complex modernization projects must be authorized by the legislature and managed through the design-build process;
     (3) Immediately develop and rapidly implement a revised procurement method as described in section 3 of this act;
     (4) Immediately reorganize itself and associated department offices to comport with the revised procurement strategies. The department shall propose to the legislature by December 1, 2009, a revised organization and staffing plan that must include the following features:
     (a) A sole focus by Washington state ferries headquarters on the management and maintenance of the existing ferry system;
     (b) The relocation of the ferry maintenance engineering staff to and functional integration with the Eagle Harbor maintenance organization; and
     (c) The establishment within department headquarters of a very small staff charged with coordinating ferry system requirements and procurements within the state's overall transportation investments management process and in accordance with the design-build and commercial, off-the-shelf strategies established in section 3 of this act.

NEW SECTION.  Sec. 3   A new section is added to chapter 47.60 RCW to read as follows:
     (1) The department shall propose a procedure and implementing legislation for the use of design-build and commercial, off-the-shelf procurement strategies to the legislature by December 1, 2009. To assure that the proposal reflects current industry best practices, the department shall convene a marine commercial procurement strategies advisory group comprising of: Representatives of the marine architecture, shipbuilding, and information technology industries; members of the general public drawn from ferry system riders and ferry-using local industries; and experts drawn from other department design-build programs.
     (2) The procedure proposed to implement the commercial procurement strategy under this section must:
     (a) Be consistent with current maritime industry and high technology industry best procurement practices;
     (b) Be consistent with current industry and regulatory safety and construction standards. For ferry vessels, these standards must be current American bureau of shipbuilding and United States coast guard standards and other environmental regulations;
     (c) Provide, for ferry vessel and terminal procurements and major modernizations, a design-build-to-target-price procedure for developing ferry system procurement requirements, setting a target price, and soliciting competitive bids;
     (d) Provide a commercial, off-the-shelf process for the procurement of operating and management support systems other than ferry vessels or terminals;
     (e) Avoid the inclusion of government-furnished equipment provisions in procurement solicitations unless the secretary of transportation, with the governor's concurrence, specifically authorizes that bidding invitation feature;
     (f) Specify an owner's representative or construction manager form of contract management with the construction manager to be included in the proposal development process and that the construction manager coordinate all construction oversight and inspection using American bureau of shipbuilding standards and United States coast guard inspection procedures;
     (g) Use a best value evaluation process of submitted bids;
     (h) Provide for the appropriate reimbursement of the reasonable engineering and proposal development costs incurred by qualified, performing, but nonwinning bidders; and
     (i) Allow full legislative oversight.

Sec. 4   RCW 47.56.030 and 2008 c 122 s 8 are each amended to read as follows:
     (1) Except as permitted under chapter 47.29 or 47.46 RCW:
     (a) Unless otherwise delegated, and subject to RCW 47.56.820, the department of transportation shall have full ((charge of)) responsibility for the planning, analysis, and construction of all toll bridges and other toll facilities including the Washington state ferries, and the operation and maintenance thereof.
     (b) The transportation commission shall determine and establish the tolls and charges thereon.
     (c) Unless otherwise delegated, and subject to RCW 47.56.820, the department shall have full charge of planning, analysis, and design of all toll facilities. The department may conduct the planning, analysis, and design of toll facilities as necessary to support the legislature's consideration of toll authorization.
     (d) The department shall utilize and administer toll collection systems that are simple, unified, and interoperable. To the extent practicable, the department shall avoid the use of toll booths. The department shall set the statewide standards and protocols for all toll facilities within the state, including those authorized by local authorities.
     (e) Except as provided in ((this)) (f) and (g) of this subsection, the department shall proceed with the construction of such toll bridges and other facilities and the approaches thereto by contract in the manner of state highway construction immediately upon there being made available funds for such work and shall prosecute such work to completion as rapidly as practicable.
     (f) The department shall use the design-build-to-target-price procedure developed in section 3 of this act for all ferry vessel and terminal preservation and construction projects, except when the project is minor and under ten million dollars in scope. The department shall use the commercial, off-the-shelf procurement procedures developed in section 3 of this act for all other procurements that are more than one hundred thousand dollars.
     (g) The department is authorized to negotiate contracts for any amount without bid under (((e))) (g)(i) and (ii) of this subsection:
     (i) Emergency contracts, in order to make repairs to ferries or ferry terminal facilities or removal of such facilities whenever continued use of ferries or ferry terminal facilities constitutes a real or immediate danger to the traveling public or precludes prudent use of such ferries or facilities; and
     (ii) Single source contracts for vessel dry dockings, when there is clearly and legitimately only one available bidder to conduct dry dock-related work for a specific class or classes of vessels. The contracts may be entered into for a single vessel dry docking or for multiple vessel dry dockings for a period not to exceed two years.
     (2) The department shall proceed with the procurement of materials, supplies, services, and equipment needed for the support, maintenance, and use of a ferry, ferry terminal, or other facility operated by Washington state ferries, in accordance with chapter 43.19 RCW except as follows:
     (a) When the secretary of the department of transportation determines in writing that the use of invitation for bid is either not practicable or not advantageous to the state and it may be necessary to make competitive evaluations, including technical or performance evaluations among acceptable proposals to complete the contract award, a contract may be entered into by use of a competitive sealed proposals method, and a formal request for proposals solicitation. Such formal request for proposals solicitation shall include a functional description of the needs and requirements of the state and the significant factors.
     (b) When purchases are made through a formal request for proposals solicitation the contract shall be awarded to the responsible proposer whose competitive sealed proposal is determined in writing to be the most advantageous to the state taking into consideration price and other evaluation factors set forth in the request for proposals. No significant factors may be used in evaluating a proposal that are not specified in the request for proposals. Factors that may be considered in evaluating proposals include but are not limited to: Price; maintainability; reliability; commonality; performance levels; life cycle cost if applicable under this section; cost of transportation or delivery; delivery schedule offered; installation cost; cost of spare parts; availability of parts and service offered; and the following:
     (i) The ability, capacity, and skill of the proposer to perform the contract or provide the service required;
     (ii) The character, integrity, reputation, judgment, experience, and efficiency of the proposer;
     (iii) Whether the proposer can perform the contract within the time specified;
     (iv) The quality of performance of previous contracts or services;
     (v) The previous and existing compliance by the proposer with laws relating to the contract or services;
     (vi) Objective, measurable criteria defined in the request for proposal. These criteria may include but are not limited to items such as discounts, delivery costs, maintenance services costs, installation costs, and transportation costs; and
     (vii) Such other information as may be secured having a bearing on the decision to award the contract.
     (c) When purchases are made through a request for proposal process, proposals received shall be evaluated based on the evaluation factors set forth in the request for proposal. When issuing a request for proposal for the procurement of propulsion equipment or systems that include an engine, the request for proposal must specify the use of a life cycle cost analysis that includes an evaluation of fuel efficiency. When a life cycle cost analysis is used, the life cycle cost of a proposal shall be given at least the same relative importance as the initial price element specified in the request of proposal documents. The department may reject any and all proposals received. If the proposals are not rejected, the award shall be made to the proposer whose proposal is most advantageous to the department, considering price and the other evaluation factors set forth in the request for proposal.

NEW SECTION.  Sec. 5   This act may be known and cited as the ferry procurement modernization act of 2009.