A.R.S. tit. 34 ch. 1 — Arizona Revised Statutes Title 34 Chapter 1 — Employment Of Special Services

34-101. Definitions In this title, unless the context otherwise requires: 1. "Agent": (a) Means any county, city or town, or officer, board or commission of any county, city or town, and irrigation, power, electrical, drainage, flood protection and flood control districts, tax levying public improvement districts and county or city improvement districts. (b) Includes any county board of supervisors and any representative authorized by an agent to act as an agent for the purpose of authorizing necessary change orders to previously awarded contracts in accordance with guidelines established by rule of the agent, including the board of supervisors. 2. "Architect services" means those professional architect services that are within the scope of architectural practice as provided in title 32, chapter 1. 3. "Construction": (a) Means the process of building, altering, repairing, improving or demolishing any public structure or building or other public improvements of any kind to any public real property. (b) Does not include the routine operation, routine repair or routine maintenance of existing facilities, structures, buildings or real property. 4. "Construction-manager-at-risk" means a project delivery method in which: (a) There is a separate contract for design services and a separate contract for construction services, except that instead of a single contract for construction services, the agent may elect separate contracts for preconstruction services during the design phase, for construction during the construction phase and for any other construction services. (b) The contract for construction services may be entered into at the same time as the contract for design services or at a later time. (c) Design and construction of the project may be either: (i) Sequential with the entire design complete before construction commences. (ii) Concurrent with the design produced in two or more phases and construction of some phases commencing before the entire design is complete. (d) Finance services, maintenance services, operations services, preconstruction services and other related services may be included. 5. "Construction services" means either of the following for construction-manager-at-risk, design-build and job-order-contracting project delivery methods: (a) Construction, excluding services, through the construction-manager-at-risk or job-order-contracting project delivery methods. (b) A combination of construction and, as elected by the agent, one or more related services, such as finance services, maintenance services, operations services, design services and preconstruction services, as those services are authorized in the definitions of construction-manager-at-risk, design-build or job-order-contracting in this section. 6. "Contract" means all types of agent agreements, regardless of what they are called, for the procurement of services pursuant to this title. 7. "Contractor" means any person who has a contract with an agent. 8. "Design-bid-build" means a project delivery method in which: (a) There is a sequential award of two separate contracts. (b) The first contract is for design services. (c) The second contract is for construction. (d) Design and construction of the project are in sequential phases. (e) Finance services, maintenance services and operations services are not included. 9. "Design-build" means a project delivery method in which: (a) There is a single contract for design services and construction services, except that instead of a single contract for design services and construction services, the agent may elect separate contracts for preconstruction services and design services during the design phase, for construction and design services during the construction phase and for any other construction services. (b) Design and construction of the project may be either: (i) Sequential with the entire design complete before construction commences. (ii) Concurrent with the design produced in two or more phases and construction of some phases commencing before the entire design is complete. (c) Finance services, maintenance services, operations services, preconstruction services and other related services may be included. 10. "Design professional" means an individual or firm that is registered by the state board of technical registration pursuant to title 32, chapter 1 to practice architecture, engineering, geology, landscape architecture or land surveying or any combination of those professions and persons employed by the registered individual or firm. 11. "Design requirements": (a) Means at a minimum the agent's written description of the project or service to be procured, including: (i) The required features, functions, characteristics, qualities and properties. (ii) The anticipated schedule, including start, duration and completion. (iii) The estimated budgets applicable to the specific procurement for design and construction and, if applicable, for operation and maintenance. (b) May include: (i) Drawings and other documents illustrating the scale and relationship of the features, functions and characteristics of the project, which shall all be prepared by a design professional who is registered pursuant to section 32-121. (ii) Additional design information or documents that the agent elects to include. 12. "Design services" means architect services, engineer services or landscape architect services. 13. "Direct selection" means the selection of a technical registrant without the requirement of advertising or the use of a current register. 14. "Engineer services" means those professional engineer services that are within the scope of engineering practice as provided in title 32, chapter 1. 15. "Finance services" means financing for a construction services project. 16. "Horizontal construction" means construction of highways, roads, streets, bridges, canals, floodways, earthen dams, landfills, light rail and airport runways, taxiways and aprons. For the purposes of this paragraph, light rail does not include any related rail stations, maintenance facilities or parking facilities. 17. "Job-order-contracting" means a project delivery method in which: (a) The contract is a requirements contract for indefinite quantities of construction. (b) The construction to be performed is specified in job orders issued during the contract. (c) Finance services, maintenance services, operations services, preconstruction services, design services and other related services may be included. 18. "Landscape architect services" means those professional landscape architect services that are within the scope of landscape architectural practice as provided in title 32, chapter 1. 19. "Maintenance services" means routine maintenance, repair and replacement of existing facilities, structures, buildings or real property. 20. "Materials": (a) Means all property, including equipment, supplies, printing, insurance and leases of property. (b) Does not include land, a permanent interest in land or real property or leasing space. 21. "Operations services" means routine operation of existing facilities, structures, buildings or real property. 22. "Person" means any corporation, business, individual, union, committee, club, other organization or group of individuals. 23. "Preconstruction services" means services and other activities during the design phase. 24. "Procurement": (a) Means buying, purchasing, renting, leasing or otherwise acquiring any materials, services, construction or construction services. (b) Includes all functions that pertain to obtaining any materials, services, construction or construction services, including description of requirements, selection and solicitation of sources, preparation and award of contract and all phases of contract administration. 25. "Public competition" means a competitive procurement process pursuant to section 34-103, subsection G that includes advertising in a public newspaper and a qualification-based selection process. 26. "Services": (a) Means the furnishing of labor, time or effort by a contractor or subcontractor that does not involve the delivery of a specific end product other than required reports and performance. (b) Does not include employment agreements or collective bargaining agreements. 27. "Subcontractor" means a person who contracts to perform work or render service to a contractor or to another subcontractor as a part of a contract with an agent. 28. "Technical registrant" means a person who provides any of the professional services listed in title 32, chapter 1. 34-102. Multiple contracts; professional services A. For professional services that are provided by a technical registrant, an agent may procure and award multiple contracts from a single solicitation under section 34-103 or chapter 6 of this title, as applicable, except that professional services that are part of design-build construction services may not be procured under this subsection. Each of the multiple contracts for professional services that are procured in a procurement must have a term not exceeding five years after the date of the contract award of the first contract under the procurement and may continue in effect after the five year term for professional services on projects commenced within the five year term. B. In a solicitation for multiple contracts for professional services by technical registrants, the agent may award all of the multiple contracts to one contractor or may award the multiple contracts to multiple contractors. C. Multiple contracts for the same job-order-contracting construction services to be awarded to separate persons or firms may be procured in a single solicitation as provided in section 34-604. 34-103. Employment of technical registrants for work on public buildings and structures; direct selection; final list selection; public competition A. An agent shall procure professional services from a technical registrant in the manner prescribed in chapter 6 of this title if the contract is for an amount of more than five hundred thousand dollars. B. An agent may procure professional services from a technical registrant in the manner prescribed in chapter 6 of this title or as prescribed in subsection D of this section if the contract is for an amount of five hundred thousand dollars or less. C. If authority is given by law to an agent to construct a building or structure, or additions to or alterations of existing buildings, the agent shall employ an architect or engineer, or both, as warranted by the type of construction, if the agent deems the work to be of a nature that requires such employment. D. An agent may employ a technical registrant by direct selection, by public competition pursuant to subsection G of this section or pursuant to subsections E and F of this section if the contract is for an amount of five hundred thousand dollars or less. E. The agent may elect to employ a technical registrant or technical registrants by encouraging persons or firms engaged in the lawful practice of the profession to submit annually a statement of qualifications and experience. If the agent elects to employ a technical registrant or technical registrants by this method, the agent shall initiate an appropriately qualified selection committee for each procurement, which may include one contract or multiple contracts, in accordance with rules adopted by the agent. The amount of each contract in a single procurement under this subsection and subsection F of this section shall not exceed the dollar amount limits in subsections B and D of this section. The selection committee shall evaluate current statements of qualifications and experience on file with the agent together with those that may be submitted by other persons or firms regarding the procurement. If possible and practicable, the selection committee shall conduct interviews regarding the procurement and the relative methods of furnishing the required services and, if possible, shall select, in order of preference and based on criteria established and published by the selection committee, one or more final lists of the persons or firms deemed to be the most qualified to provide the services required. The selection committee shall base the selection of each final list and the order of preference on each final list on demonstrated competence and qualifications only. The agent and the selection committee shall not request or consider fees, price, man-hours or any other cost information at any point in the selection process under this subsection, including the selection of the persons or firms to be interviewed, the selection of the persons and firms to be on a final list, in determining the order of preference of persons and firms on a final list or for any other purpose in the selection process. If the procurement is for: 1. A single contract or if the procurement is for multiple contracts to be awarded to a single person or firm, there shall be one final list of at least three but no more than five persons or firms. 2. Multiple contracts for different technical registrant services to be awarded to separate persons or firms, there shall be a separate final list for each type of technical registrant services and the number of persons or firms on each final list shall be the number of contracts for each type of technical registrant service plus another number that is determined by the agent and that is not more than five. 3. Multiple contracts for similar technical registrant services to be awarded to separate persons or firms, there shall be one final list and the number of persons or firms on the final list shall be the number of contracts plus another number that is determined by the agent and that is not more than five. F. After each final list is selected pursuant to subsection E of this section, the agent shall enter into negotiations with the highest qualified person or firm on each final list or, in the case of a final list for multiple contracts to be awarded to separate persons or firms, the agent shall enter into negotiations with a number of the highest qualified persons or firms on a final list equal to the number of contracts that may or will be awarded. The negotiations shall include consideration of compensation and other contract terms that the agent determines to be fair and reasonable to the agent. In making this determination, the agent shall take into account the estimated value, the scope, the complexity and the nature of the professional services to be rendered. If the agent is not able to negotiate a satisfactory contract with a person or firm with which the agent is negotiating at a price and on other contract terms the agent determines to be fair and reasonable, the agent shall formally terminate negotiations with that person or firm. The agent may enter into negotiations with the next most qualified person or firm on the final list in sequence until an agreement is reached or a determination is made to reject all persons or firms on the final list. If the agent terminates negotiations with a person or firm on a final list and commences negotiations with another person or firm on a final list, the agent shall not in that procurement recommence negotiations or enter into the single contract or multiple contracts for the technical registrant services covered by that final list with any person or firm on that final list with whom the agent has terminated negotiations. G. If competitive designs are solicited, the agent shall publish notice of the competition at least thirty days before the date set for closing the competition. The notice shall include the following: 1. The project title and description. 2. The design and construction budget. 3. The competitive process and criteria to be used to select the winning offeror. 4. The amount of the stipend to be paid to the unsuccessful offerors. 5. The offerors' response date. 6. The person to contact to obtain additional information regarding the competition. 7. Any other requirements established by the agent as appropriate. 34-104. Contract with architect; proprietary specifications; penalty; compensation A. The architect employed shall execute with the agent a contract to prepare working drawings and details and specifications for the proposed project, and to supervise its construction, unless the agent does not employ the architect to supervise the work. B. An architect shall not use and the agent shall not allow the use of bidding, contracting or purchasing specifications proprietary to one supplier, distributor or manufacturer unless the specification includes both of the following: 1. A description of the essential characteristics of the products so specified. 2. A statement indicating the intent to consider alternative products which have the desired essential characteristics if such alternative products are identified. C. Persons desiring to submit alternative product proposals for prior approval of the architect shall submit such proposals at least eight days prior to the original deadline for receiving bids. The architect shall consider and either approve or reject all proposals submitted and shall comply with the following requirements: 1. If, by the close of the fifth day prior to the deadline for receiving bids, the architect has approved any alternative product proposals, the bidding documents shall be modified to include the alternative products. The architect shall publish the modification in the same manner as the original bidding documents at least five days prior to the bidding deadline. 2. If the architect rejects an alternative product proposal, he shall give notice of the rejection to the agent prior to the deadline for receiving bids. Notice shall include a description of the rejected product. D. A person who knowingly uses or allows the use of a bidding, contracting or purchasing specification proprietary to one supplier, distributor or manufacturer in violation of subsection B or fails to publish any alternate product as provided in subsection C, paragraph 1, or fails to give notice of rejection of an alternate proposal to the agent as provided in subsection C, paragraph 2 is liable for a civil penalty in an amount not to exceed twenty-five thousand dollars for each violation. The attorney general shall bring an action to recover such penalty in the name of this state in the superior court in the county in which the violation occurred. E. If in the agent's judgment a satisfactory proposal is not received for construction of the project completely finished in accordance with the accepted plans and specifications, then the architect shall revise the scope or quality of the project, or both, as necessary to obtain a satisfactory proposal to construct the project. F. If the proposed project is abandoned or suspended for a period of more than one hundred eighty days through no fault of the architect, he shall be compensated. 34-105. Guaranteed energy cost savings contracts; definitions A. An agent may contract for the procurement of a guaranteed energy cost savings contract with a qualified provider. B. An agent may enter into a guaranteed energy cost savings contract with a qualified provider if the agent determines that the amount the agent would spend on the energy cost savings measures recommended in the proposal would not exceed the amount to be saved in energy costs over the expected life, according to the manufacturer's equipment standards, of the energy cost savings measures implemented, the term of the financial agreement or twenty-five years, whichever is shortest, after the date that installation or implementation is complete, if the recommendations in the proposal are followed. An agent shall retain the cost savings achieved by a guaranteed energy cost savings contract, and these cost savings may be used to pay for the contract and project implementation. C. An agent shall use objective criteria in selecting the qualified provider, including the cost of the contract, the energy savings, the net projected energy savings, the quality of the technical approach, the quality of the project management plan, the financial solvency of the qualified provider and the experience of the qualified provider with projects of similar size and scope. An agent shall state each criterion with its relevant order of importance in the request for proposal. D. In selecting a contractor to perform any construction work related to performing the guaranteed energy cost savings contract, the qualified provider may develop and use a prequalification process for contractors. These prequalifications may require the contractor to demonstrate that the contractor is adequately bonded to perform the work and that the contractor has not failed to perform on a prior job. E. The selected qualified provider shall perform a study in order to establish the exact scope of the guaranteed energy cost savings contract, the fixed cost savings guarantee amount and the methodology for determining actual savings. The agent shall review and approve this report before the actual installation of any equipment. The qualified provider shall transmit a copy of the approved study to the department of administration. F. The guaranteed energy cost savings contract shall require that in determining whether the projected energy savings calculations have been met, the energy costs savings shall be computed by comparing the energy baseline before installation or implementation of the energy cost savings measures with the energy consumed after installation or implementation of the energy cost savings measures. The qualified provider and the agent may agree to make modifications to the energy baseline only for any of the following: 1. Changes in utility rates. 2. Changes in the number of days in the utility billing cycle. 3. Changes in the square footage of the facility. 4. Changes in the operational schedule of the facility. 5. Changes in facility temperature. 6. Significant changes in the weather. 7. Significant changes in the amount of equipment or lighting utilized in the facility. 8. Significant changes in the nature or intensity of energy use such as the change of classroom space to laboratory space. G. The information to develop the energy baseline shall be derived from historical energy costs or actual energy measurements or shall be calculated from energy measurements at the facility where energy cost savings measures are to be installed or implemented. The baseline shall be established before the installation or implementation of energy cost savings measures. H. When submitting a proposal for the installation of equipment, the qualified provider shall include information on the projected energy savings associated with each proposed energy cost savings measure. I. An agent, or two or more agents, may enter into a financing agreement with a qualified provider or the financial institution, trustee or paying agent for the purchase and installation or implementation of energy cost savings measures. The guaranteed energy cost savings contract may provide for payments over a period of not more than the expected life, according to the manufacturer's equipment standards, of the energy cost savings measures implemented, the term of the financial agreement or twenty-five years, whichever is shortest. The contract shall provide that all payments, except obligations on termination of the contract before its expiration, shall be made pursuant to the terms of the agreement. If an agent purchases the energy cost savings measure, the qualified provider shall guarantee that the energy cost savings meet or exceed the agent's total cost of purchase. J. The guaranteed energy cost savings contract shall include a written guarantee of the qualified provider that the energy cost savings will meet or exceed the costs of the energy cost savings measures over the expected life, according to the manufacturer's equipment standards, of the energy cost savings measures implemented, the term of the financial agreement or twenty-five years, whichever is shortest, except as provided in subsection I of this section. The qualified provider shall: 1. For the term of the contract, prepare a measurement and verification report on an annual basis in addition to an annual reconciliation of savings. 2. Reimburse the agent for any shortfall of guaranteed energy cost savings on an annual basis. 3. Use the international performance and measurement and verification protocol standards or the federal energy management program standards to validate the savings guarantee. K. The agent may obtain any required financing as part of the original competitive sealed proposal process from the qualified provider or a third-party financing institution. L. A qualified provider that is awarded the contract shall give a sufficient bond to the agent for its faithful performance of the equipment installment. M. This section does not apply to the construction of new buildings. N. An agent may use a simplified energy performance contract for projects less than $500,000. Simplified energy performance contracts are not required to include an energy savings guarantee and shall comply with all requirements in this section except for the requirements that are specifically related to the energy savings guarantee and the measurement and verification of the guaranteed savings. O. An agent may elect to use a shorter capital repayment schedule than required pursuant to this section. P. For the purposes of this section: 1. "Agent" has the same meaning prescribed in section 34-101 but also includes a community college district organized under title 15, chapter 12, the department of administration and the Arizona board of regents. 2. "Construction" means the process of building, altering, repairing, improving or demolishing any structure or building, or other public improvements of any kind to any real property. Construction does not include the routine operation, routine repair or routine maintenance of existing structures, buildings or real property. 3. "Energy baseline" means a calculation of the amount of energy used in an existing facility before the installation or implementation of the energy cost savings measures. 4. "Energy cost savings" means one or both of the following: (a) An estimated reduction in net fuel costs, energy costs, water costs, stormwater fees, or other utility costs, or related net operating costs, including costs for anticipated equipment replacement and repair, from or as compared to an established baseline of those costs. (b) An estimate revenue increase associated with additional facility use or the use of improved meters or other measuring devices due to improvements included in the guaranteed energy cost savings contract. 5. "Energy cost savings measure" means a training program or facility alteration designed to reduce energy consumption and may include one or more of the following, and any related meters or other measuring devices: (a) Insulating the building structure or systems in the building. (b) Storm windows or doors, caulking or weather stripping, multiglazed windows or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption. (c) Automated or computerized energy control systems. (d) Heating, ventilating or air conditioning system modifications or replacements, including ground source heat pumps. (e) Replacing or modifying lighting fixtures to increase the energy efficiency of the lighting system without increasing the overall illumination of a facility unless an increase in illumination is necessary to conform to the applicable state or local building code for the lighting system after the proposed modifications are made. (f) Indoor air quality improvements to increase air quality that conform to the applicable state or local building code requirements. (g) Energy recovery systems. (h) Installing a new or retrofitting an existing day lighting system. (i) Procurement of low-cost utility supplies of all types, including electricity, natural gas, propane and water. (j) Devices that reduce water consumption and water costs or that reduce sewer charges. (k) Rainwater harvesting systems. (l) Combined heat and power systems. (m) Renewable and alternative energy projects and renewable energy power service agreements. (n) Self-generation systems. (o) Any additional building systems and infrastructure that produce energy, or that provide utility cost savings not specifically mentioned in this paragraph, if the improvements meet the life cycle cost requirement and enhance building system performance or occupant comfort and safety. (p) Geothermal. 6. "Life cycle cost" means the sum of the present values of investment costs, capital costs, installation costs, energy costs, operating costs, maintenance costs and disposal costs and utility rebates over the life of the project, product or measure as provided by federal life cycle cost rules, regulations and criteria contained in the United States department of energy federal energy management program "guidance on life-cycle cost analysis" required by executive order 13423, January 2007. 7. "Qualified provider" means a person or a business that is experienced in designing, implementing or installing energy cost savings measures, that has a record of established projects or measures of similar size and scope, that has demonstrated technical, operational, financial and managerial capabilities to design and operate cost savings measures and projects and that has the financial ability to satisfy guarantees for energy cost savings.