Bill Summary for H 820 (2021-2022)

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Summary date: 

May 6 2021

Bill Information:

View NCGA Bill Details2021
House Bill 820 (Public) Filed Tuesday, May 4, 2021
Intro. by Arp, Stevens, Brody, Winslow.

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Bill summary

Makes the following changes to GS 143-128.1A, which governs design-build contracts. Adds to the defined terms: design professional; first-tier subcontractor; licensed contractor; licensed subcontractor; and unlicensed subcontractor. Modifies the alternative options for the statement a design-builder must include in its response to a governmental entity's request for qualifications as follows, with the governmental entity permitted to specify which option the statement must include. Requires either a list of the licensed contractors, licensed subcontractors, and design professionals (was, licensed design professionals) whom the design-builder proposes to use for the project's design and construction, or a list of the licensed contractors and design professionals whom the design-builder proposes to use for the project's design and construction and an outline of the strategy the design-builder plans to use for open subcontractor selection (was, open contractor and subcontractor selection) based on Article 8 (previously did not require a list in addition to the strategy outline option). In either case, now allows the design-builder to self-perform some or all of the work with employees of the design-builder. If using the first statement option, allows design-builders to enter into negotiated subcontracts to perform some or all of the work with licensed subcontractors without bidding and whether or not identified on the list, and allows the list to include one or more unlicensed subcontractors the design-builder proposes to use. Also allows for the design-builder to accept bids for the selection of one or more of its first-tier subcontractors under the first option, with or without the use of negotiated subcontracts. Explicitly prohibits the design-builder from entering into negotiated contracts with first-tier subcontractors under the second statement option. Specifies that the required certification of the design-builder regarding the qualification of each design professional on the design-build team must be included in the response to the request for qualifications in subsection (c), as amended.

Amends GS 143-128.1B concerning public design-build bridging contracts. Adds to the defined terms costs of the subcontractor work, general conditions, and licensed contractor. Prohibits requiring a design-builder to provide the costs of the subcontractor work, defined as the sum of all first-tier subcontract packages bid or proposed to be bid for all construction work under the statute, in the design criteria package, but permits requiring disclosure of the costs after the contract has been executed. Makes conforming changes. Adds to the required contents of the design criteria package the list of general conditions, as defined, prepared by the governmental entity for which the design-builder is to provide a fixed fee; the form of the contract to be entered into by the successful design-builder to whom the project is awarded, allowing for the contract to include (at the governmental entity's discretion) multiple phases, termination for convenience and rights arising from the contract, and subsequent setting of guaranteed maximum prices; and a statement directing each design-builder to submit in its response to the request for qualifications an explanation of its proposed plan for its good-faith compliance with GS 143-128.2, regarding minority business participation. Now requires the governmental entity's request for proposal to include a statement submitted in a separate sealed envelope, contemporaneously with the response to the RFP, the design builder's fixed fees, separately listed, and excluding the costs of the subcontractor work, for designing and constructing the project pursuant to the criteria of the governmental entity and terms and conditions set forth in the contract: the general conditions identified in the request for proposal, the general construction services not otherwise provided for, and the design-builder's design services necessary to complete the project. Concerning the required statement of project team selection and member qualification, refers to design professionals rather than licensed design professionals. 

Amends GS 143-129 to exclude from the provisions of Article 8, Public Contracts, contracts by a public entity with a design-builder executed pursuant to GS 143-128.1A or GS 143-128.1B, or with a private developer executed pursuant to GS 143-128.1C.

Makes the above provisions applicable to contracts entered into, amended, or renewed on or after October 1, 2021.

Enacts new GS 22B-5 deeming void provisions in lien waivers, releases, construction agreements or design professional agreement which purport to require a promisor to submit a waiver or release of liens or claims as a condition of receiving an interim or progress payments due from a promise under a construction agreement or a design professional agreement, unless the provision is limited to the specific interim or progress payment actually received by the promisor in exchange for the lien waiver. Provides two exceptions. Applies to liens attached on or after October 1, 2021.

Amends GS 44A-35, which authorizes the presiding judge over a suit brought or defended under the provisions of Article 2 or 3 of the Chapter (governing statutory liens on real property and model payment and performance bonds) to allow a reasonable attorneys' fee to the attorney representing the prevailing party. Replaces the definition provided for prevailing party to now define the term as the party whose monetary position at the commencement of the trial, arbitration, or hearing is closest to the amount of the judgement or arbitration award, determined by the court or arbitrator based upon the principal amount in controversy between the parties as of the commencement of the trial, arbitration, or hearing resulting in a judgement or arbitration award, considering all relevant facts and circumstances (previously defined as the plaintiff or third party who obtains a judgement exceeding a specified threshold, with an alternate definition for offers of judgement). Now provides for the attorneys' fee to be taxed as part of the court costs with the final judgement or arbitration award. No longer provides for payment of the attorneys' fee by the losing party upon finding that there was an unreasonable refusal by the losing party to fully resolve the matter of the suit or the basis of the defense. Adds the following. Explicitly requires a court or arbitrator to determine the prevailing party as specified in the term's new definition, with parameters given for inclusion of offers or judgement or settlement offers for calculating the amount in controversy. Lists relevant facts and circumstances to be considered in determining the amount of reasonable attorneys' fees and expenses, and allows a party to submit evidence relating to an award of attorneys' fees by affidavit or declaration. Also allows the court to admit other evidence such as live or deposition testimony. Permits submission of expert testimony to support an award. Applies to any claim arising on or after October 1, 2021.

Amends GS 22B-1, specifying that the exception provided for indemnity provisions in construction agreements or design professional agreements which are otherwise void applies to provisions providing for indemnification or holding harmless a promisee or the promisee's independent contractors, agents, employees, or indemnities against liability resulting from the negligence of any of those parties when the negligence of the promisee, the promisee's independent contractors, agents, employees, or indemnitees is not a proximate cause of the damages sought (was resulting from the sole negligence of those named parties, with no specification that such negligence not be the proximate cause of the damages sought). Applies to construction agreement and design professional agreements entered into on or after October 1, 2021.