Public Contracts/Construction Methods/DB/P3

Building Inspections/Local Consistency

Reinstate 2009 Energy Conservation Code

Protect/Promote Locally Sourced Building Materials

Energy Savings Contracting Amendments

Onslow County Public Private Partnership

Municipal Services

Clinton/Use Design Build Method

Capital Construction

 Don’t forget - E-Verify!

For a printer friendly version 
please click HERE.

Don’t miss Representative Dean Arp, PE at his session discussing "The Changes that Design Build and Public Private Partnerships will bring to the Design Industry"
at the PENC Regional Conference in Charlotte – August 29th. 

Click HERE to Register!


2013 Legislative Session in Review – What it Means for Engineering

Betsy Bailey
PENC Lobbyist

 Wednesday & Thursday 
August 21 – August 22

Noon – 1:00pm each day

1 PDH per webinar

 Available ONLY to PENC Members

 You Must Log-In To See the Webinar in the
Online Store and to Register

PENC Leadership
William A. Roberts, PE
Duke Energy

Neil T. Deans, PE
Kimley-Horn & Associates

Past President
William G. "Gus" Simmons, PE
Cavanaugh & Associates PA

Mark McIntire, PE, BCEE, CRM 
Duke Energy

Nathan Epling, PE
Blue Ridge Parkway

Directors At Large:
Paul Shivers, PE
Highfill Infrastructure

Susan Habina Woolard, PE
City of Charlotte Department of Transportation

Tom Bach, PE
Water and Sewer Authority of Cabarrus County

CEO & Executive Vice President:

Betsy Bailey, CAE
Professional Engineers
of North Carolina

(919) 834-1144

Professional Engineers
of North Carolina

1015 Wade Avenue, Suite A

Raleigh, NC 27605




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Working closely with other stakeholders like Dave Crawford with AIA and Dave Simpson of Carolinas AGC, PENC and ACEC NC, were able to achieve important legislative victories for the design and construction industry.   Most importantly, our team was successful in crafting major statewide legislation that enables governmental entities to use three new construction delivery methods that ensure open and fair competition and a qualifcations based selection process, eliminating the ability for governmental entities to exempt themselves from QBS.

A big thank you to our friends with AIA, Carolina AGC and Representative Dean Arp, PE!

This review contains the Engineering Construction highlights from this past legislative session.

HB 857 – Public Contracts/Construction Methods/DB/P3
Click HERE

HB 857, sponsored by Representative Dean Arp, PE, a freshman Professional Engineer representing Union County, was the signature piece of legislation for the design and construction industry.  Supported and championed by PENC, ACECNC and AIA, and working closely with the Carolinas AGC, this consensus bill represented the efforts of 15 stakeholders and authorized three new methods of building/financing for construction of public buildings:  (the bill applies ONLY to non-transportation infrastructure)

  •  Design-Build
  • Design-Build Bridging
  • Public Private Partnerships

What the Bill Does:

  1. Allows additional construction delivery options for local and state government through design-build, design build bridging and public private partnerships eliminating the need for individual local government legislation seeking this authority.  This legislation was one of the key initiatives supported by the NC League of Municipalities and the NC Association of County Commissioners.
  2. Adds flexibility in construction contracting to provide cost efficient public facilities.
  3. Ensures fair, equitable, open transparent and quality based design and contracting procedures where public funds are being used.
  4. Ensures Quality Based Selection is the primary criteria used in the selection process.  Most importantly for Engineers and Architects, the government exemption often used by local governments and NCDOT to exempt themselves from QBS at their sole discretion HAS BEEN ELIMINATED for projects over $50,000.  Projects where the estimated professional fee is at or below the $50,000 threshold for procurement of architectural, engineering and surveying services may be exempt from QBS.

Explanation of Bill Sections:

Adds three new contracting options:

  1. Design Build
  2. Design-Build Bridging
  3. Public Private Partnerships – Primarily a financing Mechanism rather than a method of construction delivery

All three methods require that the governmental entity provide sufficient justification for using these methods;  have adequate oversight and financial resources; and comply with reporting requirements as specified in the bill.


  1. For procurement of architectural, engineering and surveying services, increases the threshold for exemption from the required bidding from $30,000 to $50,000 when the estimated professional fee is at or below that amount. 
  2. Eliminates the exemption of those projects determined in the sole discretion of the Department of Transportation or a unit of local government to be exempt.

Adds the three new construction delivery/financing methods to those that already exist in statute.  (single prime, CM at Risk, etc.)

This section of the bill includes definitions of the three new delivery methods and specifies the procedures that should be used:

  1. Design-Build QBS (143.128.1A)
  • Allows the design builder to offer complete services through a pure qualifications based process


  • Allows the design-builder to offer services through traditional bidding of subcontractors
  1.  Design Build Bridging – (1430128.1B)
Uses a hybrid approach of qualifications and traditional bidding.  This procedure will most likely be used by State Construction and the UNC System and mirrors the current policy they have in place.
  • Designer is selected to do a minimal set of plans
  • Design-Builder selected based on qualifications and price
  • All subs are selected based on traditional bidding
  1.  Public Private Partnership Contracts (143.128.1C)
  • Calls for public entity to declare in open meeting intention to enter into a Public Private Partnership
  • Requires approval of any P3 debt by Local Government Commission or State Treasurer
  • Outlines Bond/Lien provisions
  • Allows for developers to decide, based on economic and local conditions, what construction delivery model is best used for the proposed project.
  • Requires the contract terms with the private developer to be reviewed at a public meeting and be open for public inspection.

Adds the same small business consideration language used in the new design build methods to the existing Construction Manager at Risk Statute.

Adds Bond/Liens Discharge Procedures under 44A-16 for P3 Project Delivery Method

Provides for prototype provisions for K-12 schools.

Requires a Purchase and Contract Study Committee to look at Prequalification issues around existing traditional single-multi-prime and Construction Manager at Risk bidding

  • Must look at whether there is a fair, open, level playing field for all contractors
  • Should ensure access to all NC Qualified General Contractors to do this work

Law is effective 30 days after it becomes law and does not apply to local bills already enacted.

This bill has been ratified and presented to the Governor on July 25th for his signature.  The Governor has not signed this bill but has 30 days to either sign or veto the bill.  If he takes no action, the bill automatically becomes law.

What it Means for Engineers – The most important piece of this legislation for Professional Engineers is the strong foundation it establishes for Qualify Based Selection of not just the designers but the entire design build team.  Additionally, it eliminates the ability of local governments and NCDOT to exempt itself from Quality Based Selection unless the project estimated fee is at or below $50,000. 

HB 120 (Hager, Brawley, Arp) – Building Inspections/Local Consistency Click HERE

HB 120, requested by the NC Homebuilders, would prohibit local governments from conducting building code inspections for homes beyond those required under the state Building Code unless those local governments receive permission from the State Building Code Council.  The bill would also extend the time for routine changes to the building code from a three year cycle to a six year cycle for residential construction only.  Supporters say the legislation will hold down building costs by limiting changes to the state building code and create uniformity in building inspections for homes.  Critics argue that the changes to the building code cycle would put NC out of step with other states and behind the national standards for energy efficiency and storm readiness.   The bill has been signed by the Governor and is now law.

What It Means for Engineers – Professional Engineers involved in residential construction work and PEs working in local government code enforcement need to be aware of the local building code changes and the new code cycle.  Additionally, while this law currently only applies to residential construction, it is conceivable that the code cycle change from 3 to 6 years could be considered for commercial construction in the future.

HB 201 (Torbett) – Reinstate 2009 Energy Conservation Code
Click HERE

One bill that appeared to be on a fast track to passage but got abruptly halted in the final days of the legislative session was HB 201 that would have scaled back energy efficiency standards for commercial buildings adopted last year. The legislation, already having House approval and approval from Senate Commerce  would have meant that energy efficiency standards for new commercial buildings would go back to 2009 requirements. Rep. John Torbett, R-Gaston, a sponsor of the bill, said he continues to hear from builders that the 2012 North Carolina Energy Conservation Code is increasing building costs. However, opponents of the bill, including manufacturers of energy efficient building materials argued that energy efficient standards help create jobs and do not always cost more money. An Appalachian State University study found that the standards would cost $900 million in additional construction costs over the next 30 years while saving roughly $2 billion in energy costs.

The measure appears to have split commercial building contractors themselves. Dave Simpson, a lobbyist for the Carolinas Association of General Contractors, told legislators that members of the group have different opinions, but that many are worried about the lack of construction activity.

Senate leadership also appeared to be split and referred the bill to Senate Rules where it still resides.  The bill, therefore, does not become law but is eligible for consideration in the 2014 short session. 

What It means for Engineers – Nothing right now as the legislation did not pass.  However, expect another round of controversy next year when the bill is eligible for reconsideration.  PENC is opposed to the bill and would welcome feedback and information from our members who could be affected by this proposed legislation. 

HB  628 (Presnell) Protect/Promote Locally Sourced Building Materials
Click HERE

This legislation began with the stated intent of protecting North Carolina timber producers by requiring that sustainable building standards not disadvantage or forbid the use of building materials produced in this State.  The language of the bill went on to broaden the scope of the stated intent by, in effect, disallowing the entire use of the LEED Green Building rating system for state construction projects.  Many stakeholders, including ASHRAE, USGBC, Concrete, Steel, Architects and Engineers disagreed with the effect of the elimination of LEED in state buildings and requested amendments to preserve the LEED rating system.  The legislation was amended in the Senate Agriculture and Environment committee to permit such projects if they cut long-term energy costs and permit North Carolina building materials in construction.  (LEED does not consider most North Carolina lumber to be sustainably farmed, and that, according to the timber industries, puts the state's timber companies at a disadvantage.)

Under an amendment offered by Sen. Tommy Tucker, R-Union, the bill  will now allow state and local government agencies to pursue LEED certification if buildings could use such ratings systems that do not "put North Carolina materials at a disadvantage.”  However, another surprising provision that was added in exchange for the sponsor’s agreement to the LEED section now requires an energy payback period of 10 years.  This bill has been signed by the Governor.

What It Means for Engineers – While PENC was pleased to have been involved with the ultimate resolution to the anti-LEED sections of this bill, we are opposed to the last minute “net savings – payback period” that will ultimately disadvantage the sustainable building industry.  During the interim, we will be working with stakeholders and our members to determine if we can amend this legislation during the 2014 short session.

SB 547 (Hunt) - Energy Savings Contracting Amendments
Click HERE

SB 547 amends the statues governing guaranteed energy savings contracts for governmental units.  Specifically, the bill makes changes to the solicitation of guaranteed energy savings contracts requiring that a “qualified reviewer” evaluate preliminary proposals.  The qualified reviewer is defined as an architect or engineer who Is 1) licensed in the state and 2) experienced in the design, implementation, and installation of energy efficiency measures.  The statute also specifies that a “qualified provider” means a person or business experience in the design, implementation and installation of energy conservation measures who has been prequalified by the State Energy Office according to their prequalification criteria and specifies criteria and the process of selection of a Provider. 

UNC’s Board of Governors may authorize NC State University and the University of NC at Charlotte to implement an energy conservation measure without entering into a guaranteed energy savings contract.  This bill has been ratified but not yet signed by the Governor. 

What It Means for Engineers – The change in the law from simply  requiring a licensed architect or engineer to review and evaluate energy savings contracts to requiring that licensed designers also be experienced in installation of energy efficiency measures i.e.,  Qualified Reviewers ensures that the most qualified designers will be reviewing these contracts and is consistent with our strong support of Qualify Based Selection.   

Design Build Bills

Although many local Design Build bills were pre-empted by the statewide Design Build Legislation – HB 857 -  a few were enacted:

SB 75 (Brown) – Onslow County Public Private Partnership
Click HERE

This bill authorizes Onslow County to enter into a Public Private Partnership for construction of their Health and Human Services facility.  Introduced early in the session, the legislation was crafted with the input and agreement of PENC, Carolinas AGC, AIA and was used as the template from which the Public Private Partnership section of the statewide bill – HB 857 – was crafted.   This bill has been signed by the Governor.

SB 315 – Municipal Services 
Click HERE

This annexation bill for the City of Durham annexes certain developments within the City of Durham including the controversial 751 project.  Additionally, it authorizes the design build delivery method for a new police station and annex and a 911 call center facility and allows Durham to construct water treatment plants and wastewater treatment plants without complying with specific provisions of Article 8 of Chapter 143. 

This bill has been ratified but not yet signed by the Governor.

SB 111 (Jackson) – Clinton/Use Design Build Method
Click HERE

This bill allows the City of Clinton to use the Design Build method of construction for city owned buildings and has been signed by the Governor. 

Capital Construction

$480 million was approved for UNC System self-liquidating projects to cover dormitories and other fee-driven projects. Funding also is provided for $68.9 million for water resources projects as well as millions for other projects – Click HERE

Don’t forget - E-Verify!

Starting July 1, thousands of small businesses in North Carolina are required to use an Internet-based system to verify that new hires are eligible to work in the U.S. Under the state law, every business with more than 25 full-time employees will have to run new employees’ information through a federal system known as E-Verify. An employer enters an employee’s name, Social Security number, address and date of birth into a system that matches it with other federal data. Employees whose information runs through without a discrepancy are cleared to work. Employees whose names are flagged have eight days to start an appeal. After that, any business that continues to employ someone deemed ineligible will be warned, then fined by the N.C. Department of Labor.

The law comes at a time when the state’s unemployment rate is among the nation’s highest and immigration overhaul measures are being considered by Congress. The last phase also goes into effect on the same day that federal extended unemployment benefits end for more than 70,000 jobless North Carolinians. The legislator that sponsored the bill argues that the E-Verify legislation could help reduce the state’s high unemployment by making it harder for undocumented workers to take jobs that North Carolinians could fill. Some critics contend it’s just more paperwork and that it will dry up jobs in sectors, such as construction, that are critical to the economic recovery.

As always, if you have any questions, please contact me at or 919-834-1144 ext. 1