BILL NUMBER: SB 1026	CHAPTERED
	BILL TEXT

	CHAPTER  1
	FILED WITH SECRETARY OF STATE  JANUARY 13, 2006
	APPROVED BY GOVERNOR  JANUARY 13, 2006
	PASSED THE SENATE  JANUARY 9, 2006
	PASSED THE ASSEMBLY  SEPTEMBER 8, 2005
	AMENDED IN ASSEMBLY  SEPTEMBER 8, 2005
	AMENDED IN ASSEMBLY  SEPTEMBER 7, 2005
	AMENDED IN ASSEMBLY  AUGUST 25, 2005
	AMENDED IN ASSEMBLY  AUGUST 22, 2005

INTRODUCED BY   Senator Kuehl
   (Coauthors: Assembly Members Pavley and Levine)

                        FEBRUARY 22, 2005

   An act to add and repeal Article 6.9 (commencing with Section
20209.20) of Chapter 1 of Part 3 of Division 2 of the Public Contract
Code, relating to public contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1026, Kuehl  Highway construction contracts: design-build
projects.
   Existing law makes the Department of Transportation responsible
for improving and maintaining the state highway system. Under
existing law, until January 1, 2010, the department is authorized to
utilize design sequencing as an alternative contracting method for
the design and construction of not more than 12 transportation
projects.
   This bill would authorize the Los Angeles County Metropolitan
Transportation Authority, until January 1, 2010, in consultation with
the department, to use a specified design-build procurement process
for the construction of a high-occupancy vehicle lane in the County
of Los Angeles designated in the National Corridor Infrastructure
Improvement Program, the federal "Safe, Accountable, Flexible,
Efficient Transportation Equity Act," if certain conditions are
satisfied.
   This bill would require design-build entity bidders to provide
certain information in a questionnaire submitted to the authority
that is verified under oath. Because a verification under oath is
made under penalty of perjury, the bill would create a new crime and
impose a state-mandated local program. After a contract is awarded,
the bill would require the authority to report to a specified
committee of the Legislature regarding implementation of the
design-build process.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Article 6.9 (commencing with Section 20209.20) is added
to Chapter 1 of Part 3 of Division 2 of the Public Contract Code, to
read:

      Article 6.9.  Transportation Design-Build Contracts

   20209.20.  The Legislature finds and declares all of the
following:
   This project is subject to the existing process under the state
transportation improvement program (Chapter 2 (commencing with
Section 14520) of Part 5.3 of Division 3 of the Government Code) or
the traffic congestion relief program (Chapter 4.5 (commencing with
Section 14556) of Part 5.3 of Division 3 of the Government Code), as
applicable, for planning, programming, environmental clearance, and
funding. The project must comply with all existing requirements under
the state transportation improvement program or the traffic
congestion relief program, as applicable, for project development and
funding. This article shall not confer any type of competitive
advantage upon the project in this article, relative to other
projects subject to the state transportation improvement program,
during other phases of project development.
   20209.22.  For the purposes of this article, the following
definitions apply:
   (a) "Authority" means the Los Angeles County Metropolitan
Transportation Authority.
   (b) "Department" means the Department of Transportation.
   (c) "Design-build" means a procurement process in which both the
design and construction of a project are procured from a single
entity.
   (d) "Design-build entity" means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.
   (e) "Project" means the construction of a high-occupancy vehicle
lane in the County of Los Angeles designated in the National Corridor
Infrastructure Improvement Program as established in Section 1302 of
HR 3, the federal "Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users," signed into law by
the President on August 10, 2005.
   20209.23.  The authority may utilize the design-build procurement
method for the construction of a high-occupancy vehicle lane in the
County of Los Angeles designated in the National Corridor
Infrastructure Improvement Program as established in Section 1302 of
HR 3, the federal "Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users," signed into law by
the President on August 10, 2005.
   20209.24.  The authority shall implement a labor compliance
program as described in Section 1771.5 of the Labor Code, or it shall
contract with a third party to implement on the authority's behalf a
labor compliance program subject to that statute. This requirement
does not apply to any project where the authority or the design-build
entity has entered into any collective bargaining agreement or
agreements that bind all of the contractors performing work on the
projects.
   20209.26.  Bidding for the project shall progress as follows:
   (a) (1) The authority, with the approval of the department, shall
prepare or cause to be prepared, a set of documents setting forth the
scope of the project, as set forth in this subdivision.
   (2) The department shall prepare documents that may include, but
need not be limited to, the size, type, and desired design character
of the project, performance specifications covering the quality of
materials, equipment, and workmanship, preliminary plans, and any
other information deemed necessary to describe adequately the
authority's needs. The performance specifications and any plans,
preliminary engineering, environmental documents, prebid services,
and project reports shall be performed by employees of the
department. The preliminary engineering and project reports shall be
performed by professional engineers employed by the department.
   (b) Based on the documents prepared under subdivision (a), the
authority shall prepare a request for qualifications that invites
interested parties to submit qualifications in the manner prescribed
by the authority. The request for qualifications shall include, but
need not be limited to, the following elements:
   (1) Identification of the basic scope and needs of the project or
contract, the expected cost range, the methodology that will be used
by the authority to evaluate qualifications, the process for
selecting from among prequalified parties the lowest responsible
bidder, and any other information deemed necessary by the authority
to inform interested parties of the contracting opportunity.
   (2) Significant factors that the authority shall consider in
evaluating qualifications, including cost or price lifecycle costs
over 15 years or more, technical design and construction expertise,
skilled labor force availability, and all other nonprice related
factors. As used in this paragraph, "skilled labor force availability"
shall be determined by the existence of an agreement with a
registered apprenticeship program, approved by the California
Apprenticeship Council, that has graduated at least one apprentice in
each of the preceding five years. This graduation requirement shall
not apply to programs providing apprenticeship training for any craft
that was first deemed by the Department of Labor and the Department
of Industrial Relations to be an apprenticeable craft within the five
years prior to the effective date of this article.
   (3) The relative importance of the weight assigned to each of the
factors identified in the request for qualifications.
   (4) If the authority reserves the right to hold discussions with
prequalified bidders, it shall so specify in the request for
qualifications and shall publish separately or incorporate into the
request for qualifications applicable rules and procedures to be
observed by the authority to ensure that any discussions or
negotiations are conducted in good faith.
   (c) (1) In establishing the procedure to prequalify design-build
entities, the authority shall use a standard questionnaire prepared
by the authority. In preparing the questionnaire, the authority shall
consult with the construction industry, including, but not limited
to, representatives of the building trades and surety industry. This
questionnaire shall require information including, but not limited
to, all of the following:
   (A) If the design-build entity is a partnership, limited
partnership, or other association, a listing of all of the partners,
general partners, or association members known at the time of bid
submission who will participate in the design-build contract.
   (B) (i) Evidence that the lead member of the design-build entity
has completed a state highway project in California with a value of
at least twenty-five million dollars ($25,000,000) in the past 10
years.
   (ii) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the design
and construction of the project, as well as a financial statement
that assures the authority that the design-build entity has the
capacity to complete the project.
   (C) The licenses, registration, and credentials required to design
and construct the project, including, but not limited to,
information on the revocation or suspension of any license,
credential, or registration.
   (D) Evidence that establishes that the design-build entity has the
capacity to obtain all required payment and performance bonding,
liability insurance, and errors and omissions insurance.
   (E) Information concerning workers' compensation experience
history and a worker safety program.
   (F) A full disclosure regarding all of the following that are
applicable:
   (i) Any serious or willful violation of Part 1 (commencing with
Section 6300) of Division 5 of the Labor Code or the federal
Occupational Safety and Health Act of 1970 (Public Law 91-596),
settled against any member of the design-build entity.
   (ii) Any debarment, disqualification, or removal from a federal,
state, or local government public works project.
   (iii) Any instance where the design-build entity, or its owners,
officers, or managing employees submitted a bid on a public works
project and were found to be nonresponsive, or were found by an
awarding body not to be a responsible bidder.
   (iv) Any instance where the design-build entity, or its owners,
officers, or managing employees defaulted on a construction contract.

   (v) Any violations of the Contractors' State License Law, as
described in Chapter 9 (commencing with Section 7000) of Division 3
of the Business and Professions Code, excluding alleged violations of
federal or state law regarding the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding, or
Federal Insurance Contribution Act (FICA) withholding requirements
settled against any member of the design-build entity.
   (vi) Any bankruptcy or receivership of any member of the
design-build entity, including, but not limited to, information
concerning any work completed by a surety.
   (vii) Any settled adverse claims, disputes, or lawsuits between
the owner of a public works project and any member of the
design-build entity during the five years preceding submission of a
bid under this article, in which the claim, settlement, or judgment
exceeds fifty thousand dollars ($50,000). Information shall also be
provided concerning any work completed by a surety during this
period.
   (G) In the case of a partnership or any association that is not a
legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be fully liable for the performance under the design-build
contract.
   (H) Information regarding the safety record of the design-build
entity. A bidder's safety record shall be deemed acceptable if its
experience modification rate for the most recent three-year period is
an average of 1.00 or less, and its average total recordable
injury/illness rate and average lost work rate for the most recent
three-year period does not exceed the applicable statistical
standards for its business category or if the bidder is a party to an
alternative dispute resolution system as provided for in Section
3201.5 of the Labor Code.
   (2) The information required under this subdivision shall be
verified under oath by the entity and its members in the manner in
which civil pleadings in civil actions are verified. Information
required under this subdivision that is not a public record under the
California Public Records Act, as described in Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code, shall not be open to public inspection.
   (d) The authority shall establish a procedure for final selection
of the design-build entity in which selection shall be based upon a
competitive bidding process resulting in lump-sum bids by the
prequalified design-build entities.  Awards shall be made to the
lowest responsible bidder.
   (e) (1) Notwithstanding any other provision of this code, upon
issuance of a contract award, the authority shall publicly announce
the award, identifying the contractor to whom the award is made,
along with a written decision supporting the contract award and
stating the basis of the award. The notice of award shall also
include all prequalified design-build entities.
   (2) The written decision supporting the authority's contract
award, described in paragraph (1), and the contract file shall
provide sufficient information to satisfy an external audit.
   20209.27.  For purposes of this article, prebid services include
preliminary engineering studies and other activities that lead to the
selection of a project alternative. These activities encompass a
variety of tasks, including, but not limited to, the following
activities:
   (a) Project geometric design.
   (b) Earthwork calculations.
   (c) Preparation of cross sections.
   (d) Drainage design.
   (e) Construction staging design.
   20209.28.  (a) Any design-build entity that is selected to design
and build the project under this article shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omission insurance coverage sufficient to
cover all design, engineering, and architectural services provided in
the contract.  This section does not prohibit a general or
engineering contractor from being designated the lead entity on a
design-build project for the purposes of purchasing necessary bonding
to cover the activities of the design-build entity.
   (b) Any payment or performance bond written for the purposes of
this article shall be written using a bond form developed by the
Department of General Services under subdivision (i) of Section 14661
of the Government Code.
   20209.30.  All bids by subcontractors that were not listed by the
design-build entity in accordance with subparagraph (A) of paragraph
(1) of subdivision (c) of Section 20209.26 shall be considered by the
design-build entity in accordance with the design-build process set
forth by the authority in the design-build package. All bids by
subcontractors bidding on contracts under this article shall be
subject to Chapter 4 (commencing with Section 4100) of Part 1 of
Division 2. The design-build entity shall do both of the following:
   (a) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the authority.
   (b) Provide a fixed date and time on which the subcontracted work
will be awarded in accordance with the procedure established under
this article.
   20209.32.  (a) A deviation from the performance criteria and
standards established under subdivision (a) of Section 20209.26 may
not be authorized except by written consent of the authority and the
department.
   (b) The employees of the department shall perform the construction
inspection for the project constructed under this article, including
surveying and testing the materials for the project. All design
related documents shall be public records.
   20209.34.  Quality control inspection for the construction of the
project utilizing the design-build approach authorized by this
article shall be performed by employees of the department.
   20209.36.  Nothing in this article affects, expands, alters, or
limits any rights or remedies otherwise available at law.
   20209.38.  (a) The retention proceeds withheld by the authority
from a design-build entity shall not exceed 5 percent.
   (b) The authority shall not withhold retention from payments to a
design-build entity for actual costs incurred and billed or design
services, construction management services, or where applicable, for
completed operations and maintenance services.
   (c) In a contract between a design-build entity and a
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the authority and the design-build entity. If the
design-build entity provides written notice to any subcontractor who
is not a member of the design-build entity, prior to or at the time
that the bid is requested, that a bond may be required and the
subcontractor subsequently is unable or refuses to furnish a bond to
the design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the authority and the design-build entity from any
payment made by the design-build entity to the subcontractor.
   (d) In accordance with the provisions of applicable state law, the
design-build entity may be permitted to substitute securities in
lieu of the withholding from progress payments specified in
subdivision (b). Substitutions shall be made in accordance with
Section 22300.
   20209.40.  Not later than three years after a design-build
contract is awarded, the authority shall submit a progress report to
the Senate Committee on Transportation and Housing and the Assembly
Committee on Transportation. The progress report shall include, but
shall not be limited to, all of the following information:
   (a) A description of the project.
   (b) The estimated and actual project costs.
   (c) The design-build entity that was awarded the project.
   (d) A description of any written protests concerning any aspect of
the solicitation, bid, proposal, or award of the design-build
project, including, but not limited to, the resolution of the
protests.
   (e) An assessment of the prequalification process and criteria and
a copy of the prequalification questionnaire.
   (f) An assessment of the impact of limiting retention to 5 percent
on the project, as required under Section 20209.38.
   (g) A description of the labor force compliance program required
under Section 20209.24, and an assessment of the impact on the
project where compliance with that program is required.
   (h) A description of the method used to award the contract.
   (i) An assessment of the project impact of the "skilled labor
force availability" requirement imposed under paragraph (2) of
subdivision (b) of Section 20209.26.
   (j) Recommendations regarding the most appropriate uses for the
design-build approach.
   20209.44.  This article shall remain in effect only until January
1, 2010, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2010, deletes or extends
that date.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XII B of the California Constitution.

  SEC. 3.  The provisions of this act are severable. If any provision
of this act or application of the provisions of this act is held
invalid, that invalidity shall not affect other provisions or
applications that can be given effect without the invalid provision
or application.