BILL NUMBER: SB 645	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 21, 2007
	AMENDED IN SENATE  APRIL 9, 2007

INTRODUCED BY   Senator Correa
   (Principal  coauthor:   Assembly Member
  Tran   coauthors:   Assembly
Members   Keene   and Tran  )

                        FEBRUARY 22, 2007

   An act to  add and repeal Section 20785 of  
amend Section 20133 of, and to add and repeal Section 20785 of, 
the Public Contract Code, relating to public contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 645, as amended, Correa.  Orange County Sanitation
District: design-build contracts.   Design-build
contracts: counties. 
   Existing law requires public entities to comply with certain
procedures in soliciting and evaluating bids and awarding contracts
for the erection, construction, alteration, repair, or improvement of
any public structure, building, road, or other public improvement.
 Existing law authorizes specified state agencies, cities,
and counties to implement alternative procedures for the awarding of
contracts on a design-build basis.  
   Existing law, until January 1, 2011, authorizes certain counties,
with the approval of the board of supervisors, to enter into
design-build contracts, as defined, in accordance with specified
procedures.  
   This bill would authorize the County of Nevada to use the
design-build process.  
   Existing law authorizes specified state agencies, cities, and
counties to implement alternative procedures for the awarding of
contracts on a design-build basis. 
   This bill would authorize, until January 1, 2013, the Orange
County Sanitation District  and the Nevada County Sanitation
District No. 1  to enter into design-build contracts in excess
of  $10,000,000   $6,000,000  , as defined,
according to a specified procedure.  This bill makes
findings regarding the necessity of a special statute.  

   This bill makes findings regarding the necessity of a special
statute.  
   This bill would require specified information to be verified under
oath, thus imposing a state-mandated local program by expanding the
scope of an existing crime.  
   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. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


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

   SECTION 1.    Section 20133 of the   Public
Contract Code   is amended to read: 
   20133.  (a) (1) This section provides for an alternative procedure
on bidding on building construction projects in excess of two
million five hundred thousand dollars ($2,500,000) applicable only in
the Counties of Alameda, Butte, Contra Costa, Del Norte, El Dorado,
Fresno, Humboldt, Kings, Los Angeles, Madera, Mariposa, Mendocino,
Merced, Monterey, Napa,  Nevada,  Orange, Placer,
Sacramento, San Diego, San Joaquin, San Luis Obispo, Santa Clara,
Shasta, Siskiyou, Solano, Sonoma, Stanislaus, Tulare, Yolo, and Yuba,
upon approval of the appropriate board of supervisors.
   (2) These counties may award the project using either the lowest
responsible bidder or by best value.
   (b) (1) It is the intent of the Legislature to enable these
counties to utilize cost-effective options for building and
modernizing public facilities. It is not the intent of the
Legislature to authorize this procedure for transportation
facilities, including, but not limited to, roads and bridges.
   (2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles and
responsibilities of each participant in the design-build process.
The Legislature also finds that the cost-effective benefits to the
counties are achieved by shifting the liability and risk for cost
containment and project completion to the design-build entity.
   (3) It is the intent of the Legislature to provide an alternative
and optional procedure for bidding and building construction projects
for these counties.
   (4) The design-build approach may be used, but is not limited to,
when it is anticipated that it will: reduce project cost, expedite
project completion, or provide design features not achievable through
the design-bid-build method.
   (5) If the board of supervisors elects to proceed under this
section, the board of supervisors shall establish and enforce for
design-build projects a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code, or it
shall contract with a third party to operate a labor compliance
program containing the requirements outlined in Section 1771.5 of the
Labor Code. This requirement shall not apply to any project where
the county 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.
   (c) As used in this section:
   (1) "Best value" means a value determined by objective criteria
related to price, features, functions, and life-cycle costs.
   (2) "Design-build" means a procurement process in which both the
design and construction of a project are procured from a single
entity.
   (3) "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.
   (4) "Project" means the construction of a building and
improvements directly related to the construction of a building, but
does not include the construction of other infrastructure, including,
but not limited to, streets and highways, public rail transit, or
water resources facilities and infrastructure.
   (d) Design-build projects shall progress in a four-step process,
as follows:
   (1) (A) The county shall prepare a set of documents setting forth
the scope of the project. The documents may include, but are not
limited to, the size, type, and desired design character of the
buildings and site, performance specifications covering the quality
of materials, equipment, and workmanship, preliminary plans or
building layouts, or any other information deemed necessary to
describe adequately the county's needs. The performance
specifications and any plans shall be prepared by a design
professional who is duly licensed and registered in California.
   (B) Any architect or engineer retained by the county to assist in
the development of the project specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.
   (2) (A) Based on the documents prepared in paragraph (1), the
county shall prepare a request for proposals that invites interested
parties to submit competitive sealed proposals in the manner
prescribed by the county. The request for proposals shall include,
but is not limited to, the following elements:
   (i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the county to inform interested parties of the
contracting opportunity, to include the methodology that will be used
by the county to evaluate proposals and specifically if the contract
will be awarded to the lowest responsible bidder.
   (ii) Significant factors that the county reasonably expects to
consider in evaluating proposals, including cost or price and all
nonprice related factors.
   (iii) The relative importance of weight assigned to each of the
factors identified in the request for proposals.
   (B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors other than cost or price when combined
are:
   (i) Significantly more important than cost or price.
   (ii) Approximately equal in importance to cost or price.
   (iii) Significantly less important than cost or price.
   (C) If the county chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately or incorporate into
the request for proposal applicable rules and procedures to be
observed by the county to ensure that any discussions or negotiations
are conducted in good faith.
   (3) (A) The county shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by the
county. In preparing the questionnaire, the county shall consult
with the construction industry, including representatives of the
building trades and surety industry. This questionnaire shall require
information including, but not limited to, all of the following:
   (i) 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,
including, but not limited to, mechanical subcontractors.
   (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 county that the design-build entity has the capacity
to complete the project.
   (iii) The licenses, registration, and credentials required to
design and construct the project, including information on the
revocation or suspension of any license, credential, or registration.

   (iv) 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.
   (v) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code, or
the federal Occupational Safety and Health Act of 1970 (P.L. 91-596),
settled against any member of the design-build entity, and
information concerning workers' compensation experience history and
worker safety program.
   (vi) Information concerning any debarment, disqualification, or
removal from a federal, state, or local government public works
project. Any instance in which an entity, 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.
   (vii) Any instance in which the entity, or its owners, officers,
or managing employees, defaulted on a construction contract.
   (viii) Any violations of the Contractors' State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), excluding alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding, or
of Federal Insurance Contributions Act (FICA; 26 U.S.C. Sec. 3101 et
seq.) withholding requirements settled against any member of the
design-build entity.
   (ix) Information concerning the bankruptcy or receivership of any
member of the design-build entity, including information concerning
any work completed by a surety.
   (x) Information concerning all 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 pursuant to this section, 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.
   (xi) In the case of a partnership or other 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.
   (B) The information required pursuant to 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 that
is not a public record pursuant to the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code) shall not be open to public inspection.
   (4) The county shall establish a procedure for final selection of
the design-build entity. Selection shall be based on either of the
following criteria:
   (A) A competitive bidding process resulting in lump-sum bids by
the prequalified design-build entities. Awards shall be made to the
lowest responsible bidder.
   (B) A county may use a design-build competition based upon best
value and other criteria set forth in paragraph (2). The design-build
competition shall include the following elements:
   (i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors shall
each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design,
and construction expertise, life cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.
   (ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous to
the least.
   (iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.
   (iv) Notwithstanding any provision of this code, upon issuance of
a contract award, the county shall publicly announce its award,
identifying the contractor to whom the award is made, along with a
written decision supporting its contract award and stating the basis
of the award. The notice of award shall also include the county's
second and third ranked design-build entities.
   (v) For the purposes of 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, which has graduated apprentices in each of
the preceding five years. This graduation requirement shall not apply
to programs providing apprenticeship training for any craft that has
been deemed by the Department of Labor and the Department of
Industrial Relations to be an apprenticeable craft in the five years
prior to enactment of this act.
   (vi) For the purposes of this paragraph, a bidder's "safety record"
shall be deemed "acceptable" if their experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and their average  Total Recordable Injury/Illness 
 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.
   (e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section 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 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 entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.
   (2) Any payment or performance bond written for the purposes of
this section shall be written using a bond form developed by the
county.
   (f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of paragraph
(3) of subdivision (d) shall be awarded by the design-build entity
in accordance with the design-build process set forth by the county
in the design-build package. All subcontractors bidding on contracts
pursuant to this section shall be afforded the protections contained
in Chapter 4 (commencing with Section 4100) of Part 1. The
design-build entity shall do both of the following:
   (1) 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 county.
   (2) Provide a fixed date and time on which the subcontracted work
will be awarded in accordance with the procedure established pursuant
to this section.
   (g) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the county.
   (h) The county may retain the services of a design professional or
construction project manager, or both, throughout the course of the
project in order to ensure compliance with this section.
   (i) Contracts awarded pursuant to this section shall be valid
until the project is completed.
   (j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.
   (k) (1) If the county elects to award a project pursuant to this
section, retention proceeds withheld by the county from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.
   (2) In a contract between the design-build entity and the
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 county 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 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 county and the design-build entity from any
payment made by the design-build entity to the subcontractor.
   () Each county that elects to proceed under this section and uses
the design-build method on a public works project shall submit to the
Legislative Analyst's Office before December 1, 2009, a report
containing a description of each public works project procured
through the design-build process and completed after November 1,
2004, and before November 1, 2009. The report shall include, but
shall not be limited to, all of the following information:
   (1) The type of project.
   (2) The gross square footage of the project.
   (3) The design-build entity that was awarded the project.
   (4) The estimated and actual length of time to complete the
project.
   (5) The estimated and actual project costs.
   (6) A description of any written protests concerning any aspect of
the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.
   (7) An assessment of the prequalification process and criteria.
   (8) An assessment of the effect of retaining 5-percent retention
on the project.
   (9) A description of the Labor Force Compliance Program and an
assessment of the project impact, where required.
   (10) A description of the method used to award the contract. If
best value was the method, the report shall describe the factors used
to evaluate the bid, including the weighting of each factor and an
assessment of the effectiveness of the methodology.
   (11) An assessment of the project impact of "skilled labor force
availability."
   (12) An assessment of the design-build dollar limits on county
projects. This assessment shall include projects where the county
wanted to use design-build and was precluded by the dollar
limitation. This assessment shall also include projects where the
best value method was not used due to dollar limitations.
   (13) An assessment of the most appropriate uses for the
design-build approach.
   (m) Any county named in subdivision (a) that elects to not use the
authority granted by this section may submit a report to the
Legislative Analyst's Office explaining why the county elected to not
use the design-build method.
   (n) On or before January 1, 2010, the Legislative Analyst shall
report to the Legislature on the use of the design-build method by
counties pursuant to this section, including the information listed
in subdivision (). The report may include recommendations for
modifying or extending this section.
   (o) This section shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
   SECTION 1.   SEC. 2.   Section 20785 is
added to the Public Contract Code, to read:
   20785.  (a) Notwithstanding any other provision of law, the Orange
County Sanitation District  and the Nevada County Sanitation
District No. 1  may use the procedures described in Section
20133 for the construction of projects in excess of  ten
million dollars ($10,000,000)   six million dollars
($6,000,000)  , including, but not limited to, public wastewater
facilities.
   (b) In addition to the requirements of subparagraph (A) of
paragraph (3) of subdivision (d) of Section 20133, the Orange County
Sanitation District  and the Nevada County Sanitation District
No. 1  shall also establish a procedure to prequalify
design-build entities and all subcontractors, including, but not
limited to, mechanical and electrical subcontractors using a standard
questionnaire. The questionnaire shall include a list of all
partners, general partners, or association members known at the time
of bid submission who will participate in the design-build contract,
including, but not limited to, mechanical and electrical
subcontractors.
   (c) For purposes of this section, all references in Section 20133
to "county" and "board of supervisors" shall mean the Orange County
Sanitation District and  its   the Nevada County
Sanitation District No. 1, and their  board of directors,
respectively.
   (d) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
   SEC. 2.   SEC. 3.   Due to the unique
circumstances of the Orange County Sanitation District  and the
Nevada County Sanitation District No. 1  with respect to
 its   their  mandate with the federal
Environmental Protection Agency and the State Water Resources Control
Board for the completion of an additional secondary treatment
facility within the district by December 2012, the Legislature hereby
finds and declares that a general statute cannot be made applicable
within the meaning of Section 16 of Article IV of the California
Constitution. Therefore, the special legislation contained in Section
1 of this act is necessarily applicable only to  the Orange
County Sanitation District.   Nevada County, and the
special legislation contained in Section 2 of this act is necessarily
applicable only to the Orange County Sanitation District and the
Nevada County Sanitation District No. 1. 
   SEC. 3.   SEC. 4.   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 XIII
B of the California Constitution.