BILL ANALYSIS
AB 2098
Page 1
ASSEMBLY THIRD READING
AB 2098 (Miller)
As Amended June 23, 2010
2/3 vote. Urgency
TRANSPORTATION 12-0
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|Ayes:|Bonnie Lowenthal, | | |
| |Jeffries, | | |
| |Bill Berryhill, Buchanan, | | |
| |Eng, Furutani, Galgiani, | | |
| |Hayashi, Miller, Niello, | | |
| |Norby, Solorio | | |
| | | | |
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SUMMARY : Authorizes the Riverside County Transportation
Commission (RCTC) to award a design-build contract for design
and construction of State Highway Route 91. Specifically, this
bill:
1)Makes legislative findings and declarations regarding the
State Highway Route 91 Corridor Improvement Project; asserts
that best value design-build is the only procurement method to
obtain cost and schedule certainty that will achieve investor
confidence to enable the project to be constructed.
2)States legislative intent to provide RCTC with direct
statutory authority to implement the State Highway Route 91
corridor improvement project using the best value design-build
method of procurement.
3)Defines key terms.
4)Authorizes RCTC, notwithstanding any other provision of law,
to procure services and award and enter into agreements
including best value design-build agreements for the State
Highway 91 Corridor Improvement Project.
5)Is an urgency measure.
EXISTING LAW :
1)Sets forth provisions governing public works contracting.
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These provisions generally prohibit public agencies from
contracting with the same firm for both the design and the
construction phases of a project.
2)Generally requires public works construction contracts to be
awarded to the lowest responsible bidder.
3)Authorizes RCTC to impose and collect tolls on State Highway
Route 91 in Riverside County and to issue bonds and other
forms of indebtedness for specified purposes.
4)Enacted last year, establishes the Design-Build Demonstration
Program that provides for a limited use of design-build
contracts for transportation; sets forth criteria and
procedures governing the program.
5)Defines "design-build" to mean a procurement process in which
both the design and construction of a project are procured
from a single entity.
6)Authorizes local transportation entities, if authorized by the
CTC, to use design-build for up to five projects that may be
"for local street or road, bridge tunnel, or public transit
projects within the jurisdiction of the entity."
7)Authorizes the California Department of Transportation
(Caltrans), if authorized by the CTC, to use design-build on
up to 10 "state highway, bridge, or tunnel projects."
8)Limits the total number of projects authorized in the program
to 15.
FISCAL EFFECT : Unknown
COMMENTS : Design-build is an alternate method for procuring
design and construction services for the delivery of public
works projects from a single entity. For example, instead of a
local agency contracting separately for an engineering firm to
design a project and a construction firm to build the project,
the agency would competitively bid the contract to a private
design-build entity.
Last session, the Legislature enacted SB 1316 (Correa), Chapter
714, Statutes of 2008, that gave RCTC the authority to develop
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the State Highway Route 91 Corridor Improvement Project. The
project, between the Orange County line to Interstate 15 in
Riverside County, includes a general purpose traffic lane in
each direction, improved ramps and intersections at major city
streets that intersect the freeway in Corona, better connections
between Interstate 15 and State Highway Route 91 and the
extension of the State Highway Route 91 Express Lanes, which are
currently located on State Highway Route 91 in Orange County to
Interstate 15. The project is a $1.2 billion project that is
expected to create 18,000 jobs.
Project proponents assert that the key to the project's success
is RCTC's financing plan, based on a mix of federal innovative
financing loan guarantees and revenue bonds. Proponents also
assert that this financing plan is only viable if RCTC can
provide cost and schedule certainty via the use of a
design-build procurement. Proponents contend that failure to
secure design-build authority will result in RCTC having to
segment the project into separate design-bid-build packages.
This in turn, they argue, will result in a three- to five-year
delay to accommodate project design and right of way
acquisition.
State law currently allows selected state agencies and local
governments to use design-build but, until last year, had not
allowed design-build for highways. Last year, however, the
Legislature passed and the Governor signed SB 4 X2 (Cogdill),
Chapter 2, Statutes of 2009-10 Second Extraordinary Session,
authorizing, among other things, limited use of design-build for
transportation. SB 4 X2 sets forth processes and procedures by
which design-build projects would be approved. SB 4 X2 does
not, however, authorize a local transportation entity (such as
RCTC) to use design-build on the state highway system.
RCTC does not have authority to enter into a design-build
contract for this project. This bill would remedy that
situation by granting RCTC specific authority to enter into a
design-build contract for this project.
Opponents argue that the design-build procurement method does
not serve the interests of taxpayers and public safety.
Specifically, they argue that design-build eliminates
competitive bidding and eliminates public oversight and public
inspection of public works (although this latter argument
overlooks that fact that RCTC is a public agency).
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Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0005078