BILL ANALYSIS SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 2098 SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Miller VERSION: 8/20/10 Analysis by: Jennifer Gress FISCAL: yes Hearing date: August 30, 2010 SUBJECT: Design-build on State Highway Route (SR) 91 in Riverside County DESCRIPTION: This bill authorizes the Riverside County Transportation Commission (RCTC) to use the design-build method of procurement for its SR 91 Corridor Improvement Project. ANALYSIS: Design-build refers to a procurement process in which both the design and construction of a project are procured from a single entity. Design-build stands in contrast to the traditional design-bid-build contracting method whereby work on a project is divided into two separate phases: design and construction. The government agency is responsible for the design of the project, either by designing it itself or by contracting with a private entity to do so. When designs are completed, the agency solicits bids from the construction industry and hires the responsible low bidder to build the project. Design-build combines these two phases into a single, comprehensive contract. Senate Bill 4, Second Extraordinary Session, Chapter 2, Statutes of 2009, authorized the California Department of Transportation (Caltrans) to utilize the design-build method of procurement for 10 state highway, bridge, or tunnel projects and it authorized a local transportation agency to utilize design-build on five local street or road, bridge, tunnel, or AB 2098 (MILLER) Page 2 public transit projects within the jurisdiction of the local agency, if approved by the California Transportation Commission (CTC). This bill : Authorizes RCTC, a local agency, to utilize design-build for the SR 91 Corridor Improvement Project, thereby increasing the number of design-build projects authorized under SB 4 from 15 to 16. Stipulates that Caltrans shall be responsible for construction inspection services for the project, including, but not limited to, surveying, testing the materials, verification testing, monitoring of environmental compliance, quality control inspection, and quality assurance audits. Requires that there be a direct reporting relationship between the inspectors and senior Caltrans engineers responsible for construction inspection services. Specifies that the senior Caltrans engineer responsible for construction inspection services shall be responsible for the acceptance or rejection of work. Provides that Caltrans may use department employees or private consultants to perform construction inspection services. Provides that Caltrans shall ensure that public safety and convenience is maintained whenever work is performed under an encroachment permit within the state highway right-of-way and authorizes Caltrans to stop the contractor's operation wholly or in part when public safety is jeopardized. Requires that the resources necessary for the performance of construction inspection services on this project shall be included in Caltrans' capital outlay support program in the annual Budget Act. Requires RCTC, not later than July 1 two years after the design-build contract is awarded and each July 1 thereafter, to submit a report on the progress of the project and its compliance with the provisions of this bill to the transportation policy committees in each house of the Legislature. AB 2098 (MILLER) Page 3 COMMENTS: 1.Purpose and background . RCTC is seeking to use design-build because combining design and construction under a single entity will allow construction on some elements of the project to commence while design on other elements is ongoing, thus accelerating overall project completion by an estimated three to five years. Combining both under a single entity also allows for greater cost and schedule certainty than traditional design-bid-build. RCTC argues that congestion on SR 91 in Riverside County is so great that the public interest is best served by accelerating project completion to the extent possible. In September 2009, CTC adopted guidelines to implement design-build under SB 4 that allowed local agencies to develop projects on the state highway system. The Professional Engineers in California Government (PECG) objected to the guidelines at the time on the premise that SB 4 only authorized Caltrans to use design-build on the state highway system. Nevertheless, in April 2010, CTC approved RCTC's request to use design-build for its SR 91 Corridor Improvement Project. Since that time, PECG has threatened to litigate if RCTC proceeds with design-build. This bill is needed to give RCTC unambiguous authority to use design-build for the SR 91 project. RCTC and PECG have worked for several months to address some of PECG's concerns regarding the assignment of certain responsibilities and have come to agreement on a "hybrid" model of construction management that assigns construction inspection services to Caltrans. This bill reflects that agreement. Under this "hybrid" model, Caltrans, rather than the local agency, is responsible for performing what are referred to as "boots-on-the-ground" construction inspections. These inspectors, whether Caltrans personnel or consultants under contract with Caltrans, will report directly to a senior Caltrans engineer and the resident engineer employed by or under contract with RCTC, as opposed to reporting only to the local agency resident engineer. Staff notes that the parties involved - RCTC, PECG, and Caltrans - agree that the SR 91 Corridor Improvement Project is a unique project and this "hybrid" model should not AB 2098 (MILLER) Page 4 necessarily be considered a model to deploy on future projects. 2.The SR 91 Corridor Improvement Project . SR 91 is the only major surface transportation facility connecting Orange and Riverside counties and is the primary commuting route between the two counties. A portion of SR 91 in Orange County has five general purpose lanes and two tolled express lanes. The express lanes end at the Orange/Riverside county line. SR 91 in Riverside County currently has four general purpose lanes and one high-occupancy vehicle (HOV) lane in each direction, with those lanes varying in width from 11 to 12 feet. The SR 91 Corridor Improvement Project extends the express lanes east eight miles from the Orange/Riverside county line to SR 15 in Riverside County. The resulting facility will consist of five general purpose lanes and two express lanes, all with a standard 12-foot width. (At most times of day, high-occupancy vehicles, defined for the SR 91 express lanes as vehicles having three or more occupants, may use the express lanes for free.) The SR 91 Corridor Improvement Project also includes the reconstruction of six interchanges with major arterial roads in the City of Corona, a collector/distributor system of roads that run parallel to the freeway lanes to facilitate vehicles merging on and off the freeway, improvements to SR 15 between the Ontario Avenue interchange and SR 91, and direct connectors from SR 91 to southbound SR 15. The project is currently about 2/3 of the way through the environmental review process. RCTC anticipates issuing the request for proposals for design-build contractors in February 2011 and awarding a contract in January 2012. Construction is expected to be completed by late 2015. Assembly Votes: Floor: 73-0 Trans: 12-0 POSITIONS: (Communicated to the Committee before noon on Friday, August 27, 2010) SUPPORT: Riverside County Transportation Commission (sponsor) AB 2098 (MILLER) Page 5 California Chamber of Commerce CH2M Hill Greater Riverside Chambers of Commerce Monday Morning Group Orange Chamber of Commerce Orange County Business Council Orange County Transportation Authority Self-Help Counties Coalition Southern California Contractors Association Western Riverside Council of Governments OPPOSED: None received.