BILL ANALYSIS
SB 879
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Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 879 (Cox) - As Amended: August 2, 2010
Policy Committee: Local
GovernmentVote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill extends the sunset for the use of design-build by
counties from January 1, 2011,
to July 1, 2014, and aligns the design-build statutes for cities
and counties. The bill also:
1)Requires the design-build standard questionnaire currently
issued by cities or counties to state that the entity
submitting bids must divulge instances where a court has found
it to have submitted any claim in violation of the federal
False Claims Act or the state False Claims Act within the
previous five years.
2)Requires cities and counties to make available to the public
lists of subcontractors, bidders, and bid awards for
design-build projects.
3)Requires each county that uses the design-build method on a
public works project to submit to the Legislative Analyst's
Office (LAO) before September 1, 2013, a report containing
specified information related to each public works project
procured through the design-build process and completed
between November 1, 2009 and August 1, 2013.
4)Requires the LAO, by January 1, 2014, to prepare a report to
the Legislature on the use of design-build at the county
level. Requires that the LAO develop information for the
report based on specified information provided by the counties
as well as its own review of all available public records,
media reports, and other sources. The report is required to
include conclusions regarding the actual cost of projects
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procured pursuant to this section, whether the project
schedule was met or altered, and the use of change orders.
FISCAL EFFECT
1)Significant costs to LAO, likely more than $150,000, to
conduct detailed review and analysis of all public documents
associated with each design-build projects used by counties,
and to solicit other information from counties required for
its report.
2)Minor and absorbable costs to the Department of Industrial
Relations, which is responsible for enforcing prevailing wage
and related labor compliance programs associated with
design-build contracts.
3)Potential fiscal benefits to counties, to the extent that use
of design - build contracting results in faster project and/or
greater certainty about costs.
COMMENTS
1)Rationale. The bill is intended to reduce costs and expedite
delivery of county infrastructure projects. Supporters
(including the California State Association of Counties and
saved the Regional Council of Rural Counties) claim that the
design build construction method has local agencies hundreds
of millions of dollars on projects over the past decade, and
that counties have plans to use the design build method for
delivery of numerous more projects over the next several
years.
2)Background . The local Agency Public Construction Act requires
local agencies to comply with certain procedures in soliciting
and evaluating bids and awarding contracts for the
construction of public works. The traditional approach to
public contracting is referred to as the design-bid-build
method, which requires local officials to invite bids for
construction projects, based on a completed set of engineering
plans, then to award the construction bid to the lowest
responsible bidder. An alternative approach is the
design-build method, where both the design and construction
are procured from the same entity.
The state has enacted numerous bills over the past decade
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expanding authority for local governments to use this
alternative process. For example, SB 416 (Ashburn), Chapter
585, Statutes 2007, extended design-build authority to the
construction of buildings and directly related improvements to
all 58 counties in the state through 2010. AB 642 (Wolk),
Chapter 314, Statues 2008, extended design-build authority to
the construction of buildings and directly related
improvements to all cities in the state. SB 1699 (Wiggins),
Chapter 415, Statutes 2008, extended design-build authority to
the construction of buildings and improvements in excess of
$2.5 million directly related to a Sonoma Valley Health Care
District hospital or health facility building.
The 2009-10 budget package expanded design-build authorization
at the state level for (a) five state facilities within the
jurisdiction of Department of Corrections and Rehabilitation,
the Department of General Services and the Judicial Council;
(b) 10 redevelopment agency projects in excess of $1 million;
(c) five local transportation projects (regional
transportation agencies or transportation projects); and, (d)
10 state transportation projects.
As a result of these and related changes, design-build
contracting for building and related construction is currently
authorized for all cities and counties in the state, and more
targeted authorizations exist for other agencies of state and
local government.
In January of 2009 the LAO issued a report updating the
Legislature on the use of design-build by counties in
California, based on data received from counties who utilized
this methodology. In the report, LAO states that "although it
was difficult to draw conclusions from the reports received
about the effectiveness of design-build compared to other
project delivery methods, we do not think that the reports
provide any evidence that would discourage the Legislature
from granting design-build authority to local agencies on an
ongoing basis. In doing so, however, we recommend the
Legislature consider some changes such as creating uniform
design-build statute, eliminating cost limitations, and
requiring project cost to be a larger factor in awarding the
design-build contract."
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081