BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1509|
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UNFINISHED BUSINESS
Bill No: SB 1509
Author: Simitian (D), et al.
Amended: 8/20/12
Vote: 21
SENATE EDUCATION COMMITTEE : 7-0, 4/11/12
AYES: Lowenthal, Alquist, Blakeslee, Huff, Liu, Simitian,
Vargas
NO VOTE RECORDED: Runner, Hancock, Price, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 6-0, 4/30/12
AYES: Kehoe, Alquist, Dutton, Lieu, Price, Steinberg
NO VOTE RECORDED: Walters
SENATE FLOOR : 32-4, 5/7/12
AYES: Alquist, Anderson, Berryhill, Blakeslee, Cannella,
Correa, De León, DeSaulnier, Dutton, Emmerson, Evans,
Fuller, Gaines, Harman, Hernandez, Huff, Kehoe, La Malfa,
Leno, Lieu, Liu, Lowenthal, Negrete McLeod, Padilla,
Price, Rubio, Simitian, Steinberg, Walters, Wolk, Wright,
Wyland
NOES: Calderon, Corbett, Hancock, Yee
NO VOTE RECORDED: Pavley, Runner, Strickland, Vargas
ASSEMBLY FLOOR : 79-0, 8/22/12 - See last page for vote
SUBJECT : School facilities: design-build contracts
SOURCE : Author
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DIGEST : This bill (1) extends the sunsets authorizing
kindergarten through grade 12 (K-12) and California
Community Colleges (CCC) districts to utilize design-build
contracts for the design and construction of education
facilities, from January 1, 2014, to January 1, 2020; (2)
expresses the intent of the Legislature that design-build
procurement does not replace or eliminate competitive
bidding; and (3) specifies that the request for proposal
shall not include a design-build-operate contract for
educational facilities.
Assembly Amendments extend the sunset date from January 1,
2014 to January 1, 2020, and make technical changes.
ANALYSIS : Existing law authorizes a school district
governing board to enter into a design-build contract for
the design and construction of a school facility for
projects in excess of $2,500,000 if, after evaluating
traditional design-bid-build and design build processes in
a public meeting, the governing board makes written
findings that use of the design-build process on a specific
project will either:
1. Reduce comparable project costs.
2. Expedite the project's completion.
3. Provide features not achievable through the traditional
design-bid-build method.
Existing law establishes specific procedures for the
progression of a K-12 school facility design-build project,
outlines the specific elements to be included in a request
for proposal (including significant factors, subfactors,
methodology, rating and weighting schemes for evaluating
proposals), and establishes, among other things,
pre-qualification, bonding, and labor compliance program
requirements.
Existing law also provides parallel authority, procedures
and requirements for community college district governing
boards to conduct design build projects.
This bill deletes the existing sunset on the authority of
school districts and community college districts to enter
into a design-build contract for the design and
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construction of a school facility and community college
facility, thereby permanently establishing the authority of
K-12 districts to enter into design-build contracts.
Comments
What is design-build? There are two primary construction
delivery systems used in the public and private sectors,
"design-bid-build" and "design-build."
Existing law requires that school districts award
construction contracts over $15,000 to the lowest
responsible bidder. Existing law also allows contracts for
architectural services to be awarded on the basis of
demonstrated competence and professional qualifications to
be performed at a fair and reasonable price (not
necessarily lowest bidder). These laws have meant that
schools (and most public construction work) have been built
using a "design-bid-build" methodology wherein a separate
contract is awarded for the design work by an architect and
another contract is awarded to the lowest responsible
bidder for the construction.
In the 1990's, the state began the enactment of various
legislation authorizing state and local entities to use a
"design-build" system under specified circumstances.
Under this approach a single contract is awarded to a
professional team, a "design-build" entity, to conduct both
types of work. Rather than awarding such a contract to the
lowest responsible bidder, it may be awarded on the basis
of the experience and qualifications of the competitors, or
on a determination that a particular competitor provides
the best value to the project.
Related reports . In February 2005, the Legislative Analyst
Office (LAO) issued a report on Design-Build: An
Alternative Construction System in which it reported its
consolidated findings on design-build across several public
works sectors. The LAO made the following recommendations:
1. The state should adopt a single statute applying to all
public entities.
2. Design-build be available as an option and not a
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replacement for "design-bid-build."
3. Contracts for most of the project costs should be
objectively awarded based on competitive bidding.
4. No cost threshold should be imposed on the authority to
use design-build.
5. Access for small and newly established contractors
should be assured by requiring that design build
contracts be awarded to contractors with experience and
qualifications that are consistent with the needs of the
project, rather than limited to the biggest and
longest-established firms.
6. The authority should only be granted to construct
buildings and directly related infrastructure given the
more complex issues associated with transportation,
public transit, and water resources facilities.
The LAO also noted that advantages of the design-build
delivery method included price certainty, avoidance of
conflicts and disputes between the architect/engineer and
the construction contractor, involvement of the builder in
the design process, faster project delivery, and less need
for technical staff to manage projects within the public
agency. Disadvantages noted included a limited assurance
of quality control since the building is not typically
defined in detail at the time of entering into the
contract, a more subjective process for awarding contracts
and evaluating qualifications and experience, and limited
access for small contractors without the range of
experience of larger, long-established firms.
In January 2010, the LAO presented a summary of reports
received from California counties that had completed
construction projects using the design-build delivery
method, as required under the legislation extending
design-build authority to county governments (Public
Contract Code Section 20133).
1. The LAO noted that although difficult to draw
conclusions from the reports received about the
effectiveness of design-build compared to other project
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delivery methods, there was no evidence to discourage
the Legislature from granting design-build authority to
local agencies on an ongoing basis.
2. The LAO also recommended that 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.
Prior Legislation
AB 1402 (Simitian), Chapter 421, Statutes of 2001,
authorized K-12 school districts to enter into design-build
contracts for construction of school facilities costing in
excess of 10,000,000. The bill also required the LAO to
submit a report by January 1, 2006, providing specified
information and making recommendations for changing the
design-build legislation. It also provided for the repeal
of its provisions as of January 1, 2007.
AB 1000 (Simitian), Chapter 637, Statutes of 2002,
authorized three specific community college districts (Los
Angeles Community College District, San Jose-Evergreen
Community College District and the San Mateo Community
College District) to enter into design-build contracts for
construction of facilities costing in excess of $10
million. In addition, the bill authorized the Chancellor
of the CCC to select up to five community college facility
construction projects from districts other than the three
specified to use the design build procedures established by
the bill's provisions. It also required a report from the
LAO by January 1, 2007, providing specified information and
making recommendations for changing the design-build
legislation. The bill provided for the repeal of its
provisions as of January 1, 2008.
Proposition 1D, authorized by AB 127 (Nunez and Perata) and
approved by the voters in November 2006, provided $7.3
billion for K-12 and $3.1 billion for higher education
facilities construction and modernization projects. Among
its provisions, AB 127 extended the repeal dates on the
design-build statutes established by AB 1402 and AB 1000 to
January 1, 2010, and January 1, 2011, respectively.
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SB 614 (Simitian), Chapter 471, Statutes of 2007, made
various changes to the design build provisions including,
reducing the contract threshold for these projects from $10
million to $2.5 million, extending the authority to enter
into a design-build contract to all community college
districts, and extending the sunset of the design build
provisions to January 1, 2014.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee analysis,
"No direct state costs. The savings or costs associated
with the local authority made permanent by this bill are
subject to the appropriate assessment of the contracting
market."
SUPPORT : (Verified 8/22/12)
American Council of Engineering Companies
Associated General Contractors
California Association of School Business Officials
California Association of Sheet Metal and Air Conditioning
Contractors Association
California Building Industry Association
California Community Colleges, Chancellor's Office
California Legislative Conference of the Plumbing, Heating
and Piping Industry
California-Nevada Conference of Operating Engineers
Clovis Unified School District
Coalition for Adequate School Housing
Community College League of California
Community Colleges Facility Consortium
County School Facilities Consortium
Design Build Institute of America
Kern Community College District
Los Angeles Community College District
Los Angeles Unified School District
Los Rios Community College District
National Association of Electrical Contractors Association
Peralta Community College District
Rio Hondo Community College District
San Diego Community College District
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San Francisco Unified School District
San Mateo Community College District
South Orange County Community College District
State Building and Construction Trades Council
West Kern Community College District
ARGUMENTS IN SUPPORT : According to the author's office,
design-build is an alternative procurement method which
allows schools to merge architectural, engineering and
construction services in a single package. Procuring
services in one comprehensive package provides local
districts with cost certainty, and expedited project
delivery on school construction.
A 2010 LAO report stated that it found no evidence to
discourage the legislature from granting design-build
authority to local districts on an ongoing basis.
Additionally multiple LAO reports cite design build
authority as a 'useful alternative' for construction.
Preserving design-build authority ensures that schools are
equipped with the tools they need to meet their unique
construction needs.
ASSEMBLY FLOOR : 79-0, 8/22/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell,
Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Roger Hernández
PQ/RM:k 8/22/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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