BILL NUMBER: AB 1724 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 10, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Member Frazier
FEBRUARY 14, 2014
An act to add Chapter 6.7 (commencing with Section 6970) to Part 1
of Division 2 of the Public Contract Code, relating to public
contracts, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1724, as amended, Frazier. Construction Manager/General
Contractor method: regional transportation agencies.
Existing law generally sets forth the requirements for the
solicitation and evaluation of bids and the awarding of contracts by
local agencies for public works contracts. Existing law authorizes
the Department of Transportation, the Santa Clara County Valley
Transportation Authority, and the San Mateo County Transit District
to use the Construction Manager/General Contractor project delivery
method for transit projects within their respective jurisdictions,
subject to certain conditions and requirements.
This bill would authorize regional transportation agencies, as
defined, to use the Construction Manager/General Contractor project
delivery method, as specified, to design and construct certain
projects. The bill would require a regional transportation
agency, within 180 days after the completion of any project using the
Construction Manager/General Contractor project delivery method, to
prepare a report that describes each project and provides relevant
data, as specified. The bill would also require that report to be
posted on the regional transportation agency's Internet Web site, and
would require the agency to notify the Chair of the Assembly
Committee on Transportation and the Chair of the Senate Committee on
Transportation and Housing that the report is available online.
The bill would require specified information provided
to a regional transportation agency to be verified under oath. By
expanding the scope of an existing crime, the bill would impose a
state-mandated local program.
The
This bill would further require a regional
transportation agency using the Construction Manager/General
Contractor project delivery method to comply with certain prevailing
wage provisions and to reimburse the Department of Industrial
Relations for its reasonable and related enforcement costs, as
specified. By requiring these reimbursements to be deposited into the
State Public Works Enforcement Fund, a continuously appropriated
fund, the bill would make an appropriation.
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: yes. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 6.7 (commencing with Section 6970) is added to
Part 1 of Division 2 of the Public Contract Code, to read:
CHAPTER 6.7. CONSTRUCTION MANAGER/GENERAL CONTRACTOR METHOD:
REGIONAL TRANSPORTATION AGENCIES
6970. For purposes of this chapter, the following definitions
apply:
(a) "Best value" means a value determined by objective criteria,
including, but not limited to, price, features, functions, life-cycle
costs, and other criteria deemed appropriate by the regional
transportation agency.
(a)
(b) "Construction manager" means a partnership,
corporation, or other legal entity that is able to provide
appropriately licensed contracting and engineering services as needed
pursuant to a Construction Manager/General Contractor method
contract.
(b)
(c) "Construction Manager/General Contractor method"
means a project delivery method in which a construction manager is
procured to provide preconstruction services during the design phase
of the project and construction services during the construction
phase of the project. The contract for construction services may be
entered into at the same time as the contract for preconstruction
services, or at a later time. The execution of the design and the
construction of the project may be in sequential phases or concurrent
phases.
(c) "Department" means the Department of Transportation as
established under Part 5 (commencing with Section 14000) of Division
3 of the Government Code.
(d) "Preconstruction services" means advice during the design
phase phase, including, but not limited
to, scheduling, pricing, and phasing to assist the regional
transportation agency to design a more constructible project.
(e) "Project" means the construction of a highway, bridge,
expressway, or tunnel.
(f) "Regional transportation agency" means any of the following:
(1) A transportation planning agency described in Section 29532 or
29532.1 of the Government Code.
(2) A county transportation commission established under Section
130050, 130050.1, or 130050.2 of the Public Utilities Code.
(3) Any other local or regional transportation entity that is
designated by statute as a regional transportation agency.
(4) A local transportation authority designated pursuant to
Division 12.5 (commencing with Section 131000) or Division 19
(commencing with Section 180000) of the Public Utilities Code.
(5) The Santa Clara Valley Transportation Authority established
pursuant to Part 12 (commencing with Section 100000) of Division 10
of the Public Utilities Code.
6974. (a) The Construction Manager/General Contractor method may
be used by a regional transportation agency pursuant to this chapter
if, after evaluation of the traditional design-bid-build process of
construction and of the Construction Manager/General Contractor
method in a public meeting, the regional transportation agency makes
a written finding that use of the Construction Manager/General
Contractor method on the specific project under
consideration will accomplish one or more of the following
objectives: reduce project costs, expedite the project's completion,
or provide features not achievable through the design-bid-build
method. This finding shall be made prior to the regional
transportation agency entering into a Construction Manager/General
Contractor method contract.
(b) Except as specified in subdivision (c), the regional
transportation agency shall comply with subdivision (f) of Section
1771.5 of the Labor Code, and shall reimburse the Department of
Industrial Relations for its reasonable and directly related costs of
performing prevailing wage monitoring and enforcement on public
works projects pursuant to rates established by the department as set
forth in subdivision (h) of Section 1771.5 of the Labor Code on
projects using the Construction Manager/General Contractor method
under this chapter. All moneys collected pursuant to this subdivision
shall be deposited in the State Public Works Enforcement Fund,
created by Section 1771.3 of the Labor Code, and shall be used only
for enforcement of prevailing wage requirements on those projects.
(c) In lieu of complying with subdivision (a),
(b), the regional transportation agency may elect to enter
into a collective bargaining agreement that binds all of the
contractors performing work on the project and that includes a
mechanism for resolving disputes about the payment of wages.
(d) (1) Within 180 days after the completion of a project using
the Construction Manager/General Contractor method, the regional
transportation agency shall prepare a report including all of the
following:
(A) Data on initial cost estimates, actual cost upon completion,
and the reasons for any difference.
(B) Estimated time for completion, actual time of completion, and
the reasons for any difference.
(C) The number and dollar value of any change orders for all
projects completed using the Construction Manager/General Contractor
method.
(2) A report required by this subdivision shall be posted on the
regional transportation agency's Internet Web site. The regional
transportation agency shall notify the Chair of the Assembly
Committee on Transportation and the Chair of the Senate Committee on
Transportation and Housing that the report is available online.
6976. A Construction Manager/General Contractor method project
shall progress as follows:
(a) A regional transportation agency that intends to use the
Construction Manager/General Contractor method shall adopt a
procedure for the evaluation and selection of a construction manager
in a public meeting. The procedure shall include a two-phased request
for qualifications (RFQ). Under Phase 1 of the RFQ, the Construction
Manager (CM) is identified using a qualifications-based selection
process. In Phase 2 of the RFQ, the CM transitions to the General
Contractor (GC) who completes the work under either a fixed price or
guaranteed maximum price.
(b) The procedures adopted by the regional transportation agency
shall include, at a minimum, all of the following:
(1) The criteria for membership in its selection panel.
(2) The evaluation criteria and relative weighting of the
evaluation criteria for scoring and ranking the construction manager
qualifications.
(3) If the regional transportation agency intends to establish a
preliminary list of the highest qualified firms who will be
subsequently interviewed prior to ranking the final list, the
evaluation criteria and relative weighting of the evaluation criteria
for scoring and ranking the construction manager interviews and the
method used to rank the final list using a combination of RFQ and
interview criteria.
(4) The minimum number, if any, of proposers who must respond to
the regional transportation agencies RFQ for the agency to use the
Construction Manager/General Contractor method.
(5) The maximum number, if any, of construction manager firms who
will be deemed qualified to continue to the interview phase, if used,
or to the negotiations.
(6) The process by which it will use an independent cost estimator
(ICE) as part of its negotiation for fixed price or guaranteed
maximum price construction services contract.
(7) Any specific subcontracting requirements deemed necessary by
the regional transportation agency in addition to that required by
existing statutes.
(a) (1) A regional transportation agency shall establish a
procedure for the evaluation and selection of a construction manager
through a request for qualifications (RFQ). The RFQ shall include,
but not be limited to, the following:
(A) If the entity is a partnership, limited partnership, or other
association, a list of all of the partners, general partners, or
association members known at the time of the bid submission who will
participate in the Construction Manager/General Contractor method
contract, including, but not limited to, subcontractors.
(B) Evidence that the members of the 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 construction of the project, as
well as a financial statement that assures the regional
transportation agency that the entity has the capacity to complete
the project, construction expertise, and an acceptable safety record.
(C) The licenses, registration, and credentials required to
construct the project, including information on the revocation or
suspension of any license, registration, or credential.
(D) Evidence that establishes that the entity has the capacity to
obtain all required payment and performance bonding, liability
insurance, and errors and omissions insurance.
(E) 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 (Public Law
91-596), settled against any member of the entity, and information
concerning workers' compensation experience history and worker safety
program.
(F) 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.
(G) Any instance in which the entity, or its owners, officers, or
managing employees, defaulted on a construction contract.
(H) 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 the Federal
Insurance Contributions Act (26 U.S.C. Sec. 3101 et seq.) withholding
requirements settled against any member of the entity.
(I) Information concerning the bankruptcy or receivership of any
member of the entity, including information concerning any work
completed by a surety.
(J) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the 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.
(K) 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 contract.
(L) For the purposes of this paragraph, a construction manager's
safety record shall be deemed acceptable if his or her experience
modification rate for the most recent three-year period is an average
of 1.00 or less, and his or her average 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 he or she is a party to an
alternative dispute resolution system as provided for in Section
3201.5 of the Labor Code.
(2) 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.
(b) For each RFQ, the regional transportation agency shall
generate a final list of qualified persons or firms that participated
in the RFQ prior to entering into negotiations on the contract or
contracts to which the RFQ applies.
(c) (1) For each RFQ, the regional transportation agency shall
establish a selection panel to evaluate and rank proposals. A person
who is a member of the selection panel shall not be a contractor
under the contract or provide construction services, materials, or
other services under the contract. The regional transportation agency
shall generate a final list of qualified persons or firms that
participated in the RFQ prior to entering into negotiations on the
contract or contracts to which the RFQ applies.
(2) The regional transportation agency and its selection panel
shall not request or consider fees, price, man-hours, or any other
cost information in its evaluation and ranking of proposals and
establishment of the final list for that contract.
(d) (1) For each RFQ, the regional transportation agency shall
enter into separate negotiations for the contract with the highest
qualified person or firm on the final list for that contract.
However, if the RFQ is for multiple contracts and specifies that all
of the multiple contracts will be awarded to a single construction
manager, there may be a single negotiation for all of the multiple
contracts. The negotiations shall include consideration of
compensation and other contract terms that the regional
transportation agency determines to be fair and reasonable to the
regional transportation agency. In making this decision, the regional
transportation agency shall take into account the estimated value,
the scope, the complexity, and the nature of the professional
services or construction services to be rendered. If the regional
transportation agency is not able to negotiate a satisfactory
contract with the highest qualified person or firm on the final list,
regarding compensation and on other contract terms the regional
transportation agency determines to be fair and reasonable, the
regional transportation agency shall formally terminate negotiations
with that person or firm. The regional transportation agency may
undertake negotiations with the next most qualified person or firm on
the final list in sequence until an agreement is reached or a
determination is made to reject all persons or firms on the final
list.
(2) If a contract for construction services is entered into
pursuant to this chapter and includes preconstruction services by the
construction manager, the regional transportation agency shall enter
into a written contract with the construction manager for
preconstruction services under which contract the regional
transportation agency shall pay the construction manager a fee for
preconstruction services in an amount agreed upon by the regional
transportation agency and the construction manager. The
preconstruction services contract may include fees for services to be
performed during the contract period provided, however, the regional
transportation agency shall not request or obtain a fixed price or a
guaranteed maximum price for the construction contract from the
construction manager or enter into a construction contract with the
construction manager until after the regional transportation agency
has entered into a services contract. A preconstruction services
contract shall provide for the subsequent negotiation for
construction of all or any discreet phase or phases of the project.
(3) A contract for construction services shall be awarded after
the plans have been sufficiently developed and either a fixed price
or a guaranteed maximum price has been successfully negotiated. In
the event that a fixed price or a guaranteed maximum price is not
negotiated, the regional transportation agency shall not award the
contract for construction services.
(4) The regional transportation agency is not required to award
the construction services contract.
(5) Construction shall not commence on any phase, package, or
element until the regional transportation agency and construction
manager agree in writing on either a fixed price that the regional
transportation agency will pay for the construction to be commenced
or a guaranteed maximum price for the construction to be commenced
and construction schedule for the project. The construction manager
shall perform not less than 30 percent of the work covered by the
fixed price or guaranteed maximum price agreement reached. Work that
is not performed directly by the construction manager shall be bid to
subcontractors pursuant to Section 6705.
(e) In the event the regional transportation agency and the
construction manager cannot successfully negotiate a fixed price or
guaranteed maximum price contract, the regional transportation agency
shall be able to, at its sole discretion, publicly advertise and
award the construction contract using the plans and
specifications developed with the preconstruction services provided
by construction manager input a lowest responsible
bidder or best value method . The construction manager shall
not be excluded from submitting a bid on this type of contract.
6978. All subcontractors bidding on contracts pursuant to this
chapter shall be afforded the protections contained in Chapter 4
(commencing with Section 4100). The construction manager
shall do all of the following:
(a) 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 regional
transportation agency.
(b) Provide a fixed date and time on which the subcontracted work
will be awarded in accordance with the procedure established pursuant
to this chapter.
(c) Comply with any subcontracting procedures adopted by the
regional transportation agency that were included in the regional
transportation agency's RFQ. If the regional transportation agency
has adopted procedures to prequalify public works contractors, the
construction manager may use the procedures to prequalify
subcontractors.
6980. Contracts awarded pursuant to this chapter shall be valid
until the project is completed.
6982. Nothing in this chapter is intended to affect, expand,
alter, or limit any rights or remedies otherwise available at law.
SEC. 2. 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.