BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 328| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 328 Author: Knight (R) Amended: 4/9/13 Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 6-0, 4/3/13 AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez NO VOTE RECORDED: Liu SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Counties: public works contracts SOURCE : County of San Bernardino DIGEST : This bill, until January 1, 2021, allows a county, with the board of supervisors' approval, to use construction manager at-risk construction contracts for erecting, constructing, altering, repairing, or improving buildings owned or leased by the county. This bill provides that a county may use a construction manager at-risk construction contract only for projects in the county in excess of $1,000,000, and allows a county to award the construction manager at-risk construction contract using either the lowest responsible bidder or best value method. ANALYSIS : Existing law allows local officials to contract with private construction project management firms for professional CONTINUED SB 328 Page 2 management, and supervision services for construction projects. Construction project management firms provide expertise and experience in construction project design review and evaluation, construction mobilization and supervision, bid evaluation, project scheduling, cost benefit analysis, claims review and negotiation, and general management and administration of a construction project. Local officials award contracts based on demonstrated competence and qualifications. Construction project management services can be used with any project delivery method. This bill defines "best value" as a value determined by objective criteria related to the experience of the entity and project personnel, project plan, financial strength of the entity, safety record of the entity, and price. This bill defines "construction manager at-risk contract" as a competitively procured contract by a county with an individual, partnership, joint venture, corporation, or other recognized legal entity, that is appropriately licensed in this state and that guarantees the cost of a project and furnishes construction management services, including, preparation and coordination of bid packages, scheduling, cost control, value engineering, evaluation, preconstruction services, and construction administration. Subcontractors that are not listed by a construction manager at-risk entity, as specified, shall be awarded by the construction manager at-risk entity in accordance with the process set forth by the county. The construction manager at-risk shall do both of the following: 1.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 county. 2.Provide a fixed date and time on which the subcontracted work will be awarded in accordance with the procedure established pursuant to this bill. This bill requires counties to submit a copy of every contract they enter into, subject to this bill's provisions, to the Controller's Office, in electronic format, to be posted on its CONTINUED SB 328 Page 3 Internet Web site. This bill sunsets counties' ability to use construction manager at-risk contracting on January 1, 2021. Comments According to the Senate Governance and Finance Committee analysis, a method known as construction manager at-risk is another approach to public works construction and delivery which combines elements of the design-bid-build and design-build methods, and uses construction project management services. The construction manager at-risk method allows the owner of a project to retain a "construction manager," who provides pre-construction services during the design period and later becomes the general contractor during the construction process. The owner has separate contracts for design and construction services (the construction manager), similar to the design-bid-build method. The owner may establish the separate contracts at the same time, however, thereby allowing the design party and the construction manager to work together, similar to the design-build method. Before construction can begin on a project, the owner and construction manager must agree on either a fixed price or "guaranteed maximum price" for the project. The construction manager is responsible for delivering the project within the agreed upon price, thereby assuming the risk for cost-overruns. The California Administrative Office of the Courts, University of California, California State University System, school districts, and some cities have used the construction manager at-risk method for building construction projects. Under the construction manager at-risk method, project delivery can occur in sequential or concurrent phases. Projects that have multiple components lend themselves to this method because the design and construction of different aspects of the project can occur at different times. In effect, the overall project can be broken into multiple components, which the construction manager must bid to subcontractors. State law does not authorize counties to use the construction manager at-risk method for county construction projects. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No CONTINUED SB 328 Page 4 SUPPORT : (Verified 4/22/13) County of San Bernardino (source) County of Stanislaus Rural County Representatives of California Urban Counties Caucus AB:ej 4/23/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED