BILL ANALYSIS Ó
SB 328
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Date of Hearing: July 3, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 328 (Knight) - As Amended: April 9, 2013
Policy Committee: Local
GovernmentVote:9-0
Accountability and Administrative Review
12-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes, until January 1, 2021, counties to use
construction manager at-risk contracts for projects in excess of
$1 million on county-owned or leased buildings. Specifically,
this bill:
1)Allows a county, with approval of the board of supervisors, to
utilize construction manager (CM) at-risk construction
contracts for the erection, construction, alteration, repair
or improvement of any building owned or leased by the county.
A CM at-risk construction contract may only be used for
projects in excess of $1 million and may be awarded using
either the lowest responsible bidder or best value method.
2)Requires a county that elects to proceed under this bill and
uses a CM at-risk contract for a building project to submit to
the office of the State Controller, in electronic format, a
copy of the CM at-risk contract.
3)Requires the State Controller to make the copies of contracts
it receives pursuant to this bill available for public
inspection on its Internet Web site.
FISCAL EFFECT
Minor costs to the State Controller of approximately $50,000,
depending on the number of contracts.
COMMENTS
SB 328
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1)Purpose . According to the author, SB 328 will equip counties
with an additional construction delivery method in furtherance
of good stewardship of public funds. A CM-at risk contract is
a competitively procured contract with an entity that
guarantees the cost of a project and furnishes construction
management services, including preparation and coordination of
bid packages, scheduling, cost control and construction
administration. The author states the bill provides
protections for subcontractors that bid on CM at-risk
contracts and requires counties to submit their CM at-risk
contracts to the State Controller, who must post the contracts
online for public inspection. The author notes the bill
provides a mechanism for legislative review by including a
repeal date of January 1, 2021.
2)Support . This bill is sponsored by the County of San
Bernardino, who argues this measure will allow counties to use
this well established project delivery method. They note
recent amendments provide additional layers of transparency by
requiring submitting of contracts to the State Controller and
a sunset date.
3)Opposition. The Controller opposes this bill unless it is
amended to delete the requirement that contracts be posted on
the Controller's website. The Controller points out the
office has no role in administering or overseeing a county's
use of CM contracts. Because of the lack of nexus, the
Controller is concerned the requirement will reduce
transparency as members of the public would not naturally seek
this information on the Controller's website.
4)Background . According to the American Institute of
Architects, construction management at-risk is a process that
allows the client of a project to choose the CM before the
design stage is complete. The CM is chosen based on
qualifications, and then the entire operation is centralized
under a single contract. The architect and CM work together
in order to cultivate and assay the design. Then, the CM
gives the client a guaranteed maximum price, and coordinates
all subcontract work. The architect/engineer (A/E) is hired
separately from the CM at-risk and the traditional client -
A/E relationship is maintained. A/Es can generally perform
the CM role.
SB 328
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5)Related legislation . AB 195 (Hall, 2013) extends the sunset
for the use of design-build by counties from July 1, 2014, to
July 1, 2016. AB 195 is on the Senate Floor.
6)Recommended amendment . The requirement for the Controller to
post the contracts raises a fiscal issue. The committee
recommends the following amendment be adopted to address the
fiscal issue while maintaining the bill's efforts at
maintaining transparency and facilitating the review likely to
occur when the sunset date approaches.
Page 3, line 17:
(d) A county that elects to proceed under this section and
uses a construction manager at-risk contract for a building
project shall submit to the office of the State Controller, in
electronic format, a copy of the construction manager at-risk
contract. The office of the State Controller shall make the
copies of contracts it receives pursuant to this subdivision
available for public inspection on its Internet Web site.
shall make copies of contracts available for public inspection
on its Internet web site. Each electing county shall also
notify the appropriate policy committees of the Legislature
with instructions on finding and accessing the stored
contracts.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081