BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 328|
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UNFINISHED BUSINESS
Bill No: SB 328
Author: Knight (R)
Amended: 8/12/13
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
SENATE FLOOR : 37-0, 4/29/13 (Consent)
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Monning, Nielsen, Padilla,
Pavley, Price, Roth, Steinberg, Walters, Wolk, Wright, Wyland,
Yee
NO VOTE RECORDED: Liu, Vacancy, Vacancy
ASSEMBLY FLOOR : 77-0, 8/19/13 - See last page for vote
SUBJECT : Counties: public works contracts
SOURCE : County of San Bernardino
DIGEST : This bill, until January 1, 2018, allows a county,
with the board of supervisors' approval, to use construction
manager (CM) at-risk construction contracts for erecting,
constructing, altering, repairing, or improving buildings owned
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or leased by the county. This bill provides that a county may
use a CM at-risk construction contract only for projects in the
county in excess of $1million, and allows a county to award the
CM at-risk construction contract using either the lowest
responsible bidder or best value method.
Assembly Amendments add a provision requiring counties to notify
the appropriate legislative policy committees with specified
information, remove the State Controller's involvement, and
reduce the sunset date by three years.
ANALYSIS : Existing law allows local officials to contract
with private construction project management firms for
professional 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:
1.Allows a county, with approval of the board of supervisors, to
utilize 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 the
county in excess of $1 million and may be awarded using either
the lowest responsible bidder or best value method to a CM
at-risk entity that possesses or that obtains sufficient
bonding to cover the contract amount for construction services
and risk and liability insurance as may be required by the
county. Any payment or performance bond written for the
purposes of this bill shall be written using a bond form
developed by the county.
2.Requires subcontractors that were not listed by a CM at-risk
entity as partners, general partners, or association members
in a partnership, limited partnership, or association in the
entity's CM at-risk bid submission to be awarded by the CM
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at-risk entity in accordance with the process set forth by the
county.
3.Requires all subcontractors bidding on contracts pursuant to
this bill to be afforded the protections contained in the
Subletting and Subcontracting Fair Practices Act, and requires
the CM at-risk entity to do both 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 county; and
B. Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure
established pursuant to this bill.
1.Requires a county that elects to proceed under this bill and
uses a CM at-risk contract for a building project to make a
copy of the contract available for public inspection on its
Internet Web site and notify the appropriate policy committees
of the Legislature with instructions on finding and accessing
the stored contract.
2.Provides that, if a county elects to award a project pursuant
to this bill, retention proceeds withheld by the county from
the CM at-risk entity shall not exceed 5% if a performance and
payment bond issued by an admitted surety insurer is required
in the solicitation of bids.
3.Provides that, in a contract between the CM at-risk entity and
any subcontractor, and in a contract between a subcontractor
and any subcontractors thereunder, the percentage of the
retention proceeds withheld may not exceed the percentage
specified in the contract between the county and the CM
at-risk entity. If the CM at-risk entity provides written
notice to any subcontractor that is not a member of the CM
at-risk entity, prior to or at the time the bid is requested,
that a bond may be required and the subcontractor subsequently
is unable or refuses to furnish a bond to the CM at-risk
entity, then the CM at-risk entity may withhold retention
proceeds in excess of the percentage specified in the contract
between the county and the CM at-risk entity from any payment
made by the CM at-risk entity to the subcontractor.
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4.Provides that, if a county elects to award a project pursuant
to this bill, contracts entered into under the provisions of
this bill between a county and a CM at-risk entity, and
between a CM at-risk entity and a contractor or subcontractor,
are subject to existing law governing indemnification
agreements in private commercial and public works construction
contracts, as specified.
5.Repeals this bill's provisions on January 1, 2018, unless a
later enacted statute, that is enacted before January 1, 2018,
deletes or extends that date.
6.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.
7.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.
Comments
According to the Senate Governance and Finance Committee
analysis, a method known as CM 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 CM at-risk method
allows the owner of a project to retain a "CM," 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 CM), 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 CM to work
together, similar to the design-build method. Before
construction can begin on a project, the owner and CM must agree
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on either a fixed price or "guaranteed maximum price" for the
project. The CM 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 CM
at-risk method for building construction projects.
Under the CM 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 CM must bid to
subcontractors.
State law does not authorize counties to use the CM at-risk
method for county construction projects.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/21/13)
County of San Bernardino (source)
California State Association of Counties
Rural County Representatives of California
Sacramento County Board of Supervisors
Stanislaus County Board of Supervisors
Urban Counties Caucus
ASSEMBLY FLOOR : 77-0, 8/19/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell,
Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson,
Perea, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: V. Manuel Pérez, Vacancy, Vacancy
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AB:ej 8/21/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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