Senate Bill No. 785

Introduced by Senator Wolk

February 22, 2013

An act to repeal Sections 14661 and 14661.1 of the Government Code, to amend Section 32132.5 of the Health and Safety Code, and to add Article 6 (commencing with Section 10186) to Chapter 1 of Part 2, and Article 4 (commencing with Section 22160) to Chapter 2 of Part 3, of Division 2 of, and to repeal Sections 20133, 20175.2, 20193, 20209, 20301.5, and 20688.6 of, and to repeal Article 6.7 (commencing with Section 20209), and Article 22 (commencing with Section 20360), of Chapter 1 of Part 3 of Division 2 of, the Public Contract Code, relating to design-build.

LEGISLATIVE COUNSEL’S DIGEST

SB 785, as introduced, Wolk. Design-build.

Existing law authorizes the Department of General Services, the Department of Corrections and Rehabilitation, and various local agencies to use the design-build procurement process for specified public works under different laws.

This bill would repeal those authorizations, and enact provisions that would authorize the Department of General Services, the Department of Corrections and Rehabilitation, and those local agencies, as defined, to use the design-build procurement process for specified public works. The bill would require moneys that are collected under these provisions to be deposited into the State Public Works Enforcement Fund, subject to appropriation by the Legislature. The bill would provide that specified information related to the procurement of design-build contracts is exempt from the California Public Records Act. The bill would require specified information to be verified under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program.

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: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

It is the intent of the Legislature to consolidate
existing design-build statutes and eliminate inconsistencies in
statutory language by adopting authority of general application to
identified agencies and repealing superseded sections.

SEC. 2.  

Section 14661 of the Government Code is repealed.

begin delete

14661.  

(a) For the purposes of this section, the definitions in
subdivision (a) of Section 13332.19 shall apply.

(b) Notwithstanding any provision of the Public Contract Code
or any other provision of law, when the Legislature authorizes the
use of the design-build construction procurement process for a
specific project, the Director of General Services may contract and
procure state office facilities and other buildings, structures, and
related facilities pursuant to this section.

(c) Prior to contracting with a design-build entity for the
procurement of state office facilities and other state buildings and
structures, the director shall:

(1) Prepare a program setting forth the performance criteria for
the design-build project. The performance criteria shall be prepared
by a design professional duly licensed and registered in the State
of California.

(2) (A) Establish a competitive prequalification and selection
process for design-build entities, including any subcontractors
listed at the time of bid, that clearly specifies the prequalification
criteria, and states the manner in which the winning design-build
entity will be selected.

(B) Prequalification shall be limited to consideration of all of
the following criteria:

(i) Possession of all required licenses, registration, and
credentials in good standing that are required to design and
construct the project.

(ii) Submission of evidence that establishes that the design-build
entity members have completed, or demonstrated the capability
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 design and construction
of the project.

(iii) Submission of a proposed project management plan that
establishes that the design-build entity has the experience,
competence, and capacity needed to effectively complete the
project.

(iv) Submission of evidence that establishes that the design-build
entity has the capacity to obtain all required payment and
performance bonding, liability insurance, and errors and omissions
insurance, as well as a financial statement that assures the
department that the design-build entity has the capacity to complete
the project.

(v) Provision of a declaration certifying that applying members
of the design-build entity have not had a surety company finish
work on any project within the last five years.

(vi) Provision of information and a declaration providing detail
concerning all of the following:

(I) Any construction or design claim or litigation totaling more
than five hundred thousand dollars ($500,000) or 5 percent of the
annual value of work performed, whichever is less, settled against
any member of the design-build entity over the last five years.

(II) Serious violations of the Occupational Safety and Health
Act, as provided in Part 1 (commencing with Section 6300) of
Division 5 of the Labor Code, settled against any member of the
design-build entity.

(III) Violations of federal or state law, including, but not limited
to, those laws governing the payment of wages, benefits, or
personal income tax withholding, or of Federal Insurance
Contributions Act (FICA) withholding requirements, state disability
insurance withholding, or unemployment insurance payment
requirements, settled against any member of the design-build entity
over the last five years. For the purposes of this subclause, only
violations by a design-build member as an employer shall be
deemed applicable, unless it is shown that the design-build entity
member, in his or her capacity as an employer, had knowledge of
his or her subcontractor’s violations or failed to comply with the
conditions set forth in subdivision (b) of Section 1775 of the Labor
Code.

(IV) Information required by Section 10162 of the Public
Contract Code.

(V) 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 or complaints.

(VI) Any conviction of any member of the design-build entity
of submitting a false or fraudulent claim to a public agency over
the last five years.

(vii) Provision of a declaration that the design-build entity will
comply with all other provisions of law applicable to the project,
including, but not limited to, the requirements of Chapter 1
(commencing with Section 1720) of Part 7 of Division 2 of the
Labor Code.

(C) The director, when requested by the design-build entity,
shall hold in confidence any information required by clauses (i)
to (vi), inclusive.

(D) Any declaration required under subparagraph (B) shall state
that reasonable diligence has been used in its preparation and that
it is true and complete to the best of the signer’s knowledge. A
person who certifies as true any material matter that he or she
knows to be false is guilty of a misdemeanor and shall be punished
by not more than one year in a county jail, by a fine of not more
than five thousand dollars ($5,000), or by both the fine and
imprisonment.

(3) (A) Determine, as he or she deems in the best interests of
the state, which of the following methods listed in subparagraph
(B) will be used as the process for the winning design-build entity.
The director shall provide a notification to the State Public Works
Board, regarding the method selected for determining the winning
design-build entity, at least 30 days prior to publicizing the
design-build solicitation package.

(B) The director shall make his or her determination by choosing
one of the following methods:

(i) A design-build competition based upon performance, price,
and other criteria set forth by the department in the design-build
solicitation package. The department shall establish technical
criteria and methodology, including price, to evaluate proposals
and shall describe the criteria and methodology in the design-build
solicitation package. Award shall be made to the design-build
entity whose proposal is judged as providing the best value in
meeting the interest of the department and meeting the objectives
of the project. A project with an approved budget of ten million
dollars ($10,000,000) or more may be awarded pursuant to this
clause.

(ii) A design-build competition based upon performance and
other criteria set forth by the department in the design-build
solicitation package. Criteria used in this evaluation of proposals
may include, but need not be limited to, items such as proposed
design approach, life-cycle costs, project features, and functions.
However, any criteria and methods used to evaluate proposals shall
be limited to those contained in the design-build solicitation
package. Award shall be made to the design-build entity whose
proposal is judged as providing the best value, for the lowest price,
meeting the interests of the department and meeting the objectives
of the project. A project with an approved budget of ten million
dollars ($10,000,000) or more may be awarded pursuant to this
clause.

(iii) A design-build competition based upon program
requirements and a detailed scope of work, including any
performance criteria and concept drawings set forth by the
department in the design-build solicitation package. Award shall
be made on the basis of the lowest responsible bid. A project with
an approved budget of two hundred fifty thousand dollars
($250,000) or more may be awarded pursuant to this clause.

(4) For the purposes of this subdivision, the following definitions
shall apply:

(A) “Best interest of the state” means a design-build process
that is projected by the director to reduce the project delivery
schedule and total cost of a project while maintaining a high level
of quality workmanship and materials, when compared to the
traditional design-bid-build process.

(B) “Best value” means a value determined by objective criteria
that may include, but is not limited to, price, features, functions,
life cycle costs, experience, and other criteria deemed appropriate
by the department.

(d) The Legislature recognizes that the design-build entity is
charged with performing both design and construction. Because
a design-build contract may be awarded prior to the completion
of the design, it is often impracticable for the design-build entity
to list all subcontractors at the time of the award. As a result, the
subcontractor listing requirements contained in Chapter 4
(commencing with Section 4100) of Part 1 of Division 2 of the
Public Contract Code can create a conflict with the implementation
of the design-build process by requiring all subcontractors to be
listed at a time when a sufficient set of plans may not be available.
It is the intent of the Legislature to establish a clear process for
the selection and award of subcontracts entered into pursuant to
this section in a manner that retains protection for subcontractors
while enabling design-build projects to be administered in an
efficient fashion. Therefore, all of the following requirements shall
apply to subcontractors, licensed pursuant to Chapter 9
(commencing with Section 7000) of Division 3 of the Business
and Professions Code, that are employed on design-build projects
undertaken pursuant to this section:

(1) The department, in each design-build solicitation package,
may identify types of subcontractors, by subcontractor license
classification, that will be listed by the design-build entity at the
time of the bid. In selecting the subcontractors that will be listed
by the design-build entity, the department shall limit the
identification to only those license classifications deemed essential
for proper completion of the project. In no event, however, may
the department specify more than five licensed subcontractor
classifications. In addition, at its discretion, the design-build entity
may list an additional two subcontractors, identified by
subcontractor license classification, that will perform design or
construction work, or both, on the project. In no event shall the
design-build entity list at the time of bid a total amount of
subcontractors that will perform design or construction work, or
both, in a total of more than seven subcontractor license
classifications on a project. All subcontractors that are listed at the
time of bid shall be afforded all of the protection contained in
Chapter 4 (commencing with Section 4100) of Part 1 of Division
2 of the Public Contract Code. All subcontracts that were not listed
by the design-build entity at the time of bid shall be awarded in
accordance with paragraph (2).

(2) All subcontracts that were not to be performed by the
design-build entity in accordance with paragraph (1) shall be
competitively bid and awarded by the design-build entity, in
accordance with the design-build process set forth by the
department in the design-build solicitation package. The
design-build entity shall do all of the following:

(A) Provide public notice of the availability of work to be
subcontracted in accordance with Section 10140 of the Public
Contract Code.

(B) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with Section 10141 of the
Public Contract Code.

(C) As authorized by the department, establish reasonable
prequalification criteria and standards, limited in scope to those
detailed in paragraph (2) of subdivision (c).

(D) Provide that the subcontracted work shall be awarded to
the lowest responsible bidder.

(e) This section shall not be construed and is not intended to
extend or limit the authority specified in Section 19130.

(f) Any design-build entity that is selected to design and
construct a project pursuant to this section shall possess or obtain
sufficient bonding consistent with applicable provisions of the
Public Contract Code. Nothing in this section shall prohibit a
general or engineering contractor from being designated the lead
entity on a design-build entity for the purposes of purchasing
necessary bonding to cover the activities of the design-build entity.

(g) Any payment or performance bond written for the purposes
of this section shall use a bond form developed by the department.
In developing the bond form, the department shall consult with
the surety industry to achieve a bond form that is consistent with
surety industry standards, while protecting the interests of the state.

end delete

SEC. 3.  

Section 14661.1 of the Government Code is repealed.

begin delete

14661.1.  

(a) For purposes of this section, the definitions in
subdivision (a) of Section 13332.19 shall apply. For purposes of
subdivision (a) of Section 13332.19, references to the Department
of General Services shall be deemed to be references to the
Department of General Services or the Department of Corrections
and Rehabilitation, as applicable.

(b) Notwithstanding any provision of the Public Contract Code
or any other provision of law, when the Legislature appropriates
funds for a specific project, or for any project using funds
appropriated pursuant to Chapter 3.2.1 (commencing with Section
15819.40) or 3.2.2 (commencing with Section 15819.41) of Part
10b, the Director of General Services or the Secretary of the
Department of Corrections and Rehabilitation, as appropriate, may
contract and procure state office facilities and prison facilities
pursuant to this section.

(c) Prior to contracting with a design-build entity for the
procurement of a state office facility or prison facility under this
section, the Director of General Services or the Secretary of the
Department of Corrections and Rehabilitation shall:

(1) Prepare a program setting forth the performance criteria for
the design-build project. The performance criteria shall be prepared
by a design professional duly licensed and registered in the State
of California.

(2) (A) Establish a competitive prequalification and selection
process for design-build entities, including any subcontractors
listed at the time of bid, that clearly specifies the prequalification
criteria, and states the manner in which the winning design-build
entity will be selected.

(B) Prequalification shall be limited to consideration of all of
the following criteria:

(i) Possession of all required licenses, registration, and
credentials in good standing that are required to design and
construct the project.

(ii) Submission of evidence that establishes that the design-build
entity members have completed, or demonstrated the capability
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 design and construction
of the project.

(iii) Submission of a proposed project management plan that
establishes that the design-build entity has the experience,
competence, and capacity needed to effectively complete the
project.

(iv) Submission of evidence that establishes that the design-build
entity has the capacity to obtain all required payment and
performance bonding, liability insurance, and errors and omissions
insurance, as well as a financial statement that assures the
Department of General Services or the Department of Corrections
and Rehabilitation that the design-build entity has the capacity to
complete the project.

(v) Provision of a declaration certifying that applying members
of the design-build entity have not had a surety company finish
work on any project within the last five years.

(vi) Provision of information and a declaration providing detail
concerning all of the following:

(I) Any construction or design claim or litigation totaling more
than five hundred thousand dollars ($500,000) or 5 percent of the
annual value of work performed, whichever is less, settled against
any member of the design-build entity over the last five years.

(II) Serious violations of the California Occupational Safety
and Health Act of 1973, as provided in Part 1 (commencing with
Section 6300) of Division 5 of the Labor Code, settled against any
member of the design-build entity.

(III) Violations of federal or state law, including, but not limited
to, those laws governing the payment of wages, benefits, or
personal income tax withholding, of Federal Insurance
Contributions Act (FICA) withholding requirements, state disability
insurance withholding, or unemployment insurance payment
requirements, settled against any member of the design-build entity
over the last five years. For purposes of this subclause, only
violations by a design-build member as an employer shall be
deemed applicable, unless it is shown that the design-build entity
member, in his or her capacity as an employer, had knowledge of
his or her subcontractor’s violations or failed to comply with the
conditions set forth in subdivision (b) of Section 1775 of the Labor
Code.

(IV) Information required by Section 10162 of the Public
Contract Code.

(V) 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 or complaints.

(VI) Any conviction of any member of the design-build entity
of submitting a false or fraudulent claim to a public agency over
the last five years.

(vii) Provision of a declaration that the design-build entity will
comply with all other provisions of law applicable to the project,
including, but not limited to, the requirements of Chapter 1
(commencing with Section 1720) of Part 7 of Division 2 of the
Labor Code.

(C) The Director of General Services or the Secretary of the
Department of Corrections and Rehabilitation, when requested by
the design-build entity, shall hold in confidence any information
required by clauses (i) to (vi), inclusive, of subparagraph (B).

(D) Any declaration required under subparagraph (B) shall state
that reasonable diligence has been used in its preparation and that
it is true and complete to the best of the signer’s knowledge. A
person who certifies as true any material matter that he or she
knows to be false is guilty of a misdemeanor and shall be punished
by not more than one year in a county jail, by a fine of not more
than five thousand dollars ($5,000), or by both the fine and
imprisonment.

(3) (A) Determine, as he or she deems in the best interests of
the state, which of the following methods listed in subparagraph
(B) will be used as the process for the winning design-build entity.
He or she shall provide a notification to the State Public Works
Board, regarding the method selected for determining the winning
design-build entity, at least 30 days prior to publicizing the
design-build solicitation package.

(B) The Director of General Services or the Secretary of the
Department of Corrections and Rehabilitation shall make his or
her determination by choosing one of the following methods:

(i) A design-build competition based upon performance, price,
and other criteria set forth by the Department of General Services
or the Department of Corrections and Rehabilitation in the
design-build solicitation package. The Department of General
Services or the Department of Corrections and Rehabilitation shall
establish technical criteria and methodology, including price, to
evaluate proposals and shall describe the criteria and methodology
in the design-build solicitation package. Award shall be made to
the design-build entity whose proposal is judged as providing the
best value in meeting the interests of the Department of General
Services or the Department of Corrections and Rehabilitation and
meeting the objectives of the project. A project with an approved
budget of ten million dollars ($10,000,000) or more may be
awarded pursuant to this clause.

(ii) A design-build competition based upon performance and
other criteria set forth by the Department of General Services or
the Department of Corrections and Rehabilitation in the
design-build solicitation package. Criteria used in this evaluation
of proposals may include, but need not be limited to, items such
as proposed design approach, life-cycle costs, project features, and
functions. However, any criteria and methods used to evaluate
proposals shall be limited to those contained in the design-build
solicitation package. Award shall be made to the design-build
entity whose proposal is judged as providing the best value, for
the lowest price, meeting the interests of the Department of General
Services or the Department of Corrections and Rehabilitation and
meeting the objectives of the project. A project with an approved
budget of ten million dollars ($10,000,000) or more may be
awarded pursuant to this clause.

(iii) A design-build competition based upon program
requirements and a detailed scope of work, including any
performance criteria and concept drawings set forth by the
Department of General Services or the Department of Corrections
and Rehabilitation in the design-build solicitation package. Award
shall be made on the basis of the lowest responsible bid. A project
with an approved budget of two hundred fifty thousand dollars
($250,000) or more may be awarded pursuant to this clause.

(4) For purposes of this subdivision, the following definitions
shall apply:

(A) “Best interest of the state” means a design-build process
that is projected by the Director of General Services or the
Secretary of the Department of Corrections and Rehabilitation to
reduce the project delivery schedule and total cost of a project
while maintaining a high level of quality workmanship and
materials, when compared to the traditional design-bid-build
process.

(B) “Best value” means a value determined by objective criteria
that may include, but are not limited to, price, features, functions,
life-cycle costs, experience, and other criteria deemed appropriate
by the Department of General Services or the Department of
Corrections and Rehabilitation.

(d) The Legislature recognizes that the design-build entity is
charged with performing both design and construction. Because
a design-build contract may be awarded prior to the completion
of the design, it is often impracticable for the design-build entity
to list all subcontractors at the time of the award. As a result, the
subcontractor listing requirements contained in Chapter 4
(commencing with Section 4100) of Part 1 of Division 2 of the
Public Contract Code can create a conflict with the implementation
of the design-build process by requiring all subcontractors to be
listed at a time when a sufficient set of plans shall not be available.
It is the intent of the Legislature to establish a clear process for
the selection and award of subcontracts entered into pursuant to
this section in a manner that retains protection for subcontractors
while enabling design-build projects to be administered in an
efficient fashion. Therefore, all of the following requirements shall
apply to subcontractors, licensed pursuant to Chapter 9
(commencing with Section 7000) of Division 3 of the Business
and Professions Code, that are employed on design-build projects
undertaken pursuant to this section:

(1) The Department of General Services and the Department of
Corrections and Rehabilitation, in each design-build solicitation
package, may identify types of subcontractors, by subcontractor
license classification, that will be listed by the design-build entity
at the time of the bid. In selecting the subcontractors that will be
listed by the design-build entity, the Department of General
Services and the Department of Corrections and Rehabilitation
shall limit the identification to only those license classifications
deemed essential for proper completion of the project. In no event,
however, may the Department of General Services or the
Department of Corrections and Rehabilitation specify more than
five licensed subcontractor classifications. In addition, at its
discretion, the design-build entity may list an additional two
subcontractors, identified by subcontractor license classification,
that will perform design or construction work, or both, on the
project. In no event shall the design-build entity list at the time of
bid a total number of subcontractors that will perform design or
construction work, or both, in a total of more than seven
subcontractor license classifications on a project. All subcontractors
that are listed at the time of bid shall be afforded all of the
protection contained in Chapter 4 (commencing with Section 4100)
of Part 1 of Division 2 of the Public Contract Code. All
subcontracts that were not listed by the design-build entity at the
time of bid shall be awarded in accordance with paragraph (2).

(2) All subcontracts that were not to be performed by the
design-build entity in accordance with paragraph (1) shall be
competitively bid and awarded by the design-build entity, in
accordance with the design-build process set forth by the
Department of General Services or the Department of Corrections
and Rehabilitation in the design-build solicitation package. The
design-build entity shall do all of the following:

(A) Provide public notice of the availability of work to be
subcontracted in accordance with Section 10140 of the Public
Contract Code.

(B) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with Section 10141 of the
Public Contract Code.

(C) As authorized by the Department of General Services or
the Department of Corrections and Rehabilitation, establish
reasonable prequalification criteria and standards, limited in scope
to those detailed in paragraph (2) of subdivision (c).

(D) Provide that the subcontracted work shall be awarded to
the lowest responsible bidder.

(e) This section shall not be construed and is not intended to
extend or limit the authority specified in Section 19130.

(f) Any design-build entity that is selected to design and
construct a project pursuant to this section shall possess or obtain
sufficient bonding consistent with applicable provisions of the
Public Contract Code. Nothing in this section shall prohibit a
general or engineering contractor from being designated the lead
entity on a design-build entity for the purposes of purchasing
necessary bonding to cover the activities of the design-build entity.

(g) Any payment or performance bond written for the purposes
of this section shall use a bond form developed by the Department
of General Services or the Department of Corrections and
Rehabilitation. In developing the bond form, the Department of
General Services or the Department of Corrections and
Rehabilitation shall consult with the surety industry to achieve a
bond form that is consistent with surety industry standards, while
protecting the interests of the state.

(h) The Department of General Services or the Department of
Corrections and Rehabilitation, as appropriate, shall each submit
to the Joint Legislative Budget Committee, before January 1, 2014,
a report containing a description of each public works project
procured by that department through the design-build process
described in this section that is completed after January 1, 2009,
and before December 1, 2013. The report shall include, but shall
not be limited to, all of the following information:

(1) The type of project.

(2) The gross square footage of the project.

(3) The design-build entity that was awarded the project.

(4) The estimated and actual project costs.

(5) An assessment of the prequalification process and criteria.

(6) An assessment of the effect of any retention on the project
made under the law.

(7) A description of the method used to award the contract. If
the best value method was used, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(i) The authority provided under this section shall be in addition
to the authority provided to the Department of General Services
pursuant to Section 4 of Chapter 252 of the Statutes of 1998, as
amended by Section 3 of Chapter 154 of the Statutes of 2007. The
authority under this section and Section 70391.7 shall apply to a
total of not more than five state office facilities, prison facilities,
or court facilities, which shall be determined pursuant to this
subdivision.

(1) In order to enter into a contract utilizing the procurement
method authorized under this section, the Director of General
Services or the Secretary of the Department of Corrections and
Rehabilitation shall submit a request to the Department of Finance.

(2) The Department of Finance shall make a determination
whether to approve or deny a request made pursuant to paragraph
(1) if the design-build project requested will not exceed the five
facilities maximum set forth in this section and Section 70391.7.

(3) After receiving notification that the Department of Finance
has approved the request and that the Legislature has appropriated
funds for a specific project, the director or secretary may enter into
a design-build contract under this section.

(j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available under the law.

end delete

SEC. 4.  

Section 32132.5 of the Health and Safety Code is
amended to read:

32132.5.  

(a) Notwithstanding Section 32132 or any other
provision of law, upon approval by the board of directors of the
Sonoma Valley Health Care District, the design-build procedure
described in begin delete Section 20133 end delete begin insert Article 6 (commencing with Section
10186) of Chapter 1 of Part 2 of Division 2 end insert of the Public Contract
Code may be used to assign contracts for the construction of a
building or improvements directly related to construction of a
hospital or health facility building at the Sonoma Valley Hospital.

(b) For purposes of this section, all references in begin delete Section 20133 end delete
begin insert Article 6 (commencing with Section 10186) of Chapter 1 of Part
2 of Division 2 end insert of the Public Contract Code to “county” and begin delete “board
of supervisors” end delete begin insert “governing body end insert begin insert ” end insert shall mean the Sonoma Valley
Health Care District begin delete and its board of directors end delete .

(c) A hospital building project utilizing the design-build process
authorized by subdivision (a) shall be reviewed and inspected in
accordance with the standards and requirements of the Alfred E.
Alquist Hospital Facilities Seismic Safety Act of 1983 (Chapter 1
(commencing with Section 129675) of Part 7 of Division 107).

SEC. 5.  

Article 6 (commencing with Section 10186) is added
to Chapter 1 of Part 2 of Division 2 of the Public Contract Code,
to read:

 

Article 6.  State Agency Design-Build Projects

 

10186.  

(a)  The Legislature finds and declares that the
design-build method of project delivery, using a best value
procurement methodology, has been authorized for various
agencies that have reported benefits from such projects including
reduced project costs, expedited project completion, and design
features that are not achievable through the traditional
design-bid-build method.

(b) It is the intent of the Legislature that the following occur:

(1) This article provides general authorization for certain state
agencies to use design-build for projects, excluding projects on
the state highway system.

(2) This article shall not be deemed to provide a preference for
the design-build method over other procurement methodologies.

10187.  

For purposes of this article, the following definitions
apply:

(a) “Best value” means a value determined by evaluation of
proposals with reference to specified criteria objectively applied,
including, but not limited to, price, quality of technical proposals,
qualifications of key personnel, and other criteria deemed
appropriate by the director. A best value determination may entail
selection of the lowest priced technically acceptable proposals or
selection of the best proposal for a fixed price established by the
procuring agency, or it may consist of a tradeoff between price
and other specified factors.

(b) “Construction subcontract” means each subcontract awarded
by the design-build entity to a subcontractor that will perform work
or labor or render service to the design-build entity in or about the
construction of the work or improvement, or a subcontractor
licensed by the State of California that, under subcontract to the
design-build entity, specially fabricates and installs a portion of
the work or improvement according to detailed drawings contained
in the plans and specifications produced by the design-build team.

(c) “Department” means the Department of General Services
and the Department of Corrections and Rehabilitation.

(d) “Design-build” means a project delivery process in which
both the design and construction of a project are procured from a
single entity.

(e) “Design-build entity” means a corporation, limited liability
company, partnership, joint venture, or other legal entity that is
able to provide appropriately licensed contracting, architectural,
and engineering services as needed pursuant to a design-build
contract.

(f) “Design-build team” means the design-build entity itself and
the individuals and other entities identified by the design-build
entity as members of its team.

(g) “Director” means, with respect to procurements undertaken
by the Department of General Services, the Director of General
Services or, with respect to procurements undertaken by the
Department of Corrections and Rehabilitation, the secretary of that
department.

10188.  

(a) Notwithstanding any other law, the director,
following notification to the State Public Works Board, may
procure design-build contracts for public works projects in excess
of one million dollars ($1,000,000), awarding the contract using
either the low bid or best value, provided that this article shall not
apply to any projects on the state highway system.

(b) The director shall develop guidelines for a standard
organizational conflict-of-interest policy, consistent with applicable
law, regarding the ability of a person or entity, that performs
services for the department relating to the solicitation of a
design-build project, to submit a proposal as a design-build entity,
or to join a design-build team. This conflict-of-interest policy shall
apply to each department entering into design-build contracts
authorized under this article.

10189.  

(a) For contracts for public works projects awarded on
or after the effective date of the regulations adopted by the
Department of Industrial Relations pursuant to subdivision (g) of
Section 1771.5 of the Labor Code, the department 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. 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, subject to appropriation by the Legislature, be used only
for enforcement of prevailing wage requirements on those projects.

(b) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the
department may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters 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.

10190.  

The director shall notify the State Public Works Board
regarding the method to be used for selecting the design-build
entity, prior to advertising the design-build project.

10191.  

The procurement process for the design-build projects
shall progress as follows:

(a) The director shall prepare a set of documents setting forth
the scope and estimated price of the project. The documents may
include, but need not be limited to, the size, type, and desired
design character of the project, performance specifications covering
the quality of materials, equipment, workmanship, preliminary
plans or building layouts, or any other information deemed
necessary to describe adequately the department’s needs. The
performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.

(b) Based on the documents prepared under subdivision (a), the
director shall prepare and issue a request for qualifications in order
to prequalify or short-list the design-build entities whose proposals
shall be evaluated for final selection. The request for qualifications
shall include, but need not be limited to, the following elements:

(1) Identification of the basic scope and needs of the project or
contract, the expected cost range, the methodology that will be
used by the department to evaluate proposals, the procedure for
final selection of the design-build entity, and any other information
deemed necessary by the director to inform interested parties of
the contracting opportunity.

(2) (A) Significant factors that the department reasonably
expects to consider in evaluating qualifications, including technical
design and construction expertise, skilled labor force availability,
and all other nonprice-related factors.

(B) For purposes of subparagraph (A), skilled labor force
availability shall be deemed satisfied by the existence of an
agreement with a registered apprenticeship program, approved by
the California Apprenticeship Council, that has graduated at least
one apprentice in each of the preceding five years. This graduation
requirement shall not apply to programs providing apprenticeship
training for any craft that was first deemed by the federal
Department of Labor and the Department of Industrial Relations
to be an apprenticeable craft within the five years prior to the
effective date of this article.

(3) A standard template request for statements of qualifications
prepared by the department. In preparing the standard template,
the department may consult with the construction industry, the
building trades and surety industry, and other agencies interested
in using the authorization provided by this article. The template
shall require the following information:

(A) If the design-build entity is a privately held corporation,
limited liability company, partnership, or joint venture, a listing
of all of the shareholders, partners, or members known at the time
of statement of qualification submission who will perform work
on the project.

(B) Evidence that the members of the design-build team 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
design and construction of the project, and a financial statement
that ensures that the design-build entity has the capacity to
complete the project.

(C) The licenses, registration, and credentials required to design
and construct the project, including, but not limited to, information
on the revocation or suspension of any license, credential, or
registration.

(D) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(E) Information concerning workers’ compensation experience
history and a worker safety program.

(F) If the proposed design-build entity is a corporation, limited
liability company, partnership, joint venture, or other legal entity,
a copy of the organizational documents or agreement committing
to form the organization.

(G) An acceptable safety record. A proposer’s safety record
shall be deemed acceptable if its experience modification rate for
the most recent three-year period is an average of 1.00 or less, and
its average total recordable injury or 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
the proposer is a party to an alternative dispute resolution system
as provided for in Section 3201.5 of the Labor Code.

(4) (A) The information required under this subdivision shall
be certified under penalty of perjury by the design-build entity and
its general partners or joint venture members.

(B) Information required under this subdivision that is not
otherwise a public record under 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.

(c) Based on the documents prepared as described in subdivision
(a), the director shall prepare a request for proposals that invites
prequalified or short-listed entities to submit competitive sealed
proposals in the manner prescribed by the department. The request
for proposals shall include, but need not be limited to, the following
elements:

(1) Identification of the basic scope and needs of the project or
contract, the estimated cost of the project, the methodology that
will be used by the department to evaluate proposals, whether the
contract will be awarded on the basis of low bid or best value, and
any other information deemed necessary by the department to
inform interested parties of the contracting opportunity.

(2) Significant factors that the department reasonably expects
to consider in evaluating proposals, including, but not limited to,
cost or price and all nonprice-related factors.

(3) The relative importance or the weight assigned to each of
the factors identified in the request for proposals.

(4) Where a best value selection method is used, the department
may reserve the right to request proposal revisions and hold
discussions and negotiations with responsive proposers, in which
case the department shall so specify in the request for proposals
and shall publish separately or incorporate into the request for
proposals applicable procedures to be observed by the department
to ensure that any discussions or negotiations are conducted in
good faith.

(d) For those projects utilizing low bid as the final selection
method, the competitive bidding process shall result in lump-sum
bids by the prequalified or short-listed design-build entities, and
awards shall be made to the design-build entity that is the lowest
responsible bidder.

(e) For those projects utilizing best value as a selection method,
the design-build competition shall progress as follows:

(1) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposals.

(2) Pursuant to subdivision (c), the department may hold
discussions or negotiations with responsive proposers using the
process articulated in the department’s request for proposals.

(3) When the evaluation is complete, the responsive proposers
shall be ranked based on a determination of value provided,
provided that no more than three proposers are required to be
ranked.

(4) The award of the contract shall be made to the responsible
design-build entity whose proposal is determined by the director
to have offered the best value to the public.

(5) Notwithstanding any other provision of this code, upon
issuance of a contract award, the director shall publicly announce
its award, identifying the design-build entity to which the award
is made, along with a written decision supporting its contract award
and stating the basis of the award.

(6) The written decision supporting the director’s contract award,
described in paragraph (5), and the contract file shall provide
sufficient information to satisfy an external audit.

10192.  

(a) The design-build entity shall provide payment and
performance bonds for the project in the form and in the amount
required by the director, and issued by a California admitted surety.
The amount of the payment bond shall not be less than the amount
of the performance bond.

(b) The design-build contract shall require errors and omissions
insurance coverage for the design elements of the project.

(c) The department shall develop a standard form of payment
and performance bond for its design-build projects.

10193.  

(a) The department, in each design-build request for
proposals, may identify specific types of subcontractors that must
be included in the design-build entity statement of qualifications
and proposal. All construction subcontractors that are identified
in the proposal shall be afforded all the protections of Chapter 4
(commencing with Section 4100) of Part 1.

(b) Following award of the design-build contract, the
design-build entity shall proceed as follows in awarding
construction subcontracts with a value exceeding one-half of 1
percent of the contract price allocable to construction work:

(1) Provide public notice of availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the department,
including a fixed date and time on which qualifications statements,
bids, or proposals will be due.

(2) Establish reasonable qualification criteria and standards.

(3) Award the subcontract either on a best value basis or to the
lowest responsible bidder. The process may include prequalification
or short-listing. The foregoing process does not apply to
construction subcontractors listed in the original proposal.
Subcontractors awarded construction subcontracts under this
subdivision shall be afforded all the protections of Chapter 4
(commencing with Section 4100) of Part 1.

10194.  

(a) If the department elects to award a project pursuant
to this article, retention proceeds withheld by the department from
the design-build entity shall not exceed 5 percent, except as
otherwise specified in this section.

(b) (1) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the department and the design-build entity.

(2) This subdivision shall not apply if the design-build entity
provides written notice to any subcontractor that is not a member
of the design-build entity, prior to, or at the time the bid is
requested from the subcontractor, that a bond may be required and
the subcontractor subsequently is unable or refuses to furnish a
bond to the design-build entity, then the design-build entity may
withhold retention proceeds in excess of the percentage specified
in the contract between the department and the design-build entity
from any payment made by the design-build entity to the
subcontractor.

(3) Notwithstanding any other provision of this section, the
retention proceeds withheld from any payment by a department
from the original design-build entity, by the original design-build
entity contractor from any subcontractor, and by a subcontractor
from any subcontractor thereunder, may exceed 5 percent on
specific projects where the director has made a finding prior to the
proposal due date that the project is substantially complex and
therefore requires a higher retention amount than 5 percent, and
the department includes both this finding and the actual retention
amount in the procurement documents.

10194.  

Nothing in this article affects, expands, alters, or limits
any rights or remedies otherwise available at law.

SEC. 6.  

Section 20133 of the Public Contract Code is repealed.

begin delete

20133.  

(a)  A county, with approval of the board of
supervisors, may utilize an alternative procedure for bidding on
construction projects in the county in excess of two million five
hundred thousand dollars ($2,500,000) and may award the project
using either the lowest responsible bidder or by best value.

(b) (1) It is the intent of the Legislature to enable counties to
utilize design-build for buildings and county sanitation wastewater
treatment facilities. It is not the intent of the Legislature to
authorize this procedure for other infrastructure, including, but not
limited to, streets and highways, public rail transit, or water
resources facilities and infrastructures.

(2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles
and responsibilities of each participant in the design-build process.

(3) (A) For contracts for public works projects awarded prior
to the effective date of regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, if the board of supervisors elects to proceed
under this section, the board of supervisors shall establish and
enforce a labor compliance program containing the requirements
outlined in Section 1771.5 of the Labor Code, or it shall contract
with a third party to operate a labor compliance program containing
the requirements outlined in Section 1771.5 of the Labor Code.
This requirement shall not apply to any projects where the county
or the design-build entity has entered into a collective bargaining
agreement that binds all of the contractors performing work on the
projects.

(B) For contracts for public works projects awarded on or after
the effective date of regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the board of supervisors shall reimburse the
department 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.
All moneys collected pursuant to this paragraph 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 reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the board
of supervisors may elect to continue operating an existing
previously approved labor compliance program to monitor and
enforce prevailing wage requirements on the project if it has either
not contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters 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.

(c) As used in this section:

(1) “Best value” means a value determined by objective criteria
related to price, features, functions, and life-cycle costs.

(2) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.

(4) “Project” means the construction of a building and
improvements directly related to the construction of a building,
and county sanitation wastewater treatment facilities, but does not
include the construction of other infrastructure, including, but not
limited to, streets and highways, public rail transit, or water
resources facilities and infrastructure.

(d) Design-build projects shall progress in a four-step process,
as follows:

(1) (A) The county shall prepare a set of documents setting
forth the scope of the project. The documents may include, but are
not limited to, the size, type, and desired design character of the
public improvement, performance specifications covering the
quality of materials, equipment, and workmanship, preliminary
plans or building layouts, or any other information deemed
necessary to describe adequately the county’s needs. The
performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.

(B) Any architect or engineer retained by the county to assist
in the development of the project specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.

(2) (A) Based on the documents prepared in paragraph (1), the
county shall prepare a request for proposals that invites interested
parties to submit competitive sealed proposals in the manner
prescribed by the county. The request for proposals shall include,
but is not limited to, the following elements:

(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the county to inform interested parties of the
contracting opportunity, to include the methodology that will be
used by the county to evaluate proposals and specifically if the
contract will be awarded to the lowest responsible bidder.

(ii) Significant objective factors that the county reasonably
expects to consider in evaluating proposals, including cost or price
and all nonprice related factors.

(iii) The relative importance of weight assigned to each of the
factors identified in the request for proposals.

(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors other than cost or price when
combined are:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(C) If the county chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately or incorporate
into the request for proposal applicable rules and procedures to be
observed by the county to ensure that any discussions or
negotiations are conducted in good faith.

(3) (A)  The county shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by
the county. In preparing the questionnaire, the county shall consult
with the construction industry, including representatives of the
building trades and surety industry. This questionnaire shall require
information including, but not limited to, all of the following:

(i) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members known at the time of bid submission who
will participate in the design-build contract, including, but not
limited to, mechanical subcontractors.

(ii) Evidence that the members of the design-build 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
design and construction of the project, as well as a financial
statement that assures the county that the design-build entity has
the capacity to complete the project.

(iii) The licenses, registration, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(v) 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 design-build entity,
and information concerning workers’ compensation experience
history and worker safety program.

(vi) 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.

(vii) Any instance in which the entity, or its owners, officers,
or managing employees, defaulted on a construction contract.

(viii) 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 Federal Insurance Contributions Act (FICA; 26 U.S.C. Sec.
3101 et seq.) withholding requirements settled against any member
of the design-build entity.

(ix) Information concerning the bankruptcy or receivership of
any member of the design-build entity, including information
concerning any work completed by a surety.

(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build 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.

(xi) In the case of a partnership or an 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 design-build
contract.

(xii) (I) Any instance in which the entity, or any of its members,
owners, officers, or managing employees was, during the five years
preceding submission of a bid pursuant to this section, determined
by a court of competent jurisdiction to have submitted, or legally
admitted for purposes of a criminal plea to have submitted either
of the following:

(ia) Any claim to any public agency or official in violation of
the federal False Claims Act (31 U.S.C. Sec. 3729 et seq.).

(ib) Any claim to any public official in violation of the
California False Claims Act (Article 9 (commencing with Section
12650) of Chapter 6 of Part 2 of Division 3 of the Government
Code).

(II) Information provided pursuant to this subdivision shall
include the name and number of any case filed, the court in which
it was filed, and the date on which it was filed. The entity may
also provide further information regarding any such instance,
including any mitigating or extenuating circumstances that the
entity wishes the county to consider.

(B) 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.

(4) The county shall establish a procedure for final selection of
the design-build entity. Selection shall be based on either of the
following criteria:

(A) A competitive bidding process resulting in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.

(B) A county may use a design-build competition based upon
best value and other criteria set forth in paragraph (2). The
design-build competition shall include the following elements:

(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design,
and construction expertise, life cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.

(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous
to the least.

(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.

(iv) Notwithstanding any provision of this code, upon issuance
of a contract award, the county shall publicly announce its award,
identifying the contractor to whom the award is made, along with
a written decision supporting its contract award and stating the
basis of the award. The notice of award shall also include the
county’s second and third ranked design-build entities.

(v) For purposes of this paragraph, “skilled labor force
availability” shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the
California Apprenticeship Council, which has graduated
apprentices in each of the preceding five years. This graduation
requirement shall not apply to programs providing apprenticeship
training for any craft that has been deemed by the Department of
Labor and the Department of Industrial Relations to be an
apprenticeable craft in the five years prior to enactment of this act.

(vi) For purposes of this paragraph, a bidder’s “safety record”
shall be deemed “acceptable” if its experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and its 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
the bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.

(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omission insurance coverage sufficient to
cover all design and architectural services provided in the contract.
This section does not prohibit a general or engineering contractor
from being designated the lead entity on a design-build entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.

(2) Any payment or performance bond written for the purposes
of this section shall be written using a bond form developed by
the county.

(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of
paragraph (3) of subdivision (d) shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the county in the design-build package. All
subcontractors bidding on contracts pursuant to this section shall
be afforded the protections contained in Chapter 4 (commencing
with Section 4100) of Part 1. The design-build entity 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 section.

(g) Lists of subcontractors, bidders, and bid awards relating to
the project shall be submitted by the design-build entity to the
awarding body within 14 days of the award. These documents are
deemed to be public records and shall be available for public
inspection pursuant to this chapter and Article 1 (commencing
with Section 6250) of Chapter 3.5 of Division 7 of the Government
Code.

(h) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the county.

(i) The county may retain the services of a design professional
or construction project manager, or both, throughout the course of
the project in order to ensure compliance with this section.

(j) Contracts awarded pursuant to this section shall be valid until
the project is completed.

(k) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.

(l) (1) If the county elects to award a project pursuant to this
section, retention proceeds withheld by the county from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.

(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the county and the design-build entity. If the design-build
entity provides written notice to any subcontractor who is not a
member of the design-build 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
design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the county and the design-build entity from any
payment made by the design-build entity to the subcontractor.

(m) Each county that elects to proceed under this section and
uses the design-build method on a public works project shall submit
to the Legislative Analyst’s Office before September 1, 2013, a
report containing a description of each public works project
procured through the design-build process and completed after
November 1, 2009, and before August 1, 2013. The report shall
include, but shall not be limited to, all of the following information:

(1) The type of project.

(2) The gross square footage of the project.

(3) The design-build entity that was awarded the project.

(4) The estimated and actual length of time to complete the
project.

(5) The estimated and actual project costs.

(6) Whether the project was met or altered.

(7) The number and amount of project change orders.

(8) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.

(9) An assessment of the prequalification process and criteria.

(10) An assessment of the effect of retaining 5 percent retention
on the project.

(11) A description of the Labor Force Compliance Program and
an assessment of the project impact, where required.

(12) A description of the method used to award the contract. If
best value was the method, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(13) An assessment of the project impact of “skilled labor force
availability.”

(14) An assessment of the design-build dollar limits on county
projects. This assessment shall include projects where the county
wanted to use design-build and was precluded by the dollar
limitation. This assessment shall also include projects where the
best value method was not used due to dollar limitations.

(15) An assessment of the most appropriate uses for the
design-build approach.

(n) Any county that elects not to use the authority granted by
this section may submit a report to the Legislative Analyst’s Office
explaining why the county elected not to use the design-build
method.

(o) On or before January 1, 2014, the Legislative Analyst shall
report to the Legislature on the use of the design-build method by
counties pursuant to this section, including the information listed
in subdivision (m) and (p). The report may include
recommendations for modifying or extending this section.

(p) The Legislative Analyst shall complete a fact-based analysis
of the use of the design-build method by counties pursuant to this
section, utilizing the information provided pursuant to subdivision
(m) and any independent information provided by the public or
interested parties. The Legislative Analyst shall select a
representative sample of projects under this section and review
available public records and reports, media reports, and related
information in its analysis. The Legislative Analyst shall compile
the information required to be analyzed pursuant to this subdivision
into a report, which shall be provided to the Legislature. The report
shall include conclusions describing the actual cost of projects
procured pursuant to this section, whether the project schedule
was met or altered, and whether projects needed or used project
change orders.

(q) Except as provided in this section, this act shall not be
construed to affect the application of any other law.

(r) This section shall remain in effect only until July 1, 2014,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2014, deletes or extends that date.

end delete

SEC. 7.  

Section 20175.2 of the Public Contract Code is
repealed.

begin delete

20175.2.  

(a) (1) A city, with approval of the appropriate city
council, may utilize an alternative procedure for bidding on
building construction projects in the city in excess of one million
dollars ($1,000,000), except as provided in subdivision (p).

(2) Cities may award the project using either the lowest
responsible bidder or by best value.

(b) (1) It is the intent of the Legislature to enable cities to utilize
cost-effective options for building and modernizing public
facilities. The Legislature also recognizes the national trend,
including authorization in California, to allow public entities to
utilize design-build contracts as a project delivery method. It is
not the intent of the Legislature to authorize this procedure for
transportation facilities, including, but not limited to, roads and
bridges.

(2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles
and responsibilities of each participant in the design-build process.
The Legislature also finds that the cost-effective benefits to cities
are achieved by shifting the liability and risk for cost containment
and project completion to the design-build entity.

(3) It is the intent of the Legislature to provide an alternative
and optional procedure for bidding and building construction
projects for cities.

(4) The design-build approach may be used, but is not limited
to use, when it is anticipated that it will: reduce project cost,
expedite project completion, or provide design features not
achievable through the design-bid-build method.

(5) (A) For contracts for public works projects awarded prior
to the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, if a city council elects to proceed under this
section, the city council shall establish and enforce a labor
compliance program containing the requirements outlined in
Section 1771.5 of the Labor Code, or it shall contract with a third
party to operate a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code. This
requirement shall not apply to any project where the city or the
design-build entity has entered into a collective bargaining
agreement or agreements that bind all of the contractors performing
work on the projects.

(B) For contracts for public works projects awarded on or after
the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the city council shall reimburse the department
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. All moneys
collected pursuant to this paragraph 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 reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the city
council may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters 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.

(c) As used in this section:

(1) “Best value” means a value determined by objectives relative
to price, features, functions, and life-cycle costs.

(2) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services, as needed,
pursuant to a design-build contract.

(4) “Project” means the construction of a building and
improvements directly related to the construction of a building,
but does not include streets and highways, public rail transit, or
water resource facilities and infrastructure.

(d) Design-build projects shall progress in a four-step process,
as follows:

(1) (A) The city shall prepare a set of documents setting forth
the scope of the project. The documents may include, but are not
limited to, the size, type, and desired design character of the
buildings and site, performance specifications covering the quality
of materials, equipment, and workmanship, preliminary plans or
building layouts, or any other information deemed necessary to
describe adequately the city’s needs. The performance
specifications and any plans shall be prepared by a design
professional who is duly licensed and registered in California.

(B) Any architect or engineer retained by the city to assist in
the development of the project-specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.

(2) (A) Based on the documents prepared in paragraph (1), the
city shall prepare a request for proposals that invites interested
parties to submit competitive sealed proposals in the manner
prescribed by the city. The request for proposals shall include, but
is not limited to, the following elements:

(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the city to inform interested parties of the contracting
opportunity, to include the methodology that will be used by the
city to evaluate proposals, and specifically if the contract will be
awarded to the lowest responsible bidder.

(ii) Significant objective factors which the city reasonably
expects to consider in evaluating proposals, including cost or price
and all nonprice related factors.

(iii) The relative importance or weight assigned to each of the
factors identified in the request for proposals.

(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors, other than cost or price, when
combined are:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(C) If the city chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately, or incorporate
into the request for proposal, applicable rules and procedures to
be observed by the city to ensure that any discussions or
negotiations are conducted in good faith.

(3) (A) The city shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by
the city. In preparing the questionnaire, the city shall consult with
the construction industry, including representatives of the building
trades and surety industry. This questionnaire shall require
information including, but not limited to, all of the following:

(i) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members known at the time of bid submission who
will participate in the design-build contract, including, but not
limited to, mechanical subcontractors.

(ii) Evidence that the members of the design-build 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
design and construction of the project, as well as a financial
statement that assures the city that the design-build entity has the
capacity to complete the project.

(iii) The licenses, registration, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(v) 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 design-build entity,
and information concerning workers’ compensation experience
history and worker safety program.

(vi) Information concerning any debarment, disqualification,
or removal from a federal, state, or local government public works
project. Any instance where 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.

(vii) Any instance where the entity, its owners, officers, or
managing employees defaulted on a construction contract.

(viii) 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 Federal Insurance Contribution Act (FICA) withholding
requirements settled against any member of the design-build entity.

(ix) Information concerning the bankruptcy or receivership of
any member of the design-build entity, including information
concerning any work completed by a surety.

(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build 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.

(xi) In the case of a partnership or an 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 design-build
contract.

(xii) (I) Any instance in which the entity, or any of its members,
owners, officers, or managing employees was, during the five years
preceding submission of a bid pursuant to this section, determined
by a court of competent jurisdiction to have submitted, or legally
admitted for purposes of a criminal plea to have submitted either
of the following:

(ia) Any claim to any public agency or official in violation of
the federal False Claims Act (31 U.S.C. Sec. 3729 et seq.).

(ib) Any claim to any public official in violation of the
California False Claims Act (Article 9 (commencing with Section
12650) of Chapter 6 of Part 2 of Division 3 of the Government
Code).

(II) Information provided pursuant to this subdivision shall
include the name and number of any case filed, the court in which
it was filed, and the date on which it was filed. The entity may
also provide further information regarding any such instance,
including any mitigating or extenuating circumstances that the
entity wishes the city to consider.

(B) 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.

(4) The city shall establish a procedure for final selection of the
design-build entity. Selection shall be based on either of the
following criteria:

(A) A competitive bidding process resulting in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.

(B) The city may use a design-build competition based upon
best value and other criteria set forth in paragraph (2) of
subdivision (d). The design-build competition shall include the
following elements:

(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.

(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous
to the least.

(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.

(iv) Notwithstanding any provision of this code, upon issuance
of a contract award, the city shall publicly announce its award,
identifying the contractor to whom the award is made, along with
a written decision supporting its contract award and stating the
basis of the award. The notice of award shall also include the city’s
second and third ranked design-build entities.

(v) For purposes of this paragraph, “skilled labor force
availability” shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the
California Apprenticeship Council, which has graduated
apprentices in each of the preceding five years. This graduation
requirement shall not apply to programs providing apprenticeship
training for any craft that has been deemed by the Department of
Labor and the Department of Industrial Relations to be an
apprenticeable craft in the five years prior to enactment of this act.

(vi) For purposes of this paragraph, a bidder’s “safety record”
shall be deemed “acceptable” if its experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and its 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
the bidder is a party to an alternative dispute resolution system, as
provided for in Section 3201.5 of the Labor Code.

(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services and errors and omissions insurance coverage sufficient
to cover all design and architectural services provided in the
contract. This section does not prohibit a general or engineering
contractor from being designated the lead entity on a design-build
entity for the purposes of purchasing necessary bonding to cover
the activities of the design-build entity.

(2) Any payment or performance bond written for the purposes
of this section shall be written using a bond form developed by
the city.

(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of
paragraph (3) of subdivision (d) shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the city in the design-build package. All subcontractors
bidding on contracts pursuant to this section shall be afforded the
protections contained in Chapter 4 (commencing with Section
4100) of Part 1. The design-build entity 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 city.

(2) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure established
pursuant to this section.

(g) Lists of subcontractors, bidders, and bid awards relating to
the project shall be submitted by the design-build entity to the
awarding body within 14 days of the award. These documents are
deemed to be public records and shall be available for public
inspection pursuant to this chapter and Article 1 (commencing
with Section 6250) of Chapter 3.5 of Division 7 of the Government
Code.

(h) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the city.

(i) The city may retain the services of a design professional or
construction project manager, or both, throughout the course of
the project in order to ensure compliance with this section.

(j) Contracts awarded pursuant to this section shall be valid until
the project is completed.

(k) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.

(l) (1) If the city elects to award a project pursuant to this
section, retention proceeds withheld by the city from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.

(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the city and the design-build entity. If the design-build
entity provides written notice to any subcontractor who is not a
member of the design-build 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
design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the city and the design-build entity from any
payment made by the design-build entity to the subcontractor.

(m) Each city that elects to proceed under this section and uses
the design-build method on a public works project shall submit to
the Legislative Analyst’s Office before December 1, 2014, a report
containing a description of each public works project procured
through the design-build process that is completed after January
1, 2011, and before November 1, 2014. The report shall include,
but shall not be limited to, all of the following information:

(1) The type of project.

(2) The gross square footage of the project.

(3) The design-build entity that was awarded the project.

(4) The estimated and actual project costs.

(5) The estimated and actual length of time to complete the
project.

(6) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.

(7) An assessment of the prequalification process and criteria.

(8) An assessment of the effect of retaining 5 percent retention
on the project.

(9) A description of the Labor Force Compliance Program and
an assessment of the project impact, where required.

(10) A description of the method used to award the contract. If
the best value method was used, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(11) An assessment of the project impact of “skilled labor force
availability.”

(12) An assessment of the most appropriate uses for the
design-build approach.

(n) Any city that elects not to use the authority granted by this
section may submit a report to the Legislative Analyst’s Office
explaining why the city elected not to use the design-build method.

(o) On or before January 1, 2015, the Legislative Analyst’s
Office shall report to the Legislature on the use of the design-build
method by cities pursuant to this section, including the information
listed in subdivision (m). The report may include recommendations
for modifying or extending this section.

(p) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.

(q) Before January 1, 2011, the project limitation of one million
dollars ($1,000,000), as set forth in subdivision (a), shall not apply
to any city in the Counties of Solano and Yolo, or to the Cities of
Stanton and Victorville.

(r) This section shall remain in effect only until January 1, 2016,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2016, deletes or extends that date.

end delete

SEC. 8.  

Section 20193 of the Public Contract Code is repealed.

begin delete

20193.  

(a) (1) Notwithstanding any other law and subject to
the limitations of this article, a qualified entity, with approval of
its governing body, may utilize an alternative procedure on bidding
on projects in excess of two million five hundred thousand dollars
($2,500,000).

(2) Only 20 design-build projects shall be authorized under this
article.

(3) A qualified entity may award a project using either the lowest
responsible bidder or by best value.

(4) For purposes of this article, “qualified entity” means an
entity that meets both of the following:

(A) The entity is any of the following:

(i) A city.

(ii) A county.

(iii) A city and county.

(iv) A special district.

(B) The entity operates wastewater facilities, solid waste
management facilities, or water recycling facilities.

(b) (1) For contracts for public works projects awarded prior
to the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, if a qualified entity elects to proceed under this
section, the qualified entity shall establish and enforce a labor
compliance program containing the requirements outlined in
Section 1771.5 of the Labor Code, or it shall contract with a third
party to operate a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code. This
requirement shall not apply to projects where the qualified entity
or the design-build entity has entered into a collective bargaining
agreement or agreements that bind all of the contractors performing
work on the projects.

(2) For contracts for public works projects awarded on or after
the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the qualified entity shall reimburse the
department 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.
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.

(3) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the qualified
entity may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters 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.

(c) As used in this section:

(1) “Best value” means a value determined by objective criteria
related to price, features, functions, small business contracting
plans, past performance, and life-cycle costs.

(2) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.

(4) “Project” means the construction of regional and local
wastewater treatment facilities, regional and local solid waste
facilities, or regional and local water recycling facilities.

(d) Design-build projects shall progress in a four-step process,
as follows:

(1) (A) The qualified entity shall prepare a set of documents
setting forth the scope of the project. The documents may include,
but are not limited to, the size, type, and desired design character
of the project and site, performance specifications covering the
quality of materials, equipment, and workmanship, preliminary
plans or project layouts, or any other information deemed necessary
to describe adequately the qualified entity’s needs. The
performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.

(B) Any architect or engineer retained by the qualified entity
to assist in the development of the project specific documents shall
not be eligible to participate in the preparation of a bid with any
design-build entity for that project.

(2) (A) Based on the documents prepared in paragraph (1), the
qualified entity shall prepare a request for proposals that invites
interested parties to submit competitive sealed proposals in the
manner prescribed by the qualified entity. The request for proposals
shall include, but is not limited to, the following elements:

(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the qualified entity to inform interested parties of the
contracting opportunity, to include the methodology that will be
used by the qualified entity to evaluate proposals and specifically
if the contract will be awarded to the lowest responsible bidder.

(ii) Significant factors that the qualified entity reasonably
expects to consider in evaluating proposals, including cost or price
and all nonprice related factors.

(iii) The relative importance of weight assigned to each of the
factors identified in the request for proposals.

(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the qualified entity shall specifically
disclose whether all evaluation factors other than cost or price
when combined are:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(C) If the qualified entity chooses to reserve the right to hold
discussions or negotiations with responsive bidders, it shall so
specify in the request for proposal and shall publish separately or
incorporate into the request for proposal applicable rules and
procedures to be observed by the qualified entity to ensure that
any discussions or negotiations are conducted in good faith.

(3) (A) The qualified entity shall establish a procedure to
prequalify design-build entities using a standard questionnaire
developed by the qualified entity. In preparing the questionnaire,
the qualified entity shall consult with the construction industry,
including representatives of the building trades and surety industry.
This questionnaire shall require information including, but not
limited to, all of the following:

(i) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members known at the time of bid submission who
will participate in the design-build contract, including, but not
limited to, mechanical subcontractors.

(ii) Evidence that the members of the design-build 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
design and construction of the project, as well as a financial
statement that assures the special district that the design-build
entity has the capacity to complete the project.

(iii) The licenses, registration, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(v) 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 design-build entity,
and information concerning workers’ compensation experience
history and worker safety program.

(vi) Information concerning any debarment, disqualification,
or removal from a federal, state, or local government public works
project. Any instance where 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.

(vii) Any instance where the entity, its owner, officers, or
managing employees defaulted on a construction contract.

(viii) 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 Federal Insurance Contribution Act (FICA) withholding
requirements settled against any member of the design-build entity.

(ix) Information concerning the bankruptcy or receivership of
any member of the design-build entity, including information
concerning any work completed by a surety.

(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build 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.

(xi) 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 design-build
contract.

(B) 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.

(4) The qualified entity shall establish a procedure for final
selection of the design-build entity. Selection shall be based on
either of the following criteria:

(A) A competitive bidding process resulting in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.

(B) A qualified entity may use a design-build competition based
upon best value and other criteria set forth in paragraph (2) of
subdivision (d). The design-build competition shall include the
following elements:

(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight of
consideration given to all criteria factors; price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.

(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous
to the least.

(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.

(iv) Notwithstanding any provision of this code, upon issuance
of a contract award, the qualified entity shall publicly announce
its award, identifying the contractor to which the award is made,
along with a written decision supporting its contract award and
stating the basis of the award. The notice of award shall also
include the qualified entity’s second and third ranked design-build
entities.

(v) For purposes of this paragraph, “skilled labor force
availability” shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the
California Apprenticeship Council, which has graduated
apprentices in each of the preceding five years. This graduation
requirement shall not apply to programs providing apprenticeship
training for any craft that has been deemed by the Department of
Labor and the Department of Industrial Relations to be an
apprenticeable craft in the five years prior to enactment of this act.

(vi) For purposes of this paragraph, a bidder’s “safety record”
shall be deemed “acceptable” if their experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and their 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
the bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.

(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omissions insurance coverage sufficient
to cover all design and architectural services provided in the
contract. This section does not prohibit a general or engineering
contractor from being designated the lead entity on a design-build
entity for the purposes of purchasing necessary bonding to cover
the activities of the design-build entity.

(2) Any payment or performance bond written for the purposes
of this section shall be written using a bond form developed by
the qualified entity.

(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of
paragraph (3) of subdivision (d) shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the qualified entity in the design-build package. All
subcontractors bidding on contracts pursuant to this section shall
be afforded the protections contained in Chapter 4 (commencing
with Section 4100) of Part 1. The design-build entity 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 qualified
entity.

(2) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure established
pursuant to this section.

(g) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the qualified
entity.

(h) The qualified entity may retain the services of a design
professional or construction project manager, or both, throughout
the course of the project in order to ensure compliance with this
section.

(i) Contracts awarded pursuant to this section shall be valid until
the project is completed.

(j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.

(k) (1) If the qualified entity elects to award a project pursuant
to this section, retention proceeds withheld by the qualified entity
from the design-build entity shall not exceed 5 percent if a
performance and payment bond, issued by an admitted surety
insurer, is required in the solicitation of bids.

(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the qualified entity and the design-build entity. If the
design-build entity provides written notice to any subcontractor
who is not a member of the design-build 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 design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the qualified entity and the design-build entity
from any payment made by the design-build entity to the
subcontractor.

(l) Each qualified entity that elects to proceed under this section
and uses the design-build method on a public works project shall
do both of the following:

(1) Notify the Legislative Analyst’s Office upon initiation of
the project and upon completion of the project.

(2) Submit to the Legislative Analyst’s Office, upon completion
of the project, a report containing a description of the public works
project procured through the design-build process pursuant to this
section and completed after January 1, 2009. The report shall
include, but shall not be limited to, all of the following information:

(A) The type of project.

(B) The gross square footage of the project.

(C) The design-build entity that was awarded the project.

(D) The estimated and actual project costs.

(E) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.

(F) An assessment of the prequalification process and criteria.

(G) An assessment of the effect of retaining 5-percent retention
on the project.

(H) A description of the Labor Force Compliance Program and
an assessment of the project impact, where required.

(I) A description of the method used to award the contract. If
best value was the method, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(J) An assessment of the project impact of “skilled labor force
availability.”

(K) An assessment of the most appropriate uses for the
design-build approach.

(m) Any qualified entity that elects not to use the authority
granted by this section may submit a report to the Legislative
Analyst’s Office explaining why the qualified entity elected to not
use the design-build method.

(n) (1) In order to comply with paragraph (2) of subdivision
(a), the Office of Planning and Research is required to maintain
the list of entities that have applied and are eligible to be qualified
for this authority.

(2) Each entity that is interested in proceeding under the
authority in this section must apply to the Office of Planning and
Research.

(A) The application to proceed must be in writing.

(B) An entity must have complied with the California
Environmental Quality Act review process pursuant to Division
13 (commencing with Section 21000) of the Public Resources
Code prior to its application, and must include its approved notice
of determination or notice of completion in its application.

(3) The Office of Planning and Research must approve or deny
an application, in writing, within 30 days. The authority to deny
an application shall only be exercised if the conditions set forth in
either or both paragraph (2) of subdivision (a) and subparagraph
(B) of paragraph (2) of this subdivision have not been satisfied.

(4) An entity utilizing this section must, after it determines it
no longer is interested in using this authority, notify the Office of
Planning and Research in writing within 30 days of its
determination. Upon notification, the Office of Planning and
Research may contact any previous applicants, denied pursuant to
paragraph (2) of subdivision (a), to inform them of the availability
to proceed under this section.

(o) The Legislative Analyst shall report to the Legislature on
the use of the design-build method by qualified entities pursuant
to this section, including the information listed in subdivision (l).
The report may include recommendations for modifying or
extending this section, and shall be submitted on either of the
following dates, whichever occurs first:

(1) Within one year of the completion of the 20 projects, if the
projects are completed prior to January 1, 2019.

(2) No later than January 1, 2020.

end delete

SEC. 9.  

Section 20209 of the Public Contract Code is repealed.

begin delete

20209.  

Notwithstanding any other provision of law, any transit
district may negotiate the purchase from, or the sale to, any federal,
state, or local public agency of any real or personal property upon
terms and conditions agreed to by the district and the public agency.

end delete

SEC. 10.  

Section 20301.5 of the Public Contract Code is
repealed.

begin delete

20301.5.  

(a) Notwithstanding Section 20301, the district may
let a design-and-build contract for any project for a transit center
or station, transit park-and-ride lot, bus and light rail maintenance
facility, or administrative office building, or any combination of
those, upon approval by the board of directors. The district also
may let a design-and-build contract for the Fremont-South Bay
Commuter Rail Project contained in Santa Clara County’s 1996
Measure B Transportation Improvement Program, upon approval
by the board of directors.

(b) (1) If the board of directors elects to proceed under
subdivision (a), before entering into any contract that requires
advertising for bids for a project, the board shall cause to be
prepared estimates, and shall prepare documents, for the solicitation
of bids on a design-and-build basis.

(2) For the purposes of this section, “design and build” means
a method of procuring design and construction from a single
source. The selection of the single source shall occur before the
development of complete plans and specifications.

(c) The request for submission of bids shall include all of the
following:

(1) A clear, precise description of the services to be provided
and work to be performed.

(2) A description of the format that submittals shall follow and
the elements they shall contain, including the qualifications and
relevant experience of the design professional and the contractor,
and the criteria that shall be used in evaluating the submittal,
including the bid price.

(3) A requirement that bidders submit their proposals with the
construction bid price and all cost information in a separate sealed
envelope.

(4) The date on which the submittals are due, and the timetable
that will be used in reviewing and evaluating the submittals.

(d) All submittals received prior to the closing time stated in
the request for submittal shall be reviewed to determine those that
meet the format requirements and the standards specified in the
request for submittal.

(e) The contract shall be awarded to the lowest responsible
bidder meeting the standards of the request for submittal.

(f) For the purposes of this section, selections of design
professionals shall meet the standards set forth in Chapter 10
(commencing with Section 4525) of Division 5 of Title 1 of the
Government Code.

(g) This section shall apply only to a project that is under the
supervision of a licensed general building contractor, as defined
in Section 7057 of the Business and Professions Code.

end delete

SEC. 11.  

Article 22 (commencing with Section 20360) of
Chapter 1 of Part 3 of Division 2 of the Public Contract Code is
repealed.

SEC. 12.  

Section 20688.6 of the Public Contract Code is
repealed.

begin delete

20688.6.  

(a) (1) Notwithstanding any other law, an agency,
with approval of its duly constituted board in a public hearing,
may utilize an alternative procedure for bidding on projects in the
community in excess of one million dollars ($1,000,000) and may
award the project using either the lowest responsible bidder or by
best value.

(2) Only 10 design-build projects shall be authorized under this
section.

(b) (1) It is the intent of the Legislature to enable entities as
provided in Part 1 (commencing with Section 33000) of Division
24 of the Health and Safety Code to utilize design-build for those
infrastructure improvements authorized in Sections 33421, 33445,
and 33445.1 of the Health and Safety Code and subject to the
limitations on that authority described in Section 33421.1 of the
Health and Safety Code.

(2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles
and responsibilities of each participant in the design-build process.

(3) (A) For contracts for public works projects awarded prior
to the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, if the board elects to proceed under this section,
the board shall establish and enforce a labor compliance program
containing the requirements outlined in Section 1771.5 of the Labor
Code, or it shall contract with a third party to operate a labor
compliance program containing the requirements outlined in
Section 1771.5 of the Labor Code. This requirement shall not apply
to projects where the agency or the design-build entity has entered
into a collective bargaining agreement or agreements that bind all
of the contractors performing work on the projects.

(B) For contracts for public works projects awarded on or after
the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the board shall reimburse the department 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. 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 reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the board
may elect to continue operating an existing previously approved
labor compliance program to monitor and enforce prevailing wage
requirements on the project if it has either not contracted with a
third party to conduct its labor compliance program and requests
and receives approval from the department to continue its existing
program or it enters 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.

(c) As used in this section:

(1) “Best value” means a value determined by objective criteria
related to price, features, functions, and life-cycle costs.

(2) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.

(4) “Project” means those infrastructure improvements
authorized in Sections 33421, 33445, and 33445.1 of the Health
and Safety Code and subject to the limitations and conditions on
that authority described in Article 10 (commencing with Section
33420) and Article 11 (commencing with Section 33430) of
Chapter 4 of Part 1 of Division 24 of the Health and Safety Code.

(d) Design-build projects shall progress in a four-step process,
as follows:

(1) (A) The agency shall prepare a set of documents setting
forth the scope of the project. The documents may include, but are
not limited to, the size, type, and desired design character of the
public improvement, performance specifications covering the
quality of materials, equipment, and workmanship, preliminary
plans or building layouts, or any other information deemed
necessary to describe adequately the agency’s needs. The
performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.

(B) Any architect or engineer retained by the agency to assist
in the development of the project specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.

(2) (A) Based on the documents prepared as described in
paragraph (1), the agency shall prepare a request for proposals that
invites interested parties to submit competitive sealed proposals
in the manner prescribed by the agency. The request for proposals
shall include, but is not limited to, the following elements:

(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the agency to inform interested parties of the
contracting opportunity, to include the methodology that will be
used by the agency to evaluate proposals and specifically if the
contract will be awarded to the lowest responsible bidder.

(ii) Significant factors that the agency reasonably expects to
consider in evaluating proposals, including cost or price and all
nonprice-related factors.

(iii) The relative importance of the weight assigned to each of
the factors identified in the request for proposals.

(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors other than cost or price when
combined are:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(C) If the agency chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately or incorporate
into the request for proposal applicable rules and procedures to be
observed by the agency to ensure that any discussions or
negotiations are conducted in good faith.

(3) (A) The agency shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by
the agency. In preparing the questionnaire, the agency shall consult
with the construction industry, including representatives of the
building trades and surety industry. This questionnaire shall require
information including, but not limited to, all of the following:

(i) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members known at the time of bid submission who
will participate in the design-build contract, including, but not
limited to, mechanical subcontractors.

(ii) Evidence that the members of the design-build 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
design and construction of the project, as well as a financial
statement that assures the agency that the design-build entity has
the capacity to complete the project.

(iii) The licenses, registration, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(v) 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 design-build entity,
and information concerning workers’ compensation experience
history and worker safety program.

(vi) 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.

(vii) Any instance in which the entity, or its owners, officers,
or managing employees, defaulted on a construction contract.

(viii) Any violations of the Contractors’ State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), including alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding,
or of Federal Insurance Contributions Act (FICA) withholding
requirements settled against any member of the design-build entity.

(ix) Information concerning the bankruptcy or receivership of
any member of the design-build entity, including information
concerning any work completed by a surety.

(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build 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.

(xi) In the case of a partnership, joint venture, or an association
that is not a legal entity, a copy of the agreement creating the
partnership or association and specifying that all general partners,
joint venturers, or association members agree to be fully liable for
the performance under the design-build contract.

(B) 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.

(4) The agency shall establish a procedure for final selection of
the design-build entity. Selection shall be based on either of the
following criteria:

(A) A competitive bidding process resulting in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.

(B) An agency may use a design-build competition based upon
best value and other criteria set forth in paragraph (2). The
design-build competition shall include the following elements:

(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.

(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous
to the least.

(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.

(iv) Notwithstanding any provision of this code, upon issuance
of a contract award, the agency shall publicly announce its award,
identifying the contractor to whom the award is made, along with
a written decision supporting its contract award and stating the
basis of the award. The notice of award shall also include the
agency’s second- and third-ranked design-build entities.

(v) For purposes of this paragraph, skilled labor force availability
shall be determined by the existence of an agreement with a
registered apprenticeship program, approved by the California
Apprenticeship Council, which has graduated apprentices in each
of the preceding five years. This graduation requirement shall not
apply to programs providing apprenticeship training for any craft
that has been deemed by the Department of Labor and the
Department of Industrial Relations to be an apprenticeable craft
in the five years prior to enactment of this act.

(vi) For purposes of this paragraph, a bidder’s safety record
shall be deemed acceptable if its experience modification rate for
the most recent three-year period is an average of 1.00 or less, and
its 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
the bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.

(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omission insurance coverage sufficient to
cover all design and architectural services provided in the contract.
This section does not prohibit a general or engineering contractor
from being designated the lead entity on a design-build entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.

(2) Any payment or performance bond written for the purposes
of this section shall be written using a bond form developed by
the agency.

(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of
paragraph (3) of subdivision (d) shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the agency in the design-build package. All
subcontractors bidding on contracts pursuant to this section shall
be afforded the protections contained in Chapter 4 (commencing
with Section 4100) of Part 1. The design-build entity 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 agency.

(2) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure established
pursuant to this section.

(g) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the agency.

(h) The agency may retain the services of a design professional
or construction project manager, or both, throughout the course of
the project in order to ensure compliance with this section.

(i) Contracts awarded pursuant to this section shall be valid until
the project is completed.

(j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.

(k) (1) If the agency elects to award a project pursuant to this
section, retention proceeds withheld by the agency from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.

(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld shall not exceed the percentage specified in the contract
between the agency and the design-build entity. If the design-build
entity provides written notice to any subcontractor who is not a
member of the design-build 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
design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the agency and the design-build entity from any
payment made by the design-build entity to the subcontractor.

(l) Each agency that elects to proceed under this section and
uses the design-build method on a public works project shall submit
to the Legislative Analyst’s Office before December 1, 2014, a
report containing a description of each public works project
procured through the design-build process after January 1, 2010,
and before November 1, 2014. The report shall include, but shall
not be limited to, all of the following information:

(1) The type of project.

(2) The gross square footage of the project.

(3) The design-build entity that was awarded the project.

(4) Where appropriate, the estimated and actual length of time
to complete the project.

(5) The estimated and actual project costs.

(6) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.

(7) An assessment of the prequalification process and criteria.

(8) An assessment of the effect of retaining 5-percent retention
on the project.

(9) A description of the labor force compliance program and an
assessment of the project impact, where required.

(10) A description of the method used to award the contract. If
best value was the method, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(11) An assessment of the project impact of skilled labor force
availability.

(12) An assessment of the design-build dollar limits on agency
projects. This assessment shall include projects where the agency
wanted to use design-build and was precluded by the dollar
limitation. This assessment shall also include projects where the
best value method was not used due to dollar limitations.

(13) An assessment of the most appropriate uses for the
design-build approach.

(m) (1) In order to comply with paragraph (2) of subdivision
(a), the State Public Works Board is required to maintain the list
of agencies that have applied and are eligible to be qualified for
this authority.

(2) Each agency that is interested in proceeding under the
authority in this section must apply to the State Public Works
Board. The application to proceed shall be in writing and contain
such information that the State Public Works Board may require.

(3) The State Public Works Board shall approve or deny an
application, in writing, within 90 days of the submission of a
complete application. The authority to deny an application shall
only be exercised if the condition set forth in paragraph (2) of
subdivision (a) has been satisfied.

(4) An agency that has applied for this authorization shall, after
it determines it no longer is interested in using this authority, notify
the State Public Works Board in writing within 30 days of its
determination. Upon notification, the State Public Works Board
may contact any previous applicants, denied pursuant to paragraph
(2) of subdivision (a), to inform them of the availability to proceed
under this section.

(5) The State Public Works Board may authorize no more than
10 projects. The board shall not authorize or approve more than
two projects for any one eligible redevelopment agency that
submits a completed application.

(6) The State Public Works Board shall notify the Legislative
Analyst’s Office when 10 projects have been approved.

(n) On or before January 1, 2015, the Legislative Analyst shall
report to the Legislature on the use of the design-build method by
agencies pursuant to this section, including the information listed
in subdivision (l). The report may include recommendations for
modifying or extending this section.

(o) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.

(p) This section shall remain in effect only until January 1, 2016,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2016, deletes or extends that date.

end delete

SEC. 13.  

Chapter 4 (commencing with Section 22160) is added
to Part 3 of Division 2 of the Public Contract Code, to read:

 

Chapter  4. Local Agency Design-Build Projects

 

22160.  

(a) The Legislature finds and declares that the
design-build method of project delivery, using a best value
procurement methodology, has been authorized for various
agencies that have reported benefits from such projects including
reduced project costs, expedited project completion, and design
features that are not achievable through the traditional
design-bid-build method.

(b) It is the intent of the Legislature that the following occur:

(1) This article provides general authorization for local agencies
to use design-build for projects, excluding projects on the state
highway system.

(2) This article shall not be deemed to provide a preference for
the design-build method over other procurement methodologies.

22161.  

For purposes of this article, the following definitions
apply:

(a) “Best value” means a value determined by evaluation of
proposals with reference to specified criteria objectively applied,
including, but not limited to, price, quality of technical proposals,
qualifications of key personnel, and other criteria deemed
appropriate by the local agency. A best value determination may
entail selection of the lowest priced technically acceptable proposal
or selection of the best proposal for a fixed price established by
the procuring agency, or it may consist of a tradeoff between price
and other specified factors.

(b) “Construction subcontract” means each subcontract awarded
by the design-build entity to a subcontractor that will perform work
or labor or render service to the design-build entity in or about the
construction of the work or improvement, or a subcontractor
licensed by the State of California that, under subcontract to the
design-build entity, specially fabricates and installs a portion of
the work or improvement according to detailed drawings contained
in the plans and specifications produced by the design-build team.

(c) “Design-build” means a project delivery process in which
both the design and construction of a project are procured from a
single entity.

(d) “Design-build entity” means a corporation, limited liability
company, partnership, joint venture, or other legal entity that is
able to provide appropriately licensed contracting, architectural,
and engineering services as needed pursuant to a design-build
contract.

(e) “Design-build team” means the design-build entity itself
and the individuals and other entities identified by the design-build
entity as members of its team.

(f) “Local agency” means the following:

(1) A city, county, or city and county.

(2) A special district that operates wastewater facilities, solid
waste management facilities, or water recycling facilities.

(3) Any transit district, included transit district, municipal
operator, included municipal operator, or transit development
board, as defined in Section 99210 of the Public Utilities Code, or
a consolidated agency, as defined in Section 132353.1 of the Public
Utilities Code, or any joint powers authority formed to provide
transit service.

22162.  

(a) Notwithstanding any other law, a local agency,
with approval of its governing body, may procure design-build
contracts for public works projects in excess of one million dollars
($1,000,000), awarding the contract either the low bid or the best
value, provided that this article shall not apply to any projects on
the state highway system.

(b) The local agency shall develop guidelines for a standard
organizational conflict-of-interest policy, consistent with applicable
law, regarding the ability of a person or entity, that performs
services for the local agency relating to the solicitation of a
design-build project, to submit a proposal as a design-build entity,
or to join a design-build team. This conflict-of-interest policy shall
apply to each local agency entering into design-build contracts
authorized under this article.

22163.  

(a) For contracts for public works projects awarded on
or after the effective date of the regulations adopted by the
Department of Industrial Relations pursuant to subdivision (g) of
Section 1771.5 of the Labor Code, the local agency shall reimburse
the department 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.
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, subject to appropriation by
the Legislature, be used only for enforcement of prevailing wage
requirements on those projects.

(b) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the local
agency may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters 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.

22164.  

The procurement process for the design-build projects
shall progress as follows:

(a) The local agency shall prepare a set of documents setting
forth the scope and estimated price of the project. The documents
may include, but need not be limited to, the size, type, and desired
design character of the project, performance specifications covering
the quality of materials, equipment, workmanship, preliminary
plans or building layouts, or any other information deemed
necessary to describe adequately the local agency’s needs. The
performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.

(b) Based on the documents prepared under subdivision (a), the
local agency shall prepare and issue a request for qualifications in
order to prequalify or short-list the design-build entities whose
proposals shall be evaluated for final selection. The request for
qualifications shall include, but need not be limited to, the
following elements:

(1) Identification of the basic scope and needs of the project or
contract, the expected cost range, the methodology that will be
used by the local agency to evaluate proposals, the procedure for
final selection of the design-build entity, and any other information
deemed necessary by the local agency to inform interested parties
of the contracting opportunity.

(2) (A) Significant factors that the local agency reasonably
expects to consider in evaluating qualifications, including technical
design and construction expertise, skilled labor force availability,
and all other nonprice-related factors.

(B) For purposes of subparagraph (A), skilled labor force
availability shall be deemed satisfied by the existence of an
agreement with a registered apprenticeship program, approved by
the California Apprenticeship Council, that has graduated at least
one apprentice in each of the preceding five years. This graduation
requirement shall not apply to programs providing apprenticeship
training for any craft that was first deemed by the federal
Department of Labor and the Department of Industrial Relations
to be an apprenticeable craft within the five years prior to the
effective date of this article.

(3) A standard template request for statements of qualifications
prepared by the local agency. In preparing the standard template,
the local agency may consult with the construction industry, the
building trades and surety industry, and other local agencies
interested in using the authorization provided by this article. The
template shall require the following information:

(A) If the design-build entity is a privately held corporation,
limited liability company, partnership, or joint venture, a listing
of all of the shareholders, partners, or members known at the time
of statement of qualification submission who will perform work
on the project.

(B) Evidence that the members of the design-build team 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
design and construction of the project, and a financial statement
that ensures that the design-build entity has the capacity to
complete the project.

(C) The licenses, registration, and credentials required to design
and construct the project, including, but not limited to, information
on the revocation or suspension of any license, credential, or
registration.

(D) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(E) Information concerning workers’ compensation experience
history and a worker safety program.

(F) If the proposed design-build entity is a corporation, limited
liability company, partnership, joint venture, or other legal entity,
a copy of the organizational documents or agreement committing
to form the organization.

(G) An acceptable safety record. A proposer’s safety record
shall be deemed acceptable if its experience modification rate for
the most recent three-year period is an average of 1.00 or less, and
its average total recordable injury or 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
the proposer is a party to an alternative dispute resolution system
as provided for in Section 3201.5 of the Labor Code.

(4) (A) The information required under this subdivision shall
be certified under penalty of perjury by the design-build entity and
its general partners or joint venture members.

(B) Information required under this subdivision that is not
otherwise a public record under 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.

(c) Based on the documents prepared as described in subdivision
(a), the local agency shall prepare a request for proposals that
invites prequalified or short-listed entities to submit competitive
sealed proposals in the manner prescribed by the local agency.
The request for proposals shall include, but need not be limited
to, the following elements:

(1) Identification of the basic scope and needs of the project or
contract, the estimated cost of the project, the methodology that
will be used by the local agency to evaluate proposals, whether
the contract will be awarded on the basis of low bid or best value,
and any other information deemed necessary by the local agency
to inform interested parties of the contracting opportunity.

(2) Significant factors that the local agency reasonably expects
to consider in evaluating proposals, including, but not limited to,
cost or price and all nonprice-related factors.

(3) The relative importance or the weight assigned to each of
the factors identified in the request for proposals.

(4) Where a best value selection method is used, the local agency
may reserve the right to request proposal revisions and hold
discussions and negotiations with responsive proposers, in which
case the local agency shall so specify in the request for proposals
and shall publish separately or incorporate into the request for
proposals applicable procedures to be observed by the local agency
to ensure that any discussions or negotiations are conducted in
good faith.

(d) For those projects utilizing low bid as the final selection
method, the competitive bidding process shall result in lump-sum
bids by the prequalified or short-listed design-build entities, and
awards shall be made to the design-build entity that is the lowest
responsible bidder.

(e) For those projects utilizing best value as a selection method,
the design-build competition shall progress as follows:

(1) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposals.

(2) Pursuant to subdivision (c), the local agency may hold
discussions or negotiations with responsive proposers using the
process articulated in the local agency’s request for proposals.

(3) When the evaluation is complete, the responsive proposers
shall be ranked based on a determination of value provided,
provided that no more than three proposers are required to be
ranked.

(4) The award of the contract shall be made to the responsible
design-build entity whose proposal is determined by the local
agency to have offered the best value to the public.

(5) Notwithstanding any other provision of this code, upon
issuance of a contract award, the local agency shall publicly
announce its award, identifying the design-build entity to which
the award is made, along with a written decision supporting its
contract award and stating the basis of the award.

(6) The written decision supporting the local agency’s contract
award, described in paragraph (5), and the contract file shall
provide sufficient information to satisfy an external audit.

22165.  

(a) The design-build entity shall provide payment and
performance bonds for the project in the form and in the amount
required by the local agency, and issued by a California admitted
surety. The amount of the payment bond shall not be less than the
amount of the performance bond.

(b) The design-build contract shall require errors and omissions
insurance coverage for the design elements of the project.

(c) The local agency shall develop a standard form of payment
and performance bond for its design-build projects.

22166.  

(a) The local agency, in each design-build request for
proposals, may identify specific types of subcontractors that must
be included in the design-build entity statement of qualifications
and proposal. All construction subcontractors that are identified
in the proposal shall be afforded all the protections of Chapter 4
(commencing with Section 4100) of Part 1.

(b) Following award of the design-build contract, the
design-build entity shall proceed as follows in awarding
construction subcontracts with a value exceeding one-half of 1
percent of the contract price allocable to construction work:

(1) Provide public notice of availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the local agency,
including a fixed date and time on which qualifications statements,
bids, or proposals will be due.

(2) Establish reasonable qualification criteria and standards.

(3) Award the subcontract either on a best value basis or to the
lowest responsible bidder. The process may include prequalification
or short-listing. The foregoing process does not apply to
construction subcontractors listed in the original proposal.
Subcontractors awarded construction subcontracts under this
subdivision shall be afforded all the protections of Chapter 4
(commencing with Section 4100) of Part 1.

22167.  

(a) If the local agency elects to award a project pursuant
to this article, retention proceeds withheld by the local agency
from the design-build entity shall not exceed 5 percent, except as
otherwise specified in this section.

(b) (1) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the local agency and the design-build entity.

(2) This subdivision shall not apply if the design-build entity
provides written notice to any subcontractor that is not a member
of the design-build entity, prior to, or at the time the bid is
requested from the subcontractor, that a bond may be required and
the subcontractor subsequently is unable or refuses to furnish a
bond to the design-build entity, then the design-build entity may
withhold retention proceeds in excess of the percentage specified
in the contract between the local agency and the design-build entity
from any payment made by the design-build entity to the
subcontractor.

(3) Notwithstanding any other provision of this chapter, the
retention proceeds withheld from any payment by a local agency
from the original design-build entity, by the original design-build
entity contractor from any subcontractor, and by a subcontractor
from any subcontractor thereunder, may exceed 5 percent on
specific projects if the governing body of the public entity or
designee, including, but not limited to, a general manager or other
director of an appropriate department, has approved a finding
during a properly noticed and normally scheduled public hearing
and prior to the proposal due date that the project is substantially
complex and therefore requires a higher retention amount than 5
percent, and the local agency includes both this finding and the
actual retention amount in the procurement documents.

22168.  

Nothing in this article affects, expands, alters, or limits
any rights or remedies otherwise available at law.

SEC. 14.  

The Legislature finds and declares that Sections 5
and 13 of this act impose a limitation on the public’s right to access
to the meetings of public bodies or the writings of public officials
and agencies within the meaning of Section 3 of Article 1 of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:

In order to allow the Department of General Services, the
Department of Corrections and Rehabilitation, and local agencies
to fully accomplish its goals efficiently and economically, it is
necessary to enact legislation that generally limits access to, and
release of, records related to design-build.

SEC. 15.  

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.