Amended in Senate April 1, 2013

Senate BillNo. 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 2begin delete, and Articleend deletebegin insert of Division 2 of, to add Chapterend insert 4 (commencing with Section 22160) tobegin delete Chapter 2 ofend delete Part 3begin delete,end delete of Division 2 of,begin delete andend delete to repeal Sections 20133, 20175.2, 20193, 20209, 20301.5, and 20688.6 of, and to repealbegin delete Article 6.7 (commencing with Section 20209), andend delete Article 22 (commencing with Section 20360)begin delete,end deleteof Chapter 1 of Part 3 of Division 2 of, the Public Contract Code, relating to design-build.

LEGISLATIVE COUNSEL’S DIGEST

SB 785, as amended, 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.begin delete The bill would provide that specified information related to the procurement of design-build contracts is exempt from the California Public Records Act.end delete 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:

P2    1

SECTION 1.  

It is the intent of the Legislature to consolidate
2existing design-build statutes and eliminate inconsistencies in
3statutory language by adopting authority of general application to
4identified agencies and repealing superseded sections.

5

SEC. 2.  

Section 14661 of the Government Code is repealed.

6

SEC. 3.  

Section 14661.1 of the Government Code is repealed.

7

SEC. 4.  

Section 32132.5 of the Health and Safety Code is
8amended to read:

9

32132.5.  

(a) Notwithstanding Section 32132 or any other
10provision of law, upon approval by the board of directors of the
11Sonoma Valley Health Care District, the design-build procedure
12described in Article 6 (commencing with Section 10186) of Chapter
131 of Part 2 of Division 2 of the Public Contract Code may be used
14to assign contracts for the construction of a building or
15improvements directly related to construction of a hospital or health
16facility building at the Sonoma Valley Hospital.

17(b) For purposes of this section, all references in Article 6
18(commencing with Section 10186) of Chapter 1 of Part 2 of
19Division 2 of the Public Contract Code to “county” and “governing
20body” shall mean the Sonoma Valley Health Care District.

21(c) A hospital building project utilizing the design-build process
22authorized by subdivision (a) shall be reviewed and inspected in
23accordance with the standards and requirements of the Alfred E.
24Alquist Hospital Facilities Seismic Safety Act of 1983 (Chapter 1
25(commencing with Section 129675) of Part 7 of Division 107).

P3    1

SEC. 5.  

Article 6 (commencing with Section 10186) is added
2to Chapter 1 of Part 2 of Division 2 of the Public Contract Code,
3to read:

4 

5Article 6.  State Agency Design-Build Projects
6

 

7

10186.  

(a)  The Legislature finds and declares that the
8design-build method of project delivery, using a best value
9procurement methodology, has been authorized for various
10agencies that have reported benefits from such projects including
11reduced project costs, expedited project completion, and design
12features that are not achievable through the traditional
13design-bid-build method.

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

15(1) This article provides general authorization for certain state
16agencies to use design-build for projects, excluding projects on
17the state highway system.

18(2) This article shall not be deemed to provide a preference for
19the design-build method over other procurement methodologies.

20

10187.  

For purposes of this article, the following definitions
21apply:

22(a) “Best value” means a value determined by evaluation of
23proposals with reference to specified criteria objectively applied,
24including, but not limited to, price, quality of technical proposals,
25qualifications of key personnel, and other criteria deemed
26appropriate by the director. A best value determination may entail
27selection of the lowest priced technically acceptable proposals or
28selection of the best proposal for a fixed price established by the
29procuring agency, or it may consist of a tradeoff between price
30and other specified factors.

31(b) “Construction subcontract” means each subcontract awarded
32by the design-build entity to a subcontractor that will perform work
33or labor or render service to the design-build entity in or about the
34construction of the work or improvement, or a subcontractor
35licensed by the State of California that, under subcontract to the
36design-build entity, specially fabricates and installs a portion of
37the work or improvement according to detailed drawings contained
38in the plans and specifications produced by the design-build team.

39(c) “Department” means the Department of General Services
40and the Department of Corrections and Rehabilitation.

P4    1(d) “Design-build” means a project delivery process in which
2both the design and construction of a project are procured from a
3single entity.

4(e) “Design-build entity” means a corporation, limited liability
5company, partnership, joint venture, or other legal entity that is
6able to provide appropriately licensed contracting, architectural,
7and engineering services as needed pursuant to a design-build
8contract.

9(f) “Design-build team” means the design-build entity itself and
10the individuals and other entities identified by the design-build
11entity as members of its team.begin insert Members shall include the general
12contractor and, if utilized in the design of the project, all electrical,
13mechanical, and plumbing contractors.end insert

14(g) “Director” means, with respect to procurements undertaken
15by the Department of General Services, the Director of General
16Services or, with respect to procurements undertaken by the
17Department of Corrections and Rehabilitation, the secretary of that
18department.

19

10188.  

(a) Notwithstanding any other law, the director,
20following notification to the State Public Works Board, may
21procure design-build contracts for public works projects in excess
22of one million dollars ($1,000,000), awarding the contract using
23either the low bid or best value, provided that this article shall not
24apply to any projects on the state highway system.

25(b) The director shall develop guidelines for a standard
26organizational conflict-of-interest policy, consistent with applicable
27law, regarding the ability of a person or entity, that performs
28services for the department relating to the solicitation of a
29design-build project, to submit a proposal as a design-build entity,
30or to join a design-build team. This conflict-of-interest policy shall
31apply to each department entering into design-build contracts
32authorized under this article.

33

10189.  

(a) For contracts for public works projects awarded on
34or after the effective date of the regulations adopted by the
35Department of Industrial Relations pursuant to subdivision (g) of
36Section 1771.5 of the Labor Code, the department shall reimburse
37the Department of Industrial Relations for its reasonable and
38directly related costs of performing prevailing wage monitoring
39and enforcement on public works projects pursuant to rates
40established by the department as set forth in subdivision (h) of
P5    1Section 1771.5 of the Labor Code. All moneys collected pursuant
2to this subdivision shall be deposited in the State Public Works
3Enforcement Fund, created by Section 1771.3 of the Labor Code,
4and shall, subject to appropriation by the Legislature, be used only
5for enforcement of prevailing wage requirements on those projects.

6(b) In lieu of reimbursing the Department of Industrial Relations
7for its reasonable and directly related costs of performing
8monitoring and enforcement on public works projects, the
9department may elect to continue operating an existing previously
10approved labor compliance program to monitor and enforce
11prevailing wage requirements on the project if it has either not
12contracted with a third party to conduct its labor compliance
13program and requests and receives approval from the department
14to continue its existing program or it enters into a collective
15bargaining agreement that binds all of the contractors performing
16work on the project and that includes a mechanism for resolving
17disputes about the payment of wages.

18

10190.  

The director shall notify the State Public Works Board
19regarding the method to be used for selecting the design-build
20entity, prior to advertising the design-build project.

21

10191.  

The procurement process for the design-build projects
22shall progress as follows:

23(a) begin insert(1)end insertbegin insertend insert The director shall prepare a set of documents setting
24forth the scope and estimated price of the project. The documents
25may include, but need not be limited to, the size, type, and desired
26design character of the project, performance specifications covering
27the quality of materials, equipment, workmanship, preliminary
28plans or building layouts, or any other information deemed
29necessary to describe adequately the department’s needs. The
30performance specifications and any plans shall be prepared by a
31design professional who is duly licensed and registered in
32California.

begin insert

33(2) The documents shall not include a design-build-operate
34contract for any project.

end insert

35(b) Based on the documents prepared under subdivision (a), the
36director shall prepare and issue a request for qualifications in order
37to prequalify or short-list the design-build entities whose proposals
38shall be evaluated for final selection. The request for qualifications
39shall include, but need not be limited to, the following elements:

P6    1(1) Identification of the basic scope and needs of the project or
2contract, the expected cost range, the methodology that will be
3used by the department to evaluate proposals, the procedure for
4final selection of the design-build entity, and any other information
5deemed necessary by the director to inform interested parties of
6the contracting opportunity.

7(2) (A) Significant factors that the department reasonably
8expects to consider in evaluating qualifications, including technical
9design and construction expertise, skilled labor force availability,
10and all other nonprice-related factors.

11(B) For purposes of subparagraph (A), skilled labor force
12availability shall be deemed satisfied by the existence of an
13agreement with a registered apprenticeship program, approved by
14the California Apprenticeship Council, that has graduated at least
15one apprentice in each of the preceding five years. This graduation
16requirement shall not apply to programs providing apprenticeship
17training for any craft that was first deemed by the federal
18Department of Labor and the Department of Industrial Relations
19to be an apprenticeable craft within the five years prior to the
20effective date of this article.

21(3) A standard template request for statements of qualifications
22prepared by the department. In preparing the standard template,
23the department may consult with the construction industry, the
24building trades and surety industry, and other agencies interested
25in using the authorization provided by this article. The template
26shall require the following information:

27(A) If the design-build entity is a privately held corporation,
28limited liability company, partnership, or joint venture, a listing
29of all of the shareholders, partners, or members known at the time
30of statement of qualification submission who will perform work
31on the project.

32(B) Evidence that the members of the design-build team have
33completed, or demonstrated the experience, competency, capability,
34and capacity to complete projects of similar size, scope, or
35complexity, and that proposed key personnel have sufficient
36experience and training to competently manage and complete the
37design and construction of the project, and a financial statement
38that ensures that the design-build entity has the capacity to
39complete the project.

P7    1(C) The licenses, registration, and credentials required to design
2and construct the project, including, but not limited to, information
3on the revocation or suspension of any license, credential, or
4registration.

5(D) Evidence that establishes that the design-build entity has
6the capacity to obtain all required payment and performance
7bonding, liability insurance, and errors and omissions insurance.

8(E) Information concerning workers’ compensation experience
9history and a worker safety program.

10(F) If the proposed design-build entity is a corporation, limited
11liability company, partnership, joint venture, or other legal entity,
12a copy of the organizational documents or agreement committing
13to form the organization.

14(G) An acceptable safety record. A proposer’s safety record
15shall be deemed acceptable if its experience modification rate for
16the most recent three-year period is an average of 1.00 or less, and
17its average total recordable injury or illness rate and average lost
18work rate for the most recent three-year period does not exceed
19the applicable statistical standards for its business category or if
20the proposer is a party to an alternative dispute resolution system
21as provided for in Section 3201.5 of the Labor Code.

22(4) (A) The information required under this subdivision shall
23be certified under penalty of perjury by the design-build entity and
24its general partners or joint venture members.

25(B) Information required under this subdivision that is not
26otherwise a public record under the California Public Records Act
27(Chapter 3.5 (commencing with Section 6250) of Division 7 of
28Title 1 of the Government Code) shall not be open to public
29inspection.

30(c) Based on the documents prepared as described in subdivision
31(a), the director shall prepare a request for proposals that invites
32prequalified or short-listed entities to submit competitive sealed
33proposals in the manner prescribed by the department. The request
34for proposals shall include, but need not be limited to, the following
35elements:

36(1) Identification of the basic scope and needs of the project or
37contract, the estimated cost of the project, the methodology that
38will be used by the department to evaluate proposals, whether the
39contract will be awarded on the basis of low bid or best value, and
P8    1any other information deemed necessary by the department to
2inform interested parties of the contracting opportunity.

3(2) Significant factors that the department reasonably expects
4to consider in evaluating proposals, including, but not limited to,
5cost or price and all nonprice-related factors.

6(3) The relative importance or the weight assigned to each of
7the factors identified in the request for proposals.

8(4) Where a best value selection method is used, the department
9may reserve the right to request proposal revisions and hold
10discussions and negotiations with responsive proposers, in which
11case the department shall so specify in the request for proposals
12and shall publish separately or incorporate into the request for
13proposals applicable procedures to be observed by the department
14to ensure that any discussions or negotiations are conducted in
15good faith.

16(d) For those projects utilizing low bid as the final selection
17method, the competitive bidding process shall result in lump-sum
18bids by the prequalified or short-listed design-build entities, and
19awards shall be made to the design-build entity that is the lowest
20responsible bidder.

21(e) For those projects utilizing best value as a selection method,
22the design-build competition shall progress as follows:

23(1) Competitive proposals shall be evaluated by using only the
24criteria and selection procedures specifically identified in the
25request for proposals.

26(2) Pursuant to subdivision (c), the department may hold
27discussions or negotiations with responsive proposers using the
28process articulated in the department’s request for proposals.

29(3) When the evaluation is complete, the responsive proposers
30shall be ranked based on a determination of value provided,
31provided that no more than three proposers are required to be
32ranked.

33(4) The award of the contract shall be made to the responsible
34design-build entity whose proposal is determined by the director
35to have offered the best value to the public.

36(5) Notwithstanding any other provision of this code, upon
37issuance of a contract award, the director shall publicly announce
38its award, identifying the design-build entity to which the award
39is made, along with a written decision supporting its contract award
40and stating the basis of the award.

P9    1(6) The written decision supporting the director’s contract award,
2described in paragraph (5), and the contract file shall provide
3sufficient information to satisfy an external audit.

4

10192.  

(a) The design-build entity shall provide payment and
5performance bonds for the project in the form and in the amount
6required by the director, and issued by a California admitted surety.
7The amount of the payment bond shall not be less than the amount
8of the performance bond.

9(b) The design-build contract shall require errors and omissions
10insurance coverage for the design elements of the project.

11(c) The department shall develop a standard form of payment
12and performance bond for its design-build projects.

13

10193.  

(a) The department, in each design-build request for
14proposals, may identify specific types of subcontractors that must
15be included in the design-build entity statement of qualifications
16and proposal. All construction subcontractors that are identified
17in the proposal shall be afforded all the protections of Chapter 4
18(commencing with Section 4100) of Part 1.

19(b) Following award of the design-build contract, the
20design-build entity shall proceed as follows in awarding
21construction subcontracts with a value exceeding one-half of 1
22percent of the contract price allocable to construction work:

23(1) Provide public notice of availability of work to be
24subcontracted in accordance with the publication requirements
25applicable to the competitive bidding process of the department,
26including a fixed date and time on which qualifications statements,
27bids, or proposals will be due.

28(2) Establish reasonable qualification criteria and standards.

29(3) Award the subcontract either on a best value basis or to the
30lowest responsible bidder. The process may include prequalification
31or short-listing. The foregoing process does not apply to
32construction subcontractors listed in the original proposal.
33Subcontractors awarded construction subcontracts under this
34subdivision shall be afforded all the protections of Chapter 4
35(commencing with Section 4100) of Part 1.

36

10194.  

(a) If the department elects to award a project pursuant
37to this article, retention proceeds withheld by the department from
38the design-build entity shall not exceed 5 percent, except as
39otherwise specified in this section.

P10   1(b) (1) In a contract between the design-build entity and the
2subcontractor, and in a contract between a subcontractor and any
3subcontractor thereunder, the percentage of the retention proceeds
4withheld may not exceed the percentage specified in the contract
5between the department and the design-build entity.

6(2) This subdivision shall not apply if the design-build entity
7provides written notice to any subcontractor that is not a member
8of the design-build entity, prior to, or at the time the bid is
9requested from the subcontractor, that a bond may be required and
10the subcontractor subsequently is unable or refuses to furnish a
11bond to the design-build entity, then the design-build entity may
12withhold retention proceeds in excess of the percentage specified
13in the contract between the department and the design-build entity
14from any payment made by the design-build entity to the
15subcontractor.

16(3) Notwithstanding any other provision of this section, the
17retention proceeds withheld from any payment by a department
18from the original design-build entity, by the original design-build
19entity contractor from any subcontractor, and by a subcontractor
20from any subcontractor thereunder, may exceed 5 percent on
21specific projects where the director has made a finding prior to the
22proposal due date that the project is substantially complex and
23therefore requires a higher retention amount than 5 percent, and
24the department includes both this finding and the actual retention
25amount in the procurement documents.

26

10194.  

Nothing in this article affects, expands, alters, or limits
27any rights or remedies otherwise available at law.

28

SEC. 6.  

Section 20133 of the Public Contract Code is repealed.

29

SEC. 7.  

Section 20175.2 of the Public Contract Code is
30repealed.

31

SEC. 8.  

Section 20193 of the Public Contract Code is repealed.

32

SEC. 9.  

Section 20209 of the Public Contract Code is repealed.

33

SEC. 10.  

Section 20301.5 of the Public Contract Code is
34repealed.

35

SEC. 11.  

Article 22 (commencing with Section 20360) of
36Chapter 1 of Part 3 of Division 2 of the Public Contract Code is
37repealed.

38

SEC. 12.  

Section 20688.6 of the Public Contract Code is
39repealed.

P11   1

SEC. 13.  

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

3 

4Chapter  4. Local Agency Design-Build Projects
5

 

6

22160.  

(a) The Legislature finds and declares that the
7design-build method of project delivery, using a best value
8procurement methodology, has been authorized for various
9agencies that have reported benefits from such projects including
10reduced project costs, expedited project completion, and design
11features that are not achievable through the traditional
12design-bid-build method.

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

14(1) This article provides general authorization for local agencies
15to use design-build for projects, excluding projects on the state
16highway system.

17(2) This article shall not be deemed to provide a preference for
18the design-build method over other procurement methodologies.

19

22161.  

For purposes of this article, the following definitions
20apply:

21(a) “Best value” means a value determined by evaluation of
22proposals with reference to specified criteria objectively applied,
23including, but not limited to, price, quality of technical proposals,
24qualifications of key personnel, and other criteria deemed
25appropriate by the local agency. A best value determination may
26entail selection of the lowest priced technically acceptable proposal
27or selection of the best proposal for a fixed price established by
28the procuring agency, or it may consist of a tradeoff between price
29and other specified factors.

30(b) “Construction subcontract” means each subcontract awarded
31by the design-build entity to a subcontractor that will perform work
32or labor or render service to the design-build entity in or about the
33construction of the work or improvement, or a subcontractor
34licensed by the State of California that, under subcontract to the
35design-build entity, specially fabricates and installs a portion of
36the work or improvement according to detailed drawings contained
37in the plans and specifications produced by the design-build team.

38(c) “Design-build” means a project delivery process in which
39both the design and construction of a project are procured from a
40single entity.

P12   1(d) “Design-build entity” means a corporation, limited liability
2company, partnership, joint venture, or other legal entity that is
3able to provide appropriately licensed contracting, architectural,
4and engineering services as needed pursuant to a design-build
5contract.

6(e) “Design-build team” means the design-build entity itself
7and the individuals and other entities identified by the design-build
8entity as members of its team.begin insert Members shall include the general
9contractor and, if utilized in the design of the project, all electrical,
10mechanical, and plumbing contractors.end insert

11(f) “Local agency” means the following:

12(1) A city, county, or city and county.

13(2) A special district that operates wastewater facilities, solid
14waste management facilities, or water recycling facilities.

15(3) Any transit district, included transit district, municipal
16operator, included municipal operator, or transit development
17board, as defined in Section 99210 of the Public Utilities Code, or
18a consolidated agency, as defined in Section 132353.1 of the Public
19Utilities Code, or any joint powers authority formed to provide
20transit service.

21

22162.  

(a) Notwithstanding any other law, a local agency,
22with approval of its governing body, may procure design-build
23contracts for public works projects in excess of one million dollars
24($1,000,000), awarding the contract either the low bid or the best
25value, provided that this article shall not apply to any projects on
26the state highway system.

27(b) The local agency shall develop guidelines for a standard
28organizational conflict-of-interest policy, consistent with applicable
29law, regarding the ability of a person or entity, that performs
30services for the local agency relating to the solicitation of a
31design-build project, to submit a proposal as a design-build entity,
32or to join a design-build team. This conflict-of-interest policy shall
33apply to each local agency entering into design-build contracts
34authorized under this article.

35

22163.  

(a) For contracts for public works projects awarded on
36or after the effective date of the regulations adopted by the
37Department of Industrial Relations pursuant to subdivision (g) of
38Section 1771.5 of the Labor Code, the local agency shall reimburse
39the department for its reasonable and directly related costs of
40performing prevailing wage monitoring and enforcement on public
P13   1works projects pursuant to rates established by the department as
2set forth in subdivision (h) of Section 1771.5 of the Labor Code.
3All moneys collected pursuant to this subdivision shall be deposited
4in the State Public Works Enforcement Fund, created by Section
51771.3 of the Labor Code, and shall, subject to appropriation by
6the Legislature, be used only for enforcement of prevailing wage
7requirements on those projects.

8(b) In lieu of reimbursing the Department of Industrial Relations
9for its reasonable and directly related costs of performing
10monitoring and enforcement on public works projects, the local
11agency may elect to continue operating an existing previously
12approved labor compliance program to monitor and enforce
13prevailing wage requirements on the project if it has either not
14contracted with a third party to conduct its labor compliance
15program and requests and receives approval from the department
16to continue its existing program or it enters into a collective
17bargaining agreement that binds all of the contractors performing
18work on the project and that includes a mechanism for resolving
19disputes about the payment of wages.

20

22164.  

The procurement process for the design-build projects
21shall progress as follows:

22(a) begin insert(1)end insertbegin insertend insert The local agency shall prepare a set of documents setting
23forth the scope and estimated price of the project. The documents
24may include, but need not be limited to, the size, type, and desired
25design character of the project, performance specifications covering
26the quality of materials, equipment, workmanship, preliminary
27plans or building layouts, or any other information deemed
28necessary to describe adequately the local agency’s needs. The
29performance specifications and any plans shall be prepared by a
30design professional who is duly licensed and registered in
31California.

begin insert

32(2) The documents shall not include a design-build-operate
33contract for any project.

end insert

34(b) Based on the documents prepared under subdivision (a), the
35local agency shall prepare and issue a request for qualifications in
36order to prequalify or short-list the design-build entities whose
37proposals shall be evaluated for final selection. The request for
38qualifications shall include, but need not be limited to, the
39following elements:

P14   1(1) Identification of the basic scope and needs of the project or
2contract, the expected cost range, the methodology that will be
3used by the local agency to evaluate proposals, the procedure for
4final selection of the design-build entity, and any other information
5deemed necessary by the local agency to inform interested parties
6of the contracting opportunity.

7(2) (A) Significant factors that the local agency reasonably
8expects to consider in evaluating qualifications, including technical
9design and construction expertise, skilled labor force availability,
10and all other nonprice-related factors.

11(B) For purposes of subparagraph (A), skilled labor force
12availability shall be deemed satisfied by the existence of an
13agreement with a registered apprenticeship program, approved by
14the California Apprenticeship Council, that has graduated at least
15one apprentice in each of the preceding five years. This graduation
16requirement shall not apply to programs providing apprenticeship
17training for any craft that was first deemed by the federal
18Department of Labor and the Department of Industrial Relations
19to be an apprenticeable craft within the five years prior to the
20effective date of this article.

21(3) A standard template request for statements of qualifications
22prepared by the local agency. In preparing the standard template,
23the local agency may consult with the construction industry, the
24building trades and surety industry, and other local agencies
25 interested in using the authorization provided by this article. The
26template shall require the following information:

27(A) If the design-build entity is a privately held corporation,
28limited liability company, partnership, or joint venture, a listing
29of all of the shareholders, partners, or members known at the time
30of statement of qualification submission who will perform work
31on the project.

32(B) Evidence that the members of the design-build team have
33completed, or demonstrated the experience, competency, capability,
34and capacity to complete projects of similar size, scope, or
35complexity, and that proposed key personnel have sufficient
36experience and training to competently manage and complete the
37design and construction of the project, and a financial statement
38that ensures that the design-build entity has the capacity to
39complete the project.

P15   1(C) The licenses, registration, and credentials required to design
2and construct the project, including, but not limited to, information
3on the revocation or suspension of any license, credential, or
4registration.

5(D) Evidence that establishes that the design-build entity has
6the capacity to obtain all required payment and performance
7bonding, liability insurance, and errors and omissions insurance.

8(E) Information concerning workers’ compensation experience
9history and a worker safety program.

10(F) If the proposed design-build entity is a corporation, limited
11liability company, partnership, joint venture, or other legal entity,
12a copy of the organizational documents or agreement committing
13to form the organization.

14(G) An acceptable safety record. A proposer’s safety record
15shall be deemed acceptable if its experience modification rate for
16the most recent three-year period is an average of 1.00 or less, and
17its average total recordable injury or illness rate and average lost
18work rate for the most recent three-year period does not exceed
19the applicable statistical standards for its business category or if
20the proposer is a party to an alternative dispute resolution system
21as provided for in Section 3201.5 of the Labor Code.

22(4) (A) The information required under this subdivision shall
23be certified under penalty of perjury by the design-build entity and
24its general partners or joint venture members.

25(B) Information required under this subdivision that is not
26otherwise a public record under the California Public Records Act
27(Chapter 3.5 (commencing with Section 6250) of Division 7 of
28Title 1 of the Government Code) shall not be open to public
29inspection.

30(c) Based on the documents prepared as described in subdivision
31(a), the local agency shall prepare a request for proposals that
32invites prequalified or short-listed entities to submit competitive
33sealed proposals in the manner prescribed by the local agency.
34The request for proposals shall include, but need not be limited
35to, the following elements:

36(1) Identification of the basic scope and needs of the project or
37contract, the estimated cost of the project, the methodology that
38will be used by the local agency to evaluate proposals, whether
39the contract will be awarded on the basis of low bid or best value,
P16   1and any other information deemed necessary by the local agency
2to inform interested parties of the contracting opportunity.

3(2) Significant factors that the local agency reasonably expects
4to consider in evaluating proposals, including, but not limited to,
5cost or price and all nonprice-related factors.

6(3) The relative importance or the weight assigned to each of
7the factors identified in the request for proposals.

8(4) Where a best value selection method is used, the local agency
9may reserve the right to request proposal revisions and hold
10discussions and negotiations with responsive proposers, in which
11case the local agency shall so specify in the request for proposals
12and shall publish separately or incorporate into the request for
13proposals applicable procedures to be observed by the local agency
14to ensure that any discussions or negotiations are conducted in
15good faith.

16(d) For those projects utilizing low bid as the final selection
17method, the competitive bidding process shall result in lump-sum
18bids by the prequalified or short-listed design-build entities, and
19awards shall be made to the design-build entity that is the lowest
20responsible bidder.

21(e) For those projects utilizing best value as a selection method,
22the design-build competition shall progress as follows:

23(1) Competitive proposals shall be evaluated by using only the
24criteria and selection procedures specifically identified in the
25request for proposals.

26(2) Pursuant to subdivision (c), the local agency may hold
27discussions or negotiations with responsive proposers using the
28process articulated in the local agency’s request for proposals.

29(3) When the evaluation is complete, the responsive proposers
30shall be ranked based on a determination of value provided,
31provided that no more than three proposers are required to be
32ranked.

33(4) The award of the contract shall be made to the responsible
34design-build entity whose proposal is determined by the local
35agency to have offered the best value to the public.

36(5) Notwithstanding any other provision of this code, upon
37issuance of a contract award, the local agency shall publicly
38announce its award, identifying the design-build entity to which
39the award is made, along with a written decision supporting its
40contract award and stating the basis of the award.

P17   1(6) The written decision supporting the local agency’s contract
2award, described in paragraph (5), and the contract file shall
3provide sufficient information to satisfy an external audit.

4

22165.  

(a) The design-build entity shall provide payment and
5performance bonds for the project in the form and in the amount
6required by the local agency, and issued by a California admitted
7surety. The amount of the payment bond shall not be less than the
8amount of the performance bond.

9(b) The design-build contract shall require errors and omissions
10insurance coverage for the design elements of the project.

11(c) The local agency shall develop a standard form of payment
12and performance bond for its design-build projects.

13

22166.  

(a) The local agency, in each design-build request for
14proposals, may identify specific types of subcontractors that must
15be included in the design-build entity statement of qualifications
16and proposal. All construction subcontractors that are identified
17in the proposal shall be afforded all the protections of Chapter 4
18(commencing with Section 4100) of Part 1.

19(b) Following award of the design-build contract, the
20design-build entity shall proceed as follows in awarding
21construction subcontracts with a value exceeding one-half of 1
22percent of the contract price allocable to construction work:

23(1) Provide public notice of availability of work to be
24subcontracted in accordance with the publication requirements
25applicable to the competitive bidding process of the local agency,
26including a fixed date and time on which qualifications statements,
27bids, or proposals will be due.

28(2) Establish reasonable qualification criteria and standards.

29(3) Award the subcontract either on a best value basis or to the
30lowest responsible bidder. The process may include prequalification
31or short-listing. The foregoing process does not apply to
32construction subcontractors listed in the original proposal.
33Subcontractors awarded construction subcontracts under this
34subdivision shall be afforded all the protections of Chapter 4
35(commencing with Section 4100) of Part 1.

36

22167.  

(a) If the local agency elects to award a project pursuant
37to this article, retention proceeds withheld by the local agency
38from the design-build entity shall not exceed 5 percent, except as
39otherwise specified in this section.

P18   1(b) (1) In a contract between the design-build entity and the
2subcontractor, and in a contract between a subcontractor and any
3subcontractor thereunder, the percentage of the retention proceeds
4withheld may not exceed the percentage specified in the contract
5between the local agency and the design-build entity.

6(2) This subdivision shall not apply if the design-build entity
7provides written notice to any subcontractor that is not a member
8of the design-build entity, prior to, or at the time the bid is
9requested from the subcontractor, that a bond may be required and
10the subcontractor subsequently is unable or refuses to furnish a
11bond to the design-build entity, then the design-build entity may
12withhold retention proceeds in excess of the percentage specified
13in the contract between the local agency and the design-build entity
14from any payment made by the design-build entity to the
15subcontractor.

16(3) Notwithstanding any other provision of this chapter, the
17retention proceeds withheld from any payment by a local agency
18from the original design-build entity, by the original design-build
19entity contractor from any subcontractor, and by a subcontractor
20from any subcontractor thereunder, may exceed 5 percent on
21specific projects if the governing body of the public entity or
22designee, including, but not limited to, a general manager or other
23director of an appropriate department, has approved a finding
24during a properly noticed and normally scheduled public hearing
25and prior to the proposal due date that the project is substantially
26complex and therefore requires a higher retention amount than 5
27percent, and the local agency includes both this finding and the
28actual retention amount in the procurement documents.

29

22168.  

Nothing in this article affects, expands, alters, or limits
30any rights or remedies otherwise available at law.

begin delete
31

SEC. 14.  

The Legislature finds and declares that Sections 5
32and 13 of this act impose a limitation on the public’s right to access
33to the meetings of public bodies or the writings of public officials
34and agencies within the meaning of Section 3 of Article 1 of the
35California Constitution. Pursuant to that constitutional provision,
36the Legislature makes the following findings to demonstrate the
37interest protected by this limitation and the need for protecting
38that interest:

39In order to allow the Department of General Services, the
40Department of Corrections and Rehabilitation, and local agencies
P19   1to fully accomplish its goals efficiently and economically, it is
2necessary to enact legislation that generally limits access to, and
3release of, records related to design-build.

end delete
4

begin deleteSEC. 15.end delete
5begin insertSEC. 14.end insert  

No reimbursement is required by this act pursuant to
6Section 6 of Article XIII B of the California Constitution because
7the only costs that may be incurred by a local agency or school
8district will be incurred because this act creates a new crime or
9infraction, eliminates a crime or infraction, or changes the penalty
10for a crime or infraction, within the meaning of Section 17556 of
11the Government Code, or changes the definition of a crime within
12the meaning of Section 6 of Article XIII B of the California
13Constitution.



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