Amended in Senate April 23, 2013

Amended in Senate April 1, 2013

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 of Division 2 of, to add Chapter 4 (commencing with Section 22160) to Part 3 of Division 2 of, to repeal Sections 20133, 20175.2, 20193, 20209, 20301.5, and 20688.6 of, and to repeal 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 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. 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identified agencies and repealing superseded sections.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Section 14661 of the Government Code is repealed.

SEC. 3.  

Section 14661.1 of the Government Code is repealed.

SEC. 4.  

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

32132.5.  

(a) Notwithstanding Section 32132 or any other
begin delete provision of end delete law, upon approval by the board of directors of the
Sonoma Valley Health Care District, the design-build procedure
described in Article 6 (commencing with Section 10186) of Chapter
1 of Part 2 of Division 2 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 Article 6
(commencing with Section 10186) of Chapter 1 of Part 2 of
Division 2 of the Public Contract Code to “county” and “governing
body” shall mean the Sonoma Valley Health Care District.

(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
begin delete 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. end delete begin insert objective criteria related to price,
features, functions, life cycle costs, experience, and past
performance. end insert 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. Members shall include the general
contractor and, if utilized in the design of the project, all electrical,
mechanical, and plumbing contractors.

(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) (1) 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.

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

(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.

begin delete

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.

end delete begin insert

begin insert 10194. end insert   

(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 if a performance
and payment bond, issued by an admitted surety insurer, is required
in the solicitation of bids.

(b)  In a contract between the design-build entity and a
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. 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, 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.

end insert

begin delete 10194. end delete
begin insert 10195. end insert   

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.

SEC. 7.  

Section 20175.2 of the Public Contract Code is
repealed.

SEC. 8.  

Section 20193 of the Public Contract Code is repealed.

SEC. 9.  

Section 20209 of the Public Contract Code is repealed.

SEC. 10.  

Section 20301.5 of the Public Contract Code is
repealed.

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.

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
begin delete 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. end delete begin insert objective criteria related to price,
features, functions, life cycle costs, experience, and past
performance. end insert 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. Members shall include the general
contractor and, if utilized in the design of the project, all electrical,
mechanical, and plumbing contractors.

(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.

begin insert

(g) (1) For a local agency defined in paragraph (1) of
subdivision (f), “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. For a local agency defined
in paragraph (1) of subdivision (f) that operates wastewater
facilities, solid waste management facilities, or water recycling
facilities, “project” also means the construction of regional and
local wastewater treatment facilities, regional and local solid
waste facilities, or regional and local water recycling facilities.

end insert begin insert

(2) For a local agency defined in paragraph (2) of subdivision
(f), “project” means the construction of regional and local
wastewater treatment facilities, regional and local solid waste
facilities, or regional and local water recycling facilities.

end insert begin insert

(3) For a local agency defined in paragraph (3) of subdivision
(f), “project” means a transit capital project.

end insert

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) (1) 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.

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

(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.

begin delete

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.

end delete begin insert

begin insert 22167. end insert   

(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 if
a performance and payment bond, issued by an admitted surety
insurer, is required in the solicitation of bids.

(b) In a contract between the design-build entity and a
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. 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, 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.

end insert

22168.  

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

SEC. 14.  

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.