BILL NUMBER: SB 785 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 4, 2014
AMENDED IN ASSEMBLY JUNE 17, 2014
AMENDED IN SENATE JANUARY 14, 2014
AMENDED IN SENATE MAY 2, 2013
AMENDED IN SENATE APRIL 23, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senator Wolk
(Principal coauthor: Assembly Member Levine)
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)
10187) 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, 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 authorize the Marin
Healthcare District to use the design-build process when contracting
for the construction of a building and improvements directly related
to a hospital or health facility building at the Marin General
Hospital. 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.
This bill would make legislative findings and declarations as to
the necessity of a special statute for the Marin Healthcare District.
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 law, upon
approval by the board of directors of the Sonoma Valley Health Care
District or the Marin Healthcare District, as applicable, the
design-build procedure described in Chapter 4 (commencing with
Section 22160) of Part 3 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 or the Marin
General Hospital.
(b) For purposes of this section, all references in Chapter 4
(commencing with Section 22160) of Part 3 of Division 2 of the Public
Contract Code to "local agency" shall mean the Sonoma Valley Health
Care District and the Marin Healthcare 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)
10187) 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. 10187. (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. 10187.5. For purposes of
this article, the following definitions apply:
(a) "Best value" means a value determined by evaluation of
objective criteria related to price, features, functions, life-cycle
costs, experience, and past performance. 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.
involve the selection of the lowest cost proposal meeting the
interests of the department and meeting the objectives of the
project, selection of the best proposal for a stipulated sum
established by the procuring agency, or 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.
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. The documents, however, may include
operations during a training or transition period but shall not
include long-term operations 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,
expertise, 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) A design-build entity shall not be prequalified or shortlisted
unless the entity provides an enforceable commitment to the director
that the entity and its subcontractors at every tier will use a
skilled and trained workforce to perform all work on the project or
contract that falls within an apprenticeable occupation in the
building and construction trades.
(1) For purposes of this subdivision:
(A) "Apprenticeable occupation" means an occupation for which the
chief had approved an apprenticeship program pursuant to Section 3075
of the Labor Code prior to January 1, 2014.
(B) "Skilled and trained workforce" means a workforce that meets
all of the following conditions:
(i) All the workers are either skilled journeypersons or
apprentices registered in an apprenticeship program approved by the
Chief of the Division of Apprenticeship Standards.
(ii) (I) As of January 1, 2016, at least 20 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(II) As of January 1, 2017, at least 30 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(III) As of January 1, 2018, at least 40 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(IV) As of January 1, 2019, at least 50 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(V) As of January 1, 2020, at least 60 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(iii) For an apprenticeable occupation in which no apprenticeship
program had been approved by the chief prior to January 1, 1995, up
to one-half of the graduation percentage requirement in subclause (I)
of clause (ii) may be satisfied by skilled journeypersons who
commenced working in the apprenticeable occupation prior to the chief'
s approval of an apprenticeship program for that occupation in the
county in which the project is located.
(C) "Skilled journey person" means a worker who either:
(i) Graduated from an apprenticeship program for the applicable
occupation that was approved by the chief or located outside
California and approved for federal purposes pursuant to the
apprenticeship regulations adopted by the federal Secretary of Labor.
(ii) Has at least as many hours of on-the-job experience in the
applicable occupation as would be required to graduate from an
apprenticeship program for the applicable occupation that is approved
by the chief.
(2) An entity's commitment that a skilled and trained workforce
will be used to perform the project or contract may be established by
any of the following:
(A) The entity's agreement with the director that the entity and
its subcontractors at every tier will comply with the requirements of
this subdivision and that the entity will provide the director with
evidence, on a monthly basis while the project or contract is being
performed, that the entity and its subcontractors are complying with
the requirements of this subdivision.
(B) If the director has entered into a project labor agreement
that will bind all contractors and subcontractors performing work on
the project or contract and that includes the requirements of this
subdivision, the entity's agreement that it will become a party to
that project labor agreement.
(C) Evidence that the entity has entered into a project labor
agreement that includes the requirements of this subdivision and that
will bind the entity and all its subcontractors at every tier
performing the project or contract.
(c)
(d) 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)
(e) 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)
(f) 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. The following minimum factors, however, shall
be weighted as deemed appropriate by the department:
(A) Price , unless a stipulated sum is specified .
(B) Technical design and construction expertise.
(C) Life-cycle costs over 15 or more years.
(2) Pursuant to subdivision (c), (d),
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 statement regarding the basis
of the award.
(6) The written decision supporting
statement regarding 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 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.
10195. 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. 6. Section 20133 of the Public
Contract Code is repealed.
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
January 1, 2012, 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 January 1, 2012, the
project shall be subject to the requirements of Section 1771.4 of the
Labor Code.
(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 Title 2 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 Title 1 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 subdivisions (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, 2016,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2016, deletes or extends that date.
SEC. 7. Section 20175.2 of the Public
Contract Code is repealed.
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
January 1, 2012, 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
January 1, 2012, the project shall be subject to the requirements of
Section 1771.4 of the Labor Code.
(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; 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 Title 2 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 Title 1 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.
SEC. 8. Section 20193 of the Public
Contract Code is repealed.
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
January 1, 2012, 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
January 1, 2012, the project shall be subject to the requirements of
Section 1771.4 of the Labor Code.
(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; 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 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.
SEC. 9. Section 20301.5 of the Public Contract Code is repealed.
SEC. 10. Article 22 (commencing with Section 20360) of Chapter 1
of Part 3 of Division 2 of the Public Contract Code is repealed.
SEC. 11. Section 20688.6 of the Public Contract
Code is repealed.
SEC. 11. Section 20688.6 of the Public
Contract Code is repealed.
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
January 1, 2012, 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
January 1, 2012, the project shall be subject to the requirements of
Section 1771.4 of the Labor Code.
(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; 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, 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.
SEC. 12. 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 chapter provides general authorization for local agencies
to use design-build for projects, excluding projects on the state
highway system.
(2) This chapter shall not be deemed to provide a preference for
the design-build method over other procurement methodologies.
22161. For purposes of this chapter, the following definitions
apply:
(a) "Best value" means a value determined by evaluation of
objective criteria related to price, features, functions, life-cycle
costs, experience, and past performance. 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.
involve the selection of the lowest cost proposal meeting
the interests of the local agency and meeting the objectives of the
project, selection of the best proposal for a stipulated sum
established by the procuring agency, or 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, water recycling facilities, or fire
protection facilities.
(3) Any transit district, included transit district, municipal
operator, included municipal operator, any consolidated agency, as
described in Section 132353.1 of the Public Utilities Code, any joint
powers authority formed to provide transit service, any county
transportation commission created pursuant to Section 130050 of the
Public Utilities Code, or any other local or regional agency,
responsible for the construction of transit projects.
(g) (1) For a local agency defined in paragraph (1) of subdivision
(f), "project" means the construction of a building or buildings and
improvements directly related to the construction of a building or
buildings, county sanitation wastewater treatment facilities, and
park recreational 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.
(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, regional and local water recycling facilities, or fire
protection facilities.
(3) For a local agency defined in paragraph (3) of subdivision
(f), "project" means a transit capital project, but does not include
state highway construction or local street and road projects.
22162. (a) Notwithstanding Except as
provided in subdivision (b), and 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) For the acquisition and installation of technology
applications or surveillance equipment designed to enhance safety,
disaster preparedness, and homeland security efforts, there shall be
no cost threshold and the local agency described in paragraph (3) of
subdivision (f) of Section 22161 may award the contract to the lowest
responsible bidder or by using the best value method.
(b)
(c) 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.
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. The documents, however, may
include operations during a training or transition period but shall
not include long-term operations 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,
expertise, acceptable safety record, 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) A design-build entity shall not be prequalified or shortlisted
unless the entity provides an enforceable commitment to the local
agency that the entity and its subcontractors at every tier will use
a skilled and trained workforce to perform all work on the project or
contract that falls within an apprenticeable occupation in the
building and construction trades.
(1) For purposes of this subdivision:
(A) "Apprenticeable occupation" means an occupation for which the
chief had approved an apprenticeship program pursuant to Section 3075
of the Labor Code prior to January 1, 2014.
(B) "Skilled and trained workforce" means a workforce that meets
all of the following conditions:
(i) All the workers are either skilled journeypersons or
apprentices registered in an apprenticeship program approved by the
Chief of the Division of Apprenticeship Standards.
(ii) (I) As of January 1, 2016, at least 20 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(II) As of January 1, 2017, at least 30 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(III) As of January 1, 2018, at least 40 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(IV) As of January 1, 2019, at least 50 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(V) As of January 1, 2020, at least 60 percent of the skilled
journey persons employed to perform work on the contract or project
by the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(iii) For an
apprenticeable occupation in which no apprenticeship program had been
approved by the chief prior to January 1, 1995, up to one-half of
the graduation percentage requirement in subclause (I) of clause (ii)
may be satisfied by skilled journeypersons who commenced working in
the apprenticeable occupation prior to the chief's approval of an
apprenticeship program for that occupation in the county in which the
project is located.
(C) "Skilled journey person" means a worker who either:
(i) Graduated from an apprenticeship program for the applicable
occupation that was approved by the chief or located outside
California and approved for federal purposes pursuant to the
apprenticeship regulations adopted by the federal Secretary of Labor.
(ii) Has at least as many hours of on-the-job experience in the
applicable occupation as would be required to graduate from an
apprenticeship program for the applicable occupation that is approved
by the chief.
(2) An entity's commitment that a skilled and trained workforce
will be used to perform the project or contract may be established by
any of the following:
(A) The entity's agreement with the local agency that the entity
and its subcontractors at every tier will comply with the
requirements of this subdivision and that the entity will provide the
local agency with evidence, on a monthly basis while the project or
contract is being performed, that the entity and its subcontractors
are complying with the requirements of this subdivision.
(B) If the local agency has entered into a project labor agreement
that will bind all contractors and subcontractors performing work on
the project or contract and that includes the requirements of this
subdivision, the entity's agreement that it will become a party to
that project labor agreement.
(C) Evidence that the entity has entered into a project labor
agreement that includes the requirements of this subdivision and that
will bind the entity and all its subcontractors at every tier
performing the project or contract.
(c)
(d) 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)
(e) 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)
(f) 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. The following minimum factors, however, shall
be weighted as deemed appropriate by the local agency:
(A) Price , unless a stipulated sum is specified .
(B) Technical design and construction expertise.
(C) Life-cycle costs over 15 or more years.
(2) Pursuant to subdivision (c), (d),
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 statement regarding
the basis of the award.
(6) The written decision supporting
statement regarding 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 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.
22168. Nothing in this article affects, expands, alters, or
limits any rights or remedies otherwise available at law.
SEC. 13. Due to the unique circumstances of the Marin Healthcare
District, the Legislature hereby finds and declares that a general
statute cannot be made applicable within the meaning of Section 16 of
Article IV of the California Constitution. Therefore, the special
legislation contained in Section 4 of this act is applicable only to
the Marin Healthcare District.
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.