BILL ANALYSIS                                                                                                                                                                                                    Ó



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          SENATE THIRD READING
          SB 785 (Wolk and Hill)
          As Amended  August 22, 2014
          Majority vote

           SENATE VOTE  :35-0  
           
           LOCAL GOVERNMENT    7-2         APPROPRIATIONS      13-4        
           
           ----------------------------------------------------------------- 
          |Ayes:|Achadjian, Levine, Alejo, |Ayes:|Gatto, Bocanegra,         |
          |     |Bradford,                 |     |Bradford,                 |
          |     |Gordon, Frazier, Rendon   |     |Ian Calderon, Campos,     |
          |     |                          |     |Eggman, Gomez, Holden,    |
          |     |                          |     |Linder, Pan, Quirk,       |
          |     |                          |     |Ridley-Thomas, Weber      |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Melendez, Waldron         |Nays:|Bigelow, Donnelly, Jones, |
          |     |                          |     |Wagner                    |
           ----------------------------------------------------------------- 

          SUMMARY  :  Repeals existing law authorizing the Department of  
          General Services (DGS), the California Department of Corrections  
          and Rehabilitation (CDCR), and specified local agencies to use  
          the design-build (DB) procurement process, and enacts more  
          uniform provisions authorizing DGS, CDCR, and most local  
          agencies to utilize the DB procurement process for specified  
          public works projects.  Specifically,  this bill  :   

          1)Repeals statutes governing the use of DB by DGS, CDCR, and a  
            number of local agencies, and, instead, revises and recasts  
            those statutes to allow DGS, CDCR, cities, counties, and  
            specified special districts and transit agencies (awarding  
            authorities) to use DB for their public works contracts in  
            excess of $1 million using either a low bid or best value  
            process, until January 1, 2025.

          2)Maintains an existing exception to the cost threshold in 1)  
            above, that allows transit agencies to use DB for the  
            acquisition and installation of technology applications or  
            surveillance equipment designed to enhance safety, disaster  
            preparedness, and homeland security efforts, regardless of  
            cost.









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          3)Requires specified notification to the State Public Works  
            Board before DB can be used for DGS or CDCR projects.

          4)Prohibits DGS and CDCR from using DB for projects on the state  
            highway system.

          5)Requires the awarding authority to develop guidelines for a  
            standard organizational conflict-of-interest policy in  
            connection with DB projects. 

          6)Specifies the procurement process that DB projects must  
            follow, including:

             a)   Preparation of documents setting forth scope and  
               estimated price, as specified;

             b)   A prohibition against design-build-operate contracts,  
               except that documents may include operations during a  
               training or transition period but shall not include  
               long-term operations for any project;

             c)   Preparation and issuance of a request for qualifications  
               (RFQ) in order to pre-qualify bidders.  The RFQ must  
               contain specified elements, including (among other things)  
               a standard template request for statements of  
               qualifications that requires an acceptable safety record,  
               which shall be deemed acceptable if:

               i)     The proposer's 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,

               ii)    The proposer is a party to an alternative dispute  
                 resolution system as provided for in a specified section  
                 of the Labor Code, which governs workers' compensation  
                 and insurance.

          7)Prohibits a DB entity from being prequalified or shortlisted  
            unless the entity provides an enforceable commitment to the  
            director of DGS or CDCR or 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  








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            contract that falls within an apprenticeable occupation in the  
            building and construction trades, as specified.

          8)Requires the awarding authority to prepare a request for  
            proposals (RFP) that invites prequalified or short-listed  
            entities to submit competitive sealed proposals in the manner  
            prescribed by the awarding authority.

          9)Requires the RFP to include certain elements, as specified,  
            including project scope, cost, evaluation and awarding  
            methods, relative weight of selection factors, and procedures  
            for negotiations on best value selections.  

          10)Requires, for projects utilizing low bid as the selection  
            method, the competitive bidding process to result in lump-sum  
            bids by the prequalified or short-listed DB entities, and  
            awards to be made to the DB entity that is the lowest  
            responsible bidder.

          11)Requires projects utilizing best value as a selection method  
            to follow a specified process that requires proposals to be  
            evaluated by using only the criteria and selection procedures  
            specifically identified in the RFP, with the following minimum  
            factors that must be weighted as deemed appropriate by the  
            awarding entity:  price, unless a stipulated sum is specified;  
            technical design and construction experience; and, life-cycle  
            costs over 15 or more years.

          12)Allows the awarding authority to hold discussions or  
            negotiations with responsive proposers, and requires proposers  
            to be ranked based on a determination of value provided, with  
            a limit of three proposers required to be ranked, as  
            specified. 

          13)Requires the award of the contract to be made to the  
            responsible DB entity whose proposal is determined to have  
            offered the best value to the public, and requires the  
            awarding authority to publicly announce its award, as  
            specified.

          14)Requires the DB entity to provide payment and performance  
            bonds for the project in the form and in the amount required  
            by the awarding authority, and issued by a California admitted  
            surety.  The amount of the payment bond shall not be less than  
            the amount of the performance bond.








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          15)Requires the DB contract to provide errors and omissions  
            insurance coverage for the design elements of the project, and  
            requires the awarding authority to develop a standard form of  
            payment and performance bond for its DB projects.

          16)Specifies that awarding authorities may identify specific  
            types of subcontractors that must be included in the DB entity  
            statement of qualifications and proposal, as specified, and  
            outlines procedures for awarding subcontracts with a value  
            exceeding 0.5% of the contract price allocable to construction  
            work.

          17)Prohibits retention proceeds withheld by an agency from a DB  
            entity from exceeding 5% 
          if a performance and payment bond, issued by an admitted surety  
            insurer, is required in the solicitation of bids, and  
            specifies the retention proceeds for subcontracts.

          18)Deletes language in existing statutes governing the use of DB  
            that requires awarding authorities to reimburse the Department  
            of Industrial Relations (DIR) for its costs of performing  
            prevailing wage monitoring and enforcement on public works  
            projects, and that alternatively allows the agency to continue  
            operating an existing previously approved labor compliance  
            program to monitor and enforce prevailing wage requirements on  
            the project under specified circumstances. 

          19)Deletes existing laws requiring specified DB reporting to the  
            Legislative Analyst's Office (LAO). 

          20)Allows the Marin Healthcare District to use the DB method  
            established for local agencies under this bill to assign  
            contracts for the construction of a building or improvements  
            directly related to construction of a hospital or health  
            facility building at the Marin General Hospital, until January  
            1, 2025.

          21)Continues to allow the Sonoma Valley Health Care District to  
            use DB 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, but  
            requires the Sonoma Valley Health Care District to use the DB  
            procedure this bill establishes for local agencies rather than  
            the DB procedure that current law allows for counties, as  








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            specified.

          22)Extends the sunset date on provisions of law governing the  
            use of DB by transit operators, from January 1, 2015, to  
            January 1, 2017, and provides that those provisions apply only  
            to transit operators that begin a project solicitation before  
            January 1, 2015.  Transit operators that begin a project  
            solicitation on or after January 1, 2015, are subject to this  
            bill's provisions governing the use of DB by local agencies.

          23)Allows the San Diego Unified Port District to procure DB  
            contracts in excess of $1 million for the construction of  
            buildings and improvements directly related to the  
            construction of buildings, as specified.

          24)Finds and declares that, due to the unique circumstances of,  
            and the potential costs faced by, the San Diego Unified Port  
            District, a general statute cannot be made applicable within  
            the meaning of California Constitution Article IV, Section 16  
            and that the special legislation contained in 23) above, is  
            applicable only to the San Diego Unified Port District.

          25)Repeals an uncodified section of law that does the following:

             a)   Requires a specified peer review committee (committee)  
               established by the California Transportation Commission  
               (Commission) to operate until it has fulfilled its  
               reporting requirements, as outlined below;

             b)   Requires the committee to evaluate all transportation  
               projects using DB as authorized pursuant to SB 4 X2  
               (Cogdill), Chapter 2, Statutes of 2009-10 Second  
               Extraordinary Session, which allowed local transportation  
               entities to use DB on up to five projects and the  
               Department of Transportation (Caltrans) to use DB on up to  
               10 projects, as specified;

             c)   Requires the committee's evaluation to examine the  
               procurement method, comparing low bid and best value, and  
               to consider whether the projects were on time and on  
               budget.  The evaluation must also compare the DB projects  
               to similar transportation projects that used  
               design-bid-build procurement; and,

             d)   Requires the Commission to submit to the Legislature a  








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               mid-term report of its findings by June 30, 2012, and a  
               final report by June 30, 2015.

          26)Defines "best value" to mean a value determined by evaluation  
            of objective criteria that may include, but not be limited to,  
            price, features, functions, life cycle costs, experience, and  
            past performance.  A best value determination may involve the  
            selection of the lowest cost proposal meeting the interests of  
            DGS, CDCR, or 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.

          27)Defines "construction subcontract" to mean each subcontract  
            awarded by the DB entity to a subcontractor that will perform  
            work or labor or render service to the DB 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 DB 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 DB team.

          28)Defines "design-build" to mean a project delivery process in  
            which both the design and construction of a project are  
            procured from a single entity.

          29)Defines "design-build entity" to mean 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 DB contract.

          30)Defines "design-build team" to mean the DB entity itself and  
            the individuals and other entities identified by the DB 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.

          31)Defines "local agency" to mean the following:

             a)   A city, county, or city and county;

             b)   A special district that operates wastewater facilities,  
               solid waste management facilities, water recycling  








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               facilities, or fire protection facilities; and,

             c)   Any transit district, included transit district,  
               municipal operator, included municipal operator, any  
               consolidated agency, as specified, any joint powers  
               authority formed to provide transit service, any county  
               transportation commission, as specified, or any other local  
               or regional agency, responsible for the construction of  
               transit projects.

          32)Defines, for cities or counties, "project" to mean 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 and 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 cities or  
            counties that operate 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.

          33)Defines, for special districts, "project" to mean 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.

          34)Defines, for transit agencies, "project" to mean a transit  
            capital project that begins project solicitation on or after  
            January 1, 2015.  A project that begins the solicitation  
            process before January 1, 2015, is subject to current law  
            governing the use of DB by transit operators.  "Project" does  
            not include state highway construction or local street and  
            road projects.

          35)Makes findings and declarations regarding the DB method of  
            project delivery.

          36)Makes additional technical and conforming changes.

           EXISTING LAW  :








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          1)Requires public entities to comply with certain procedures in  
            soliciting and evaluating bids and awarding contracts for the  
            construction of public works, and generally requires agencies  
            to invite bids based on a completed set of engineering plans  
            and then award the bid to the lowest bidder, also called  
            design-bid-build.  

          2)Allows limited use of DB, which allows public agencies to  
            procure both design and construction services from a single  
            entity before the development of complete plans and  
            specifications.  DB contracts may be awarded on the basis of  
            best value or lowest responsible bidder, as specified in  
            existing law.

          3)Allows DGS and CDCR to utilize DB to construct specified  
            structures, including state office buildings and prison  
            facilities, for projects with a budget of at least $10 million  
            on a best value basis, using criteria such as proposed design  
            approach, life-cycle costs, project features and functions,  
            while contracts for projects with a budget of at least  
            $250,000 may be awarded to the lowest responsible bidder.

          4)Requires local officials, under the Local Agency Public  
            Construction Act (LAPC Act), to invite bids for construction  
            projects and then award contracts to the lowest responsible  
            bidder under the traditional design-bid-build project delivery  
            system.

          5)Allows local agencies to use DB as follows:

             a)   Allows counties to use DB to construct buildings and  
               related improvements and wastewater treatment facilities  
               that cost more than $2.5 million, until July 1, 2016;

             b)   Allows cities to use DB to construct buildings and  
               related improvements worth more than $1 million, until  
               January 1, 2016; 

             c)   Allows cities, counties, and special districts to use DB  
               to construct a statewide total maximum of 20 local  
               wastewater facilities, solid waste management facilities,  
               or water recycling facilities that cost more than $2.5  
               million each; 









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             d)   Allows specified special districts to construct projects  
               using the DB method; and,

             e)   Allows transit agencies to use DB and requires them to  
               establish a procedure for final selection of the DB entity,  
               subject to the following conditions:

               i)     In no case shall the transit operator award a  
                 contract to a DB entity for a capital maintenance or  
                 capacity-enhancing rail project unless that project  
                 exceeds $25 million in cost;

               ii)    For non-rail transit projects that exceed $2.5  
                 million, the transit operator may award the project to  
                 the lowest responsible bidder or by using the best value  
                 method; and,

               iii)   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 transit operator may award the contract to the lowest  
                 responsible bidder or by using the best value method.

          6)Generally requires awarding authorities to reimburse the DIR  
            for its costs of performing prevailing wage monitoring and  
            enforcement on public works projects, and that alternatively  
            allows the agency to continue operating an existing previously  
            approved labor compliance program to monitor and enforce  
            prevailing wage requirements on the project under specified  
            circumstances.

          7)Requires reporting to the LAO under specified DB statutes.

          8)Requires, pursuant to a county's authority to use DB, a  
            bidder's safety record to be deemed acceptable if:

             a)   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,
             b)   The bidder is a party to an alternative dispute  
               resolution system as provided for in a specified section of  








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               the Labor Code.

          9)Requires, pursuant to SB 4 X2, the following:

             a)   The Commission to establish a committee for the purposes  
               outlined below;

             b)   The committee to evaluate all transportation projects  
               using DB as authorized pursuant to SB 4 X2, which allowed  
               local transportation entities to use DB on up to five  
               projects and Caltrans to use DB on up to 10 projects, as  
               specified;

             c)   The committee's evaluation to examine the procurement  
               method, comparing low bid and best value, and to consider  
               whether the projects were on time and on budget.  The  
               evaluation must also compare the DB projects to similar  
               transportation projects that used design-bid-build  
               procurement;

             d)   The committee to operate until it has fulfilled its  
               reporting requirements; and,

             e)   The Commission to submit to the Legislature a mid-term  
               report of its findings by June 30, 2012, and a final report  
               by June 30, 2015.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee:  

          1)Updated information from CDCR indicates increased project  
            costs to CDCR of approximately 10% to 25% due to the limits on  
            subcontractor competition. This equates to a $75 million to  
            $187.5 million increase on two current projects of $750  
            million had this bill been in effect.

          2)Unknown impact on DGS and CDCR contracting costs as a result  
            of revised thresholds for which a design-build contract may be  
            used, and awarding of contracts on a "best value" rather than  
            "lowest responsible bidder" basis for more projects (General  
            Fund (GF) and various special funds).  To the extent that more  
            contracts are awarded on a "best value" basis and contracts  
            are awarded to bidders who may not have the lowest bid price,  
            overall contracting costs may increase.  On the other hand,  
            overall contracting costs may be lower to the extent that  








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            efficiencies are gained by using the design-build method on  
            more projects. 

          3)Unknown, but likely minor costs to DGS to ensure compliance  
            with labor requirements. 

                     4)Minor savings (GF) to the LAO by deleting reporting  
            requirements.

           COMMENTS  :

          1)Purpose of this bill.  This bill repeals existing law  
            authorizing DGS, CDCR, and local agencies to use the DB  
            procurement process, and enacts more uniform provisions  
            authorizing DGS, CDCR, and local agencies to utilize the DB  
            procurement process for specified public works projects  
            costing more than $1 million, with a limited cost threshold  
            exception for specified local transit agency public safety  
            projects.  This bill applies primarily to DGS, CDCR, and most  
            local agencies.  It does not authorize the use of DB for  
            projects on the state highway system, local street and road  
            projects, or school construction projects.  

            This bill allows the use of DB for the Marin Health Care  
            District and the San Diego Unified Port District, as  
            specified.  It also repeals provisions of law requiring  
            specified reporting to the Legislature on the use of DB as  
            authorized by SB 4 X2, which allowed local transportation  
            entities to use DB on up to five projects and Caltrans to use  
            DB on up to 10 projects.  This bill includes a sunset date of  
            January 1, 2025, thereby retaining a degree of legislative  
            oversight over the use of DB by these state and local  
            agencies.  This bill is sponsored by the Associated General  
            Contractors and the Design-Build Institute of America.

          2)Author's statement.  According to the author, "Under the  
            traditional design-bid-build method of delivery the design and  
            construction work is assigned to two separate entities.  On  
            the other hand, under the design-build project delivery method  
            the general contractor is responsible for both the design and  
            construction of the project.  The benefits of a design-build  
            contract project delivery system include an accelerated  
            project completion, cost containment, reduction of  
            construction complexity, and reduced risk exposure by shifting  
            the liability and risk for cost containment and project  








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            completion to the design-build entity. 

            "Current design build authorization is based on a compromise  
            struck in 2000 among local officials, labor groups, and  
            contractors.  Further changes to the language, consistent with  
            the principles of the 2000 compromise, were made by:  SB 287  
            (Cox), Chapter 376, Statutes of 2005; SB 416 (Ashburn),  
            Chapter 585, Statutes 2007, which extended this authority to  
            use design-build contracting for the construction of buildings  
            and directly related improvements to all 58 counties in the  
            state; and, AB 642 (Wolk), Chapter 314, Statues 2008, which  
            extended this authority to use design-build contracting for  
            the construction of buildings and directly related  
            improvements to all cities in the state."

          3)Background.  State law generally requires public agencies to  
            invite bids for construction projects and then award contracts  
            to the lowest responsible bidder.  This design-bid-build  
            method is the traditional approach to public works  
            construction.  

            Under the DB method, a single contract covers the design and  
            construction of a project with a single company or consortium  
            that acts as both the project designer and builder.  The DB  
            entity arranges all architectural, engineering, and  
            construction services, and is responsible for delivering the  
            project at a guaranteed price and schedule based upon  
            performance criteria set by the public agency.  The DB method  
            can be set by the public agency.  The DB method can be faster  
            and, therefore, cheaper, than the design-bid-build method, but  
            it requires a higher level of management sophistication since  
            design and construction may occur simultaneously.

            Advocates for the DB method of contracting for public works  
            contend that project schedule savings can be realized because  
            only a single request for proposals is needed to select the  
            project's designer and builder.  The more traditional  
            design-bid-build project approach requires the separate  
            selection of the design consultant or contractor, completion  
            of design, and then advertising for bids and selection of the  
            construction contractor.  Proponents add that DB allows the  
            overlap of design and construction activities, resulting in  
            additional time savings and lower project costs.  By avoiding  
            the delays and change orders that result from the traditional  
            design-bid-build method of contracting, proponents argue that  








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            DB can deliver public works faster and cheaper.

            Detractors of DB contend that it eliminates competitive  
            bidding, allows the private contractor or consortium to  
            inspect and sign off on their own work, and increases project  
            delivery costs.

          4)LAO reports and recommendations.  The LAO issued a report to  
            the Legislature on 
          February 3, 2005, titled Design-Build: An Alternative  
            Construction System, which reported on all DB authorities  
            granted to various types of government entities.  After  
            analyzing the claims of proponents and opponents and reviewing  
            the experience of local agencies that were authorized to use  
            DB at the time, the LAO recommended that, "the Legislature  
            grant design-build authority only to buildings and directly  
            related infrastructure.  There are more complex issues  
            associated with other public works projects such as  
            transportation, public transit, and water resources  
            facilities.  Evaluation of design-build as a construction  
            delivery option for these other infrastructure facilities is  
            beyond the scope of this report." 

            In January of 2010, the LAO issued a second report, this time  
            updating the Legislature on the use of DB by counties in  
            California, based on data received from counties that utilized  
            this methodology.  In the report, LAO states that "although it  
            was difficult to draw conclusions from the reports received  
            about the effectiveness of design-build compared to other  
            project delivery methods, we do not think that the reports  
            provide any evidence that would discourage the Legislature  
            from granting design-build authority to local agencies on an  
            ongoing basis.  In doing so, however, we recommend the  
            Legislature consider some changes such as creating a uniform  
            design-build statute, eliminating cost limitations, and  
            requiring project cost to be a larger factor in awarding the  
            design-build contract."

          5)Policy considerations.  This bill raises some questions the  
            Legislature may wish to consider:

             a)   Uniformity.  The stated intent of this bill is to  
               provide uniform statutes to govern the use of DB by state  
               and local agencies.  However, it does not repeal and recast  
               all existing DB statutes.  It also creates a statute that  








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               applies to transit operators that is in addition to, and  
               inconsistent with, the provisions of SB 1433 (Hill) of the  
               current legislative session, which makes a number of  
               changes to transit operators' existing authority to use DB  
               (see "Related legislation," below).  In addition, this bill  
               provides an exception to the DB rules it mandates for local  
               agencies by waiving the cost threshold for transit agencies  
               when they use DB to acquire and install technology  
               applications or surveillance equipment designed to enhance  
               safety, disaster preparedness, and homeland security  
               efforts.  While this language exists in current law and  
               this bill merely maintains this authority, this provision  
               and remaining untouched statutes appear to present an  
               inconsistency with the stated intent of this bill.  The  
               Legislature may wish to consider whether this bill achieves  
               an objective of uniformity.

             b)   LAO reporting.  This bill also repeals statutes  
               requiring specified DB reporting to the LAO.  The  
               Legislature may wish to consider whether continued LAO  
               reporting is prudent, or whether it is no longer necessary.

          6)Related legislation.  SB 1433 repeals the sunset date on  
            transit operators' authority to use DB for transit projects,  
            expands the number of entities eligible to exercise this  
            authority, eliminates minimum cost thresholds, and deletes  
            reporting requirements.

          7)Arguments in support.  The Design-Build Institute of America,  
            co-sponsor of this bill, states, "SB 785 which will help  
            streamline, consolidate and simplify design-build in  
            California.  Over the years far too many design-build statutes  
            have become law causing confusion, inconsistency, inefficiency  
            and wasted costs.  SB 785 will bring these various statutes  
            into a single 'boiler plate' for use by state agencies,  
            counties, cities, water municipalities, transit operators and  
            others.

            "The design-build project delivery process has become a  
            standard tool for public agencies in the United States over  
            the past 30 years.  The Federal Government has been utilizing  
            this method of project delivery extensively for 20 years  
            within the United States and at its locations all over the  
            world.  The vast majority of states have granted design-build  
            authority to state and local agencies in order to speed up the  








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            overall time required for project delivery, reduction in  
            costs, enhanced quality, and dramatic reductions in  
            litigation.

            "California legislation allowing design-build project delivery  
            was first adopted in 1993 with the passage of AB 896 [(Brown),  
            Chapter 429] and SB 772 [(Petris), Chapter 430] (both  
            applicable to the Department of General Services).  Since that  
            time numerous statutes have been passed with varying  
            provisions for different public agencies.  This has created  
            inconsistencies and inefficiencies for agencies and industry  
            practitioners trying to effectively utilize this project  
            delivery process.

            "SB 785 will integrate the design-build project delivery  
            process by repealing existing statutes, and replacing them  
            with two new chapters in the Public Contract Code.  It will  
            create a common template for statewide use of the design-build  
            project delivery process for those agencies currently  
            authorized to use design-build.  This bill will help create  
            common administrative guidelines which will improve  
            efficiencies and reduce costs to taxpayers on projects where  
            design-build delivery is utilized."

          8)Arguments in opposition.  The Associated Builders and  
            Contractors [ABC] of California, in opposition, write, "SB  
            785, as currently written, seeks to change Public Contract  
            Code  Section 10191 (b)(2)(G) and Section 22164 (b)(2)(G):  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.  Only union contractors are able to establish an  
            ADR program, under the referenced Labor Code Section 3201.5.    
             

            "ABC California does not believe it is appropriate public  
            policy to provide an exception for demonstration of safety.   
            Workplace safety does not depend on whether or not you have a  
            collective bargaining agreement.  All prospective bidders  
            should have to place in the public record their experience  








                                                                  SB 785
                                                                  Page  16

            modification rate and other safety standards in the section to  
            meet the requirements of Section 10191 (b)(2)(G) and Section  
            22164 (b)(2)(G).  We believe that ensuring a company's safety  
            record is part of their bid information is the best and only  
            way to demonstrate contractor commitment to workplace safety.   
            There shouldn't be exceptions for any bidder on safety. 

            "(In addition,) (p)olicymakers need to ensure that all state  
            and federally approved apprenticeship training programs are  
            able to provide trained apprentices and journeymen under the  
            skilled and trained workforce requirements? Our apprentice  
            training programs are recognized and approved by California's  
            Department of Industrial Relations? and the U.S. [United  
            States] Department of Labor and cover a wide variety of  
            skilled trades.  SB 785 seeks to bar apprenticeship programs  
            approved by the federal DOL [Department of Labor] if those  
            programs are located within California.  This provision raises  
            the core question as to why legislators believe it is  
            appropriate to bar skilled, trained, hardworking  
            California-based apprentices with the same skill set as those  
            dispatched from union programs from working on projects funded  
            with their tax dollars."


           Analysis Prepared by  :    Angela Mapp / L. GOV. / (916) 319-3958 


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