BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2374|
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CONSENT
Bill No: AB 2374
Author: Chiu (D)
Introduced:2/18/16
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 11-0, 6/21/16
AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth, Wieckowski
ASSEMBLY FLOOR: 77-0, 4/11/16 (Consent) - See last page for
vote
SUBJECT: Construction Manager/General Contractor method:
regional transportation agencies: ramps
SOURCE: Author
DIGEST: This bill extends existing authority for regional
transportation agencies (RTAs) to use the Construction
Manager/General Contractor (CM/GC), as specified.
ANALYSIS:
Existing law:
1)Sets forth provisions governing public works contracting.
These provisions generally prohibit public agencies from
contracting with the same firm for both the design and the
construction phases of a project.
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2)Requires, generally, public works construction contracts to be
awarded to the lowest responsible bidder.
3)Describes the CM/GC procurement method and makes legislative
findings and declarations regarding benefits related to risk
transfer and project phasing using CM/GC.
4)Authorizes the California Department of Transportation
(Caltrans) to use CM/GC on no more than six projects, at least
five of which must have construction costs greater than $10
million.
5)Authorizes the Santa Clara County Valley Transportation
Authority, the San Mateo County Transit District, and the San
Diego Association of Governments to use CM/GC for transit
projects.
6)Authorizes an RTA to use the CM/GC project delivery method to
design and construct projects on expressways that are not on
the state highway system if the projects are developed in
accordance with an expenditure plan approved by the voters.
7)Defines key terms relative to the authority granted to RTAs to
use CM/GC, as specified.
8)Provides that the entity responsible for maintenance of local
streets and roads within the same jurisdiction of the
expressway shall be responsible for the maintenance of the
expressway.
9)Sets forth provisions governing the process for procuring
CM/GC services.
This bill extends existing authority for RTAs to use the CM/GC
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procurement method for ramp projects that are not on the state
highway system, and additionally removes the limitation that an
authorized CM/GC project must be included in a sales tax measure
expenditure plan.
Comments
1)Purpose. The author notes that this bill will extend CM/GC
authorization to ramps that are not on the state highway
system and remove the requirement that authorized projects be
included in a voter-approved expenditure plan. As a result,
this bill authorizes the San Francisco County Transportation
Authority to utilize CM/GC for the Yerba Buena Island (YBI)
West-Side Bridges Retrofit project - which is a seismic safety
project on a locally owned and operated road facility.
2)Major transportation project. YBI West-Side Bridges
Interchange Improvement Project includes two major components:
a) On the east side of Treasure Island, the YBI I-80 Ramps
project will construct new westbound on and off ramps to
the new Eastern Span of the Bay Bridge.
b) On the west side of the island, the YBI West-Side
Bridges Retrofit project will seismically retrofit the
existing bridge structures-critical components of island
traffic circulation between the islands and the Bay Bridge.
Specifically, the $66 million YBI West-Side Bridges Retrofit
project will seismically retrofit or replace eight locally
owned bridge structures that connect Treasure Island to the
San Francisco Bay Bridge. The facility is locally owned and
not a part of the state highway system, and partially funded
with state transportation revenues. This project has been
identified by the San Francisco Transportation Authority as a
"complicated public safety project, dealing with unique
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topographical, environmental, and construction staging
issues."
1)Traditional project delivery. Traditionally, state and local
entities develop and construct transportation projects with a
process known as the design-bid-build (DBB) delivery method.
This method requires the public agency to fully design a
project and then ask general contractors to bid on the
construction contract based on the agency's design. DBB
procurement results in project risks being largely borne by
the agency that designs the project, because the agency bears
the financial burden if the plans are inadequate or
unanticipated construction issues arise.
2)What is CM/GC? The CM/GC project-delivery method allows an
agency to engage a construction manager during the design
process to provide assistance to the design team, which can
ultimately lead to a more constructible project. When design
is nearly complete, the agency and the construction manager
negotiate a guaranteed maximum price for the construction of
the project based on the defined scope and schedule. If this
price is acceptable to both parties, they execute a contract
for construction services, and the construction manager
becomes the general contractor. Studies suggest CM/GC often
leads to less costly or more expediently delivered projects
because of the construction manager's involvement in the
design process.
3)Why pursue alternative project delivery approaches? For
decades, state and local agencies have relied on the DBB
procurement method for transportation projects. DBB reduces
the risk for the construction contractor because the state or
local agency has a completed design, procured right-of-way,
and achieved environmental clearance before letting the
contract. Agencies using this traditional method generally
receive the lowest initial-cost construction contracts for a
given project, because contractors are competitively bidding
on a relatively risk-free project. Drawbacks to DBB can
include longer completion times, constructability challenges
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unforeseen by the designers, and increasing costs over time
due to change orders and claims.
The CM/GC process is meant to provide continuity and
collaboration between the design and construction phases of
the project. Construction managers have an incentive to
provide input during the design phase that will enhance
constructability of the project later, because they know that
they will have the opportunity to become the general
contractor for the project. Furthermore, CM/GC promises to
save project delivery time, provide earlier cost certainty,
transfer some risks from the public agency to the contractor,
and ensure project constructability. Finally, it allows each
agency to design the project to complement the general
contractor's strengths and capabilities, thereby providing
maximum competitiveness in a low-bid procurement.
4)Current status. Regarding current CMGC projects underway,
while none of the projects have yet been completed, no
significant problems have been reported. In fact, the San
Francisco County Transportation Authority has analyzed the
potential use of CM/GC for this project and estimates that
this procurement method could reduce construction time by an
estimated six months, reduce costs by between 10% and 15%, and
reduce project risk.
As these projects move toward completion, a more thorough
examination of the advantages and disadvantages of CM/GC
contracting will be required. However, as the pros and cons
continue to be evaluated, utilizing CM/GC for other types of
projects may be beneficial for evaluation purposes.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
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SUPPORT: (Verified6/23/16)
Automobile Club of Southern California
California Transportation Commission
San Francisco County Transportation Authority
Santa Clara Valley Transportation Authority
OPPOSITION: (Verified6/23/16)
None received
ASSEMBLY FLOOR: 77-0, 4/11/16
AYES: Achadjian, Alejo, Travis Allen, Atkins, Baker, Bigelow,
Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos,
Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh,
Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher,
Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gordon,
Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin,
Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood
NO VOTE RECORDED: Gonzalez, Rendon
Prepared by:Manny Leon / T. & H. / (916) 651-4121
6/24/16 14:33:43
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