BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2374|
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THIRD READING
Bill No: AB 2374
Author: Chiu (D)
Amended: 8/17/16 in Senate
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 - See last page for vote
SUBJECT: Construction Manager/General Contractor method:
regional transportation agency: County of Placer:
bridges
SOURCE: Author
DIGEST: This bill authorizes the use of the Construction
Manager/General Contractor (CM/GC) method for two projects not
on the state highway system, as specified.
Senate Floor Amendments of 8/17/16 authorize Placer County to
use CM/GC on the Yankee Jims Road Bridge Project and provide
legislative findings and declarations related to Placer County's
ability to use CM/GC on this specific bridge project.
ANALYSIS:
Existing law:
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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.
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 a Regional Transportation Agency (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.
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9)Sets forth provisions governing the process for procuring
CM/GC services.
This bill authorizes the use of the CM/GC method for two
projects not on the state highway system: the Yerba Buena Island
(YBI) West Side Bridges Seismic Retrofit and the Yankee Jims
Road Bridge projects in San Francisco and Placer County
respectively. This bill further 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 several projects 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 YBI
West-Side Bridges Retrofit project, which is a seismic safety
project on a locally owned and operated road facility, and the
Yankee Jims Road Bridge project in Placer County.
2)Major transportation projects. YBI West-Side Bridges Retrofit
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.
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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 topographical, environmental,
and construction staging issues."
Yankee Jims Road Bridge project in Placer County is to
replace a one-lane suspension bridge that was constructed
in 1930. According to Placer County, this bridge has the
lowest score of any in-service bridge in the state as rated
by Caltrans. Moreover, the bridge has qualified for
funding under the federal Highway Bridge Program with the
federal government recommending CM/GC as the preferred
project delivery method due to the project's remote
location, poor access, and crossing of the North Fork of
the American River.
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
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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
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.
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FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified8/17/16)
Automobile Club of Southern California
California Transportation Commission
San Francisco County Transportation Authority
Santa Clara Valley Transportation Authority
OPPOSITION: (Verified8/17/16)
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
8/18/16 16:57:30
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