AB 2551, as amended, Gallagher. Contract procurement: surface storage projects.
The Local Agency Public Construction Act establishes procedures and requirements for contracting by local agencies for the construction of public works, including the requirement to award the contract to the lowest responsible bidder. Existing law governing specified water districts requires those districts to use competitive bidding and to award the contract to the lowest responsible bidder.
This bill would allow a local agency to use the construction management at-risk, design-build,
begin delete public-private partnership,end delete or design-build-operate method of delivery on a surface storage project, as described. The bill would require these contracts to be awarded on a best value basis or to the lowest responsible bidder, and establish a procurement process for these
contracts. The bill would require the bidder to certify specified information under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would also prohibit a contracting entity from being prequalified or begin delete shortlistedend delete unless it provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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, as specified.
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:
Article 60.6 (commencing with Section 20928)
2is added to Chapter 1 of Part 3 of Division 2 of the Public Contract
3Code, to read:
The Legislature finds and declares that alternative
8project delivery, using the best value procurement methodology,
9has been authorized for various agencies that have reported benefits
10from those projects, including reduced project costs, expedited
11project completion, and design features that are not achievable
12through the traditional design-bid-build method.
(a) A surface storage project identified in the
14CALFED Bay-Delta Program Record of Decision, dated August
1528, 2000, that receives funding pursuant to Division 26.7
16(commencing with Section 79703) of the Water Code may use the
17following methods of project delivery:
18(1) Construction management at-risk.
20(3) Public-private partnership.end delete
11 21(4)end delete
P3 1(b) The contract shall be awarded on a best value basis or to the
2lowest responsible bidder.
The procurement process for the project shall progress
5(a) The local agency shall prepare a set of documents setting
6forth the scope and estimated price of the project. The documents
7may include, but need not be limited to, the size, type, and desired
8design character of the project, performance specifications covering
9the quality of materials, equipment, workmanship, preliminary
10plans or building layouts, or any other information deemed
11necessary to describe adequately the local agency’s needs. The
12performance specifications and any plans shall be prepared by a
13design professional who is duly licensed and registered in
15(b) The local agency shall prepare and issue a request for
16qualifications in order to prequalify or short-list the entities whose
17bids shall be evaluated for final selection. The request for
18qualifications shall include, but need not be limited to, the
20(1) Identification of the basic scope and needs of the project or
21contract, the expected cost range, the methodology that will be
22used by the local agency to evaluate bids, the procedure for final
23selection of the bidder, and any other information deemed
24necessary by the local agency to inform interested parties of the
26(2) Significant factors that the local agency reasonably expects
27to consider in evaluating qualifications, including technical design,
28construction expertise, acceptable safety records, and all other
30(3) A standard template request for statements of qualifications
31prepared by the local agency. In preparing the standard template,
32the local agency may consult with the construction industry, the
33building trades and surety industry, and other local agencies
34interested in using the authorization provided by this article. The
35template shall require all of the following information:
36(A) If the bidder is a privately held corporation, limited liability
37company, partnership, or joint venture, a listing of all of the
38shareholders, partners, or members known at the time of statement
39of qualification submission who will perform work on the project.
P4 1(B) Evidence that the members of the contracting team have
2completed, or demonstrated the experience, competency, capability,
3and capacity to complete, projects of similar size, scope, or
4complexity and that proposed key personnel have sufficient
5experience and training to competently manage and complete the
6project, and a financial statement that ensures that the bidder has
7the capacity to complete the project.
8(C) The licenses, registration, and credentials required for the
9project, including, but not limited to, information on the revocation
10or suspension of any license, credential, or registration.
11(D) Evidence that establishes that the bidder has the capacity
12to obtain all required payment and performance bonding, liability
13insurance, and errors and omissions insurance.
14(E) Information concerning workers’ compensation experience
15history and a worker safety program.
16(F) An acceptable safety record. A bidder’s safety record shall
17be deemed acceptable if its experience modification rate for the
18most recent three-year period is an average of 1.00 or less, and its
19average total recordable injury or illness rate and average lost work
20rate for the most recent three-year period does not exceed the
21applicable statistical standards for its business category or if the
22bidder is a party to an alternative dispute resolution system as
23provided for in Section 3201.5 of the Labor Code.
24(4) The information required under this subdivision shall be
25certified under penalty of perjury by the bidder and its general
26partners or joint venture members.
27(c) A contracting entity shall not be prequalified or
begin delete shortlistedend delete
28 unless the entity provides an enforceable commitment
29to the local agency that the entity and its subcontractors who will
30be doing construction on the project will use a skilled and trained
31workforce to perform all work on the project or contract that falls
32within an apprenticeable occupation in the building and
33construction trades in effect at the time the request for
34qualifications is issued.
35(1) For purposes of this subdivision:
36(A) “Apprenticeable occupation” means an occupation for which
37the chief had approved an apprenticeship program pursuant to
38Section 3075 of the Labor Code prior to January 1, 2014.
39(B) “Skilled and trained workforce” means a workforce that
40meets all of the following conditions:
P5 1(i) All the workers are either skilled journeypersons or
2apprentices registered in an apprenticeship program approved by
3the Chief of the Division of Apprenticeship Standards.
4(ii) (I) At the start of construction, at least 20 percent of the
5skilled journeypersons employed to perform work on the contract
6or project by the bidder and each of its subcontractors at every tier
7 are graduates of an apprenticeship program for the applicable
8occupation that was either approved by the Chief of the Division
9of Apprenticeship Standards pursuant to Section 3075 of the Labor
10Code or located outside California and approved for federal
11purposes pursuant to the apprenticeship regulations adopted by
12the federal Secretary of Labor.
13(II) By the second year of construction, and every year
14thereafter, the workforce requirements of subclause (I) shall
15increase by 10 percent until at least 50 percent of skilled
16journeypersons employed to perform work on the contract or
17project by the bidder and each of its subcontractors at every tier
18are graduates of an apprenticeship program for the applicable
19occupation that was either approved by the Chief of the Division
20of Apprenticeship Standards pursuant to Section 3075 of the Labor
21Code or located outside California and approved for federal
22purposes pursuant to the apprenticeship regulations adopted by
23the federal Secretary of Labor.
24(iii) For an apprenticeable occupation in which no apprenticeship
25program had been approved by the chief prior to January 1, 1995,
26up to one-half of the graduation percentage requirements of clause
27(ii) may be satisfied by skilled journeypersons who commenced
28working in the apprenticeable occupation prior to the chief’s
29approval of an apprenticeship program for that occupation in the
30county in which the project is located.
31(C) “Skilled journeyperson” means a worker who either:
32(i) Graduated from an apprenticeship program for the applicable
33occupation that was approved by the chief or located outside
34California and approved for federal purposes pursuant to the
35apprenticeship regulations adopted by the federal Secretary of
37(ii) Has at least as many hours of on-the-job experience in the
38applicable occupation as would be required to graduate from an
39apprenticeship program for the applicable occupation that is
40approved by the chief.
P6 1(2) An entity’s commitment that a skilled and trained workforce
2will be used to perform the project or contract may be established
3by any of the following:
4(A) The entity’s agreement with the local agency that the entity
5and its subcontractors at every tier will comply with this
6subdivision and that the entity will provide the local agency with
7evidence, on a monthly basis while the project or contract is being
8performed, that the entity and its subcontractors are complying
9with the requirements of this subdivision.
10(B) If the local agency has entered into a project labor agreement
11that will bind all contractors and subcontractors performing work
12on the project or contract and that includes the requirements of
13this subdivision, the entity’s agreement that it will become a party
14to that project labor agreement.
15(C) Evidence that the entity has entered into a project labor
16agreement or equivalent document that includes the requirements
17of this subdivision and that will bind the bidder and all its
18subcontractors who performed construction work on the project.
19(d) The local
agency shall make the list of prequalified entities
20available to the public.
21(e) Based on the documents prepared as described in subdivision
22(a), the local agency shall prepare a request for bids that invites
23prequalified or short-listed entities to submit competitive sealed
24bids in the manner prescribed by the local agency. The request for
25bids shall include, but need not be limited to, all of the following
27(1) Identification of the basic scope and needs of the project or
28contract, the estimated cost of the project, the methodology that
29will be used by the local agency to evaluate bids, whether the
30contract will be awarded on the basis of best value or to the lowest
31responsible bidder, and any other information deemed necessary
32by the local agency to inform interested parties of the contracting
34(2) Significant factors that the local agency reasonably expects
35to consider in evaluating bids, including, but not limited to, cost
36or price and all nonprice-related factors.
37(3) The relative importance or the weight assigned to each of
38the factors identified in the request for bids.
39(4) If a best value selection method is used, the local agency
40may reserve the right to request bid revisions and hold discussions
P7 1and negotiations with responsive bidders, in which case the local
2agency shall so specify in the request for bids and shall publish
3separately or incorporate into the request for bids applicable
4procedures to be observed by the local agency to ensure that any
5discussions or negotiations are conducted in good faith.
6(f) For those projects utilizing low bid as the final selection
7method, the competitive bidding process shall result in lump-sum
8bids by the prequalified or short-listed entities, and awards shall
9be made to the bidder that is the lowest responsible bidder.
10(g) For those projects utilizing best value as a selection method,
11the competition shall progress as follows:
12(1) Competitive bids shall be evaluated by using only the criteria
13and selection procedures specifically identified in the request for
14bids. The following minimum factors, however, shall be weighted
15as deemed appropriate by the local agency:
16(A) Price, unless a
stipulated sum is specified and including
17financial and bonding capacity requirements.
18(B) Technical design, procurement, and construction expertise.
19(C) Proposed construction approach, sequencing, and methods.
20(D) Compliance with the requirements of the owner-provided
22(E) Ability to meet the milestone schedule dates and, if
23applicable, any liquidated damages.
24(F) Ability to meet the quality requirements.
25(G) Proposed risk allocation and sharing.
26(H) Safety record.
28(J) Lifecycle costs over 15 or more years as specified by the
30(2) Pursuant to subdivision (d), the local agency may hold
31discussions or negotiations with responsive bidders using the
32process articulated in the local agency’s request for bids.
33(3) When the evaluation is complete, the responsive bidders
34shall be ranked based on a determination of value provided by the
35local agency if no more than three bidders are required to be
37(4) The award of the contract shall be made to the responsible
38bidder whose bid is determined by the local agency to have offered
39 the best value to the public.
P8 1(5) Notwithstanding any provision of the Water Code, upon
2issuance of a contract award the local agency shall publicly
3announce its award, identifying the bidder to which the award is
4made, along with a statement regarding the basis of the award.
5(6) The statement regarding the local agency’s contract award,
6described in paragraph (5), and the contract file shall provide
7sufficient information to satisfy an external audit.
(a) The local agency, in each request for proposals,
9may identify specific types of subcontractors that must be included
10in the entity statement of qualifications and proposal.
11(b) Following award of the contract, the entity shall proceed as
12follows in awarding construction subcontracts with a value
13exceeding one-half of 1 percent of the contract price allocable to
15(1) Provide public notice of availability of work to be
16subcontracted in accordance with the publication requirements
17applicable to the competitive bidding process of the local agency,
18including a fixed date and time on which qualification statements,
19bids, or proposals will be due.
20(2) Establish reasonable qualification criteria and standards.
21(3) Award the subcontract either on a best value basis or to the
22lowest responsible bidder. The process may include prequalification
23or short-listing. The foregoing process does not apply to
24construction subcontractors listed in the original proposal.
No reimbursement is required by this act pursuant to
26Section 6 of Article XIII B of the California Constitution because
27the only costs that may be incurred by a local agency or school
28district will be incurred because this act creates a new crime or
29infraction, eliminates a crime or infraction, or changes the penalty
30for a crime or infraction, within the meaning of Section 17556 of
31the Government Code, or changes the definition of a crime within
32the meaning of Section 6 of Article XIII B of the California