BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 2551

                                                                    Page  1


          2551 (Gallagher, et al.)

          As Amended  April 27, 2016

          Majority vote

          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |Water           |13-1 |Levine, Gallagher,    |Medina              |
          |                |     |Bigelow, Dodd,        |                    |
          |                |     |Eggman, Cristina      |                    |
          |                |     |Garcia, Eduardo       |                    |
          |                |     |Garcia, Gomez, Lopez, |                    |
          |                |     |Mathis, Olsen, Salas, |                    |
          |                |     |Williams              |                    |
          |                |     |                      |                    |
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Patterson, Daly,      |                    |
          |                |     |Eggman, Gallagher,    |                    |
          |                |     |Eduardo Garcia, Roger |                    |
          |                |     |HernŠndez, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |


                                                                    AB 2551

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          |                |     |                      |                    |

          SUMMARY:  Authorizes alternative contracting methods for surface  
          storage projects that receive Proposition 1 funding and  
          conditions the use of alternative project delivery methods on  
          meeting specific solicitation, qualification, and selection  
          requirements.  Specifically, this bill: 

          1)Authorizes the use of construction management at-risk,  
            design-build, or design-build-operate project delivery methods  
            for Proposition 1 funded surface storage projects.

          2)Specifies the process by which a local agency will solicit  
            bids on a project. 

          3)Prohibits a bidder from prequalifying unless they use a  
            skilled and trained workforce, as defined.

          4)Requires the local agency to make a list of prequalified  
            bidders available to the public.

          5)Specifies the bid selection process to be made from the pool  
            of prequalified bidders.   

          EXSITING LAW:

          1)Authorizes in various ways the use of alternative project  
            delivery methods for state and local agencies.


                                                                    AB 2551

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          2)Makes the surface storage projects identified in the CALFED  
            Bay-Delta Program Record of Decision, except projects  
            prohibited by the California Wild and Scenic Rivers Act,  
            eligible for $2.7 billion in funding continuously appropriated  
            to the California Water Commission (CWC) under Proposition 1.

          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, there are unknown future costs or savings depending  
          on the outcomes of the projects selected for alternative project  
          delivery.  Given that these are likely to be large, complex  
          projects, the costs or savings could be significant.

          COMMENTS:  The traditional public works contracting method is  
          known as design-bid-build, whereby project design is done under  
          contract by an architectural/engineering firm, then upon  
          completion of the design phase, the construction phase is put  
          out to bid and the contract is awarded to the lowest responsible  

          Increasing use of alternative project delivery methods have been  
          occurring in the public sector over the last 15 years.  Research  
          on alternative project delivery methods have shown these methods  
          can lead to greater flexibility and accountability, higher  
          quality, faster completion and lower overall project costs.  

          This bill authorizes the use of alternative methods of project  
          delivery for surface storage projects that receive Proposition 1  
          funding.  This bill does not alter the requirements currently  
          required under Proposition 1.  It lays out the specific process  
          by which a project could utilize the alternative methods.  Only  
          after meeting the requirements of Proposition 1, receiving  
          Proposition 1 funding, and meeting the solicitation and  
          evaluation requirements in this bill, will a surface storage  
          project be able to utilize alternative project delivery methods.  


                                                                    AB 2551

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          Proposition 1 authorizes the CWC to pay up to half of the cost  
          of new water storage projects, including dams and projects that  
          replenish groundwater.  This funding can only be used to cover  
          costs related to the "public benefits" associated with water  
          storage projects, including restoring habitats, improving water  
          quality, reducing damage from floods, responding to emergencies,  
          and improving recreation.

          Concerns have been raised by opponents that water storage  
          projects are particularly complex, expensive projects that are  
          not appropriate for alternative procurement.  The potential  
          failure of a large storage project could have catastrophic  
          public safety and economic consequences.  There is the potential  
          that this bill eliminates competitive bidding, allows a private  
          contractor or consortium to inspect and sign off on their own  
          work, and could increase project delivery costs in some  

          Analysis Prepared by:                                             
                          Ryan Ojakian / W., P., & W. / (916) 319-2096   
          FN: 0003039