BILL ANALYSIS Ó AB 2551 Page 1 ASSEMBLY THIRD READING AB 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 | | | | |Hernández, Holden, | | | | |Jones, Obernolte, | | | | |Quirk, Santiago, | | | | |Wagner, Weber, Wood | | | | | | | AB 2551 Page 2 | | | | | ------------------------------------------------------------------ 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 Page 3 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 bidder. 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 Page 4 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 circumstances. Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096 FN: 0003039