BILL ANALYSIS Ó AB 2551 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2551 (Gallagher, et al.) As Amended August 19, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |73-1 |(May 23, 2016) |SENATE: |36-1 |(August 23, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: W., P., & W. 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 (DBO), 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 to prequalify unless they use a skilled and trained workforce, as defined. AB 2551 Page 2 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. The Senate amendments: 1)Specify work force employment qualifications specifically conforming use of skilled workforce requirements to existing law. 2)Specify the process to comply with the skilled labor requirements. 3)Provide for the regulation and supervision by the state of any project constructed utilizing the provisions of this bill. 4)Make other clarifying and technical changes. EXISTING LAW: 1)In various ways authorizes the use of alternative project delivery methods for state and local agencies. Expressly prohibits the use of design-build-operate (DBO) procurement. 2)Makes 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 funding continuously appropriated to the Water Commission under Proposition 1. AB 2551 Page 3 3)Requires reservoir construction to be approved by the Department of Water Resources' Division of Dam Safety and requires reservoirs to be inspected by the Division. 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, as opposed to other procurement methods that might have been used on those projects. Any cost or benefit of a specific contracting method will depend on each individual project. 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 may 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 Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096 FN: 0004760