BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 2551

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          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.


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          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  

          2)Specify the process to comply with the skilled labor  

          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.


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          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  

          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.  


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          Analysis Prepared by:                                             
                          Ryan Ojakian / W., P., & W. / (916) 319-2096   
          FN: 0004760