BILL NUMBER: SB 762 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 7, 2015
AMENDED IN SENATE MAY 12, 2015
AMENDED IN SENATE APRIL 28, 2015
AMENDED IN SENATE APRIL 15, 2015
INTRODUCED BY Senator Wolk
FEBRUARY 27, 2015
An act to amend Sections 1018 7.5 and 22161 of,
and to add and repeal Article 3.7 (commencing with Section
20155) of Chapter 1 of Part 3 of Division 2 of
of, the Public Contract Code, relating to public
contracts.
LEGISLATIVE COUNSEL'S DIGEST
SB 762, as amended, Wolk. Counties: competitive
Competitive bidding: best value: pilot program.
program: design-build.
The Local Agency Public Construction Act requires counties, among
others, to comply with specified procedures for contracting for
public works projects, including the use of a competitive bidding
process and awarding contracts to the lowest responsible bidder.
Existing law provides that specified provisions of the act applicable
to public works contracts awarded by counties, as specified, do not
apply to certain contracts by the County of Napa and the County of
San Diego.
This bill would establish a pilot program to allow counties to
select the lowest responsible bidder on the basis of best value, as
defined, for construction projects in excess of $1,000,000. The bill
would establish procedures and criteria for the selection of a best
value contractor. The bill would require that bidders verify
specified information under oath, thereby imposing a state-mandated
local program by creating a new crime. The bill would require the
board of supervisors of a participating county, before January 1,
2020, to submit a report to specified legislative committees. The
bill would repeal its the pilot program
provisions on January 1, 2020.
Existing law, until January 1, 2025, authorizes the Department of
General Services, the Department of Corrections and Rehabilitation,
and certain local agencies to use the design-build procurement
process for specified public works. Existing law defines "best value"
for those purposes to mean a value determined by evaluation of
objective criteria that may include, but are not limited to, price,
features, functions, life-cycle costs, experience, and past
performance.
This bill would modify that definition to have the objective
criteria evaluated, instead, relate to those specific criteria.
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:
SECTION 1. Section 10187.5 of the
Public Contract Code is amended to read:
10187.5. For purposes of this article, the following definitions
and the definitions in subdivision (a) of Section 13332.19 of the
Government Code shall apply:
(a) "Best value" means a value determined by evaluation of
objective criteria that may include, but not be limited,
relate to price, features, functions, life-cycle
costs, experience, and past performance. A best value determination
may involve the selection of the lowest cost proposal meeting the
interests of the department and meeting the objectives of the
project, selection of the best proposal for a stipulated sum
established by the procuring agency, or a tradeoff between price and
other specified factors.
(b) "Construction subcontract" means each subcontract awarded by
the design-build entity to a subcontractor that will perform work or
labor or render service to the design-build entity in or about the
construction of the work or improvement, or a subcontractor licensed
by the State of California that, under subcontract to the
design-build entity, specially fabricates and installs a portion of
the work or improvement according to detailed drawings contained in
the plans and specifications produced by the design-build team.
(c) "Department" means the Department of General Services and the
Department of Corrections and Rehabilitation.
(d) "Design-build" means a project delivery process in which both
the design and construction of a project are procured from a single
entity.
(e) "Design-build entity" means a corporation, limited liability
company, partnership, joint venture, or other legal entity that is
able to provide appropriately licensed contracting, architectural,
and engineering services as needed pursuant to a design-build
contract.
(f) "Design-build team" means the design-build entity itself and
the individuals and other entities identified by the design-build
entity as members of its team. Members shall include the general
contractor and, if utilized in the design of the project, all
electrical, mechanical, and plumbing contractors.
(g) "Director" means, with respect to procurements undertaken by
the Department of General Services, the Director of General Services
or, with respect to procurements undertaken by the Department of
Corrections and Rehabilitation, the secretary of that department.
SECTION 1. SEC. 2. Article 3.7
(commencing with Section 20155) is added to Chapter 1 of Part 3 of
Division 2 of the Public Contract Code, to read:
Article 3.7. Best Value Construction Contracting for Counties
Pilot Program
20155. (a) This article provides for a pilot program for counties
for construction projects in excess of one million dollars
($1,000,000).
(b) The board of supervisors of any county shall let any contract
for a construction project pursuant to this article to the lowest
responsible bidder or else reject all bids.
(c) The lowest responsible bidder may be selected on the basis of
the best value to a county. In order to implement this method of
selection, the board of supervisors shall adopt and publish
procedures and required criteria that ensure that all selections are
conducted in a fair and impartial manner. These procedures shall
conform to Sections 20155.2 and 20155.3 to
20155.6, inclusive, and shall be mandatory for counties who
choose to participate in the pilot program.
(d) If the board of supervisors deems it to be in the best
interest of the county, the board of supervisors, on the refusal or
failure of the successful bidder for a project to execute a tendered
contract, may award it to the second lowest responsible bidder. If
the second lowest responsible bidder fails or refuses to execute the
contract, the board of supervisors may likewise award it to the third
lowest responsible bidder.
20155.1. As used in this article:
(a) "Best value" means a procurement process whereby the lowest
responsible bidder may be selected on the basis of objective criteria
with the resulting selection representing the best combination of
price and qualifications.
(b) "Best value contract" means a contract entered into pursuant
to this article.
(c) "Best value contractor" means a properly licensed person,
firm, or corporation that submits a bid for, or is awarded, a best
value contract.
(d) "Demonstrated management competency" means the experience,
competency, capability, and capacity of the proposed management
staffing to complete projects of similar size, scope, or complexity.
(e) "Financial condition" means the financial resources needed to
perform the contract. The criteria used to evaluate a bidder's
financial condition shall include, at a minimum, capacity to obtain
all required payment bonds, performance bonds, and liability
insurance.
(f) "Labor compliance" means the ability to comply with, and past
performance with, contract and statutory requirements for the payment
of wages and qualifications of the workforce. The criteria used to
evaluate a bidder's labor compliance shall include, as a minimum, the
bidder's ability to comply with the apprenticeship requirements of
the California Apprenticeship Council and the Department of
Industrial Relations, its past conformance with those requirements,
and its past conformance with requirements to pay prevailing wages on
public works projects.
(g) "Qualifications" means the financial condition, relevant
experience, demonstrated management competency, labor compliance, and
safety record of the bidder, and, if required by the bidding
documents, some or all of the preceding qualifications as they
pertain to subcontractors proposed to be used by the bidder for
designated portions of the work. A county shall evaluate financial
condition, relevant experience, demonstrated management competency,
labor compliance, and safety record, using, to the extent possible,
quantifiable measurements.
(h) "Relevant experience" means the experience of the bidder with
projects of similar size, scope, or complexity.
(i) "Safety record" means the prior history concerning the safe
performance of construction contracts. The criteria used to evaluate
a bidder's safety record shall include, at a minimum, its experience
modification rate for the most recent three-year period, and its
average total recordable injury or illness rate and average lost work
rate for the most recent three-year period.
20155.2. As used in this article:
(a) "Apprenticeable occupation" means an occupation for which the
Chief of the Division of Apprenticeship Standards had approved an
apprenticeship program pursuant to Section 3075 of the Labor Code
prior to January 1, 2014.
(b) "Skilled and trained workforce" means a workforce that meets
all of the following conditions:
(1) All the workers are either skilled journeypersons or
apprentices registered in an apprenticeship program approved by the
chief.
(2) (A) As of January 1, 2016, at least 20 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(B) As of January 1, 2017, at least 30 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(C) As of January 1, 2018, at least 40 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(D) As of January 1, 2019, at least 50 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(E) As of January 1, 2020, at least 60 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the Chief of the Division of
Apprenticeship Standards pursuant to Section 3075 of the Labor Code
or located outside California and approved for federal purposes
pursuant to the apprenticeship regulations adopted by the federal
Secretary of Labor.
(F) For an apprenticeable occupation in which no apprenticeship
program had been approved by the chief prior to January 1, 1995, up
to one-half of the graduation percentage requirements of subparagraph
(B) may be satisfied by skilled journeypersons who commenced working
in the apprenticeable occupation prior to the chief's approval of an
apprenticeship program for that occupation in the county in which
the project is located.
(c) "Skilled journeyperson" means a worker who either:
(1) Graduated from an apprenticeship program for the applicable
occupation that was approved by the chief or located outside
California and approved for federal purposes pursuant to the
apprenticeship regulations adopted by the federal Secretary of Labor.
(2) Has at least as many hours of on-the-job experience in the
applicable occupation as would be required to graduate from an
apprenticeship program for the applicable occupation that is approved
by the chief.
20155.2. 20155.3. A county shall
proceed in accordance with the following when awarding best value
contracts under this article:
(a) A county shall not select a lowest responsible bidder on the
basis of the best value to a county unless, after evaluating at a
public meeting the alternative of awarding the contract on the basis
of the lowest bid price, the county makes a written finding that
awarding the contract on the basis of best value, for the specific
project under consideration, will accomplish one or more of the
following objectives: reducing project costs, expediting the
completion of the project, or providing features not achievable
through awarding the contract on the basis of the lowest bid price.
(b) A county shall prepare a solicitation for bids and give notice
pursuant to Section 20125. A county may identify specific types of
subcontractors that are required to be included in the bids. A county
shall comply with Chapter 4 (commencing with Section 4100) of Part 1
with regard to construction subcontractors identified in the bid.
(c) A county shall establish a procedure to prequalify bidders
pursuant to Section 20101. The information required pursuant to this
section shall be verified under oath by the bidder in the manner in
which civil pleadings in civil actions are verified. Information
submitted by the bidder as part of the evaluation process shall not
be open to public inspection to the extent that information is exempt
from disclosure under the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).
(d) Each solicitation for bids shall do all of the following:
(1) Invite prequalified bidders to submit sealed bids in the
manner prescribed by this article.
(2) Include a section identifying and describing the following:
(A) Criteria that a county will consider in evaluating bids.
(B) The methodology and rating or weighting system that will be
used by a county in evaluating bids.
(C) The relative importance or weight assigned to the criteria
identified in the request for bids.
(e) Final evaluation of the best value contractor shall be done in
a manner that prevents cost or price information from being revealed
to the committee evaluating the qualifications of the bidders prior
to completion and announcement of that committee's decision.
20155.4. (a) A best value entity shall not be prequalified or
shortlisted unless the entity provides an enforceable commitment to
the local agency that the entity and its subcontractors at every tier
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.
(b) An entity's commitment that a skilled and trained workforce
will be used to perform the project or contract may be established by
any of the following:
(1) The entity's agreement with the county that the entity and its
subcontractors at every tier will comply with the requirements of
this subdivision and that the entity will provide the county with
evidence, on a monthly basis while the project or contract is being
performed, that the entity and its subcontractors are complying with
the requirements of this subdivision.
(2) If the county has entered into a project labor agreement that
will bind all contractors and subcontractors performing work on the
project or contract, and that includes the requirements of this
subdivision, the entity's agreement that it will become a party to
that project labor agreement.
(3) Evidence that the entity has entered into a project labor
agreement that includes the requirements of this section and that
will bind the entity and all its subcontractors at every tier
performing the project or contract.
20155.3. 20155.5. Selection of the
best value contractor shall be made as follows:
(a) (1) An evaluation committee appointed by the county shall
evaluate the qualifications of the bidders based solely upon the
criteria set forth in the solicitation documents, and shall assign a
qualifications score to each bid.
(2) A county shall establish written policies and procedures,
consistent with applicable law, to ensure that members of an
evaluation committee are free from conflicts of interest, if the
county has not already established applicable written policies and
procedures.
(b) A county shall not award a contract for a construction project
pursuant to this article if a solicitation for bids for that
construction project results in the submission of fewer than three
responsive bids to the county for evaluation.
(c) The award of the contract shall be made to the bidder whose
bid is determined by a county, in writing, to be the best value to a
county. To determine the best value contractor, the county shall
divide each bidder's price by its qualifications score. The lowest
resulting cost per quality point will represent the best value bid.
(d) A county shall issue a written decision of its contract award.
(e) Upon issuance of a contract award, a county shall publicly
announce its award identifying the best value contractor to which the
award is made, the project, the project price, and the selected best
value contractor's score based on the evaluation criteria listed in
the request for bids. The notice of award shall be made public and
include the score of the selected best value contractor in relation
to all other responsive bidders and their respective prices. The
contract file shall include documentation sufficient to support the
decision to award.
20155.6. (a) If the county elects to award a project pursuant to
this article, retention proceeds withheld by the district from the
selected best value contractor shall not exceed 5 percent if a
performance and payment bond, issued by an admitted surety insurer,
is required in the solicitation of bids.
(b) In a contract between the selected best value contractor and a
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld shall not exceed the percentage specified in the contract
between the district and the selected best value contractor. If the
selected best value contractor provides written notice to a
subcontractor that, prior to or at the time the bid is requested, a
bond may be required and the subcontractor subsequently is unable or
refuses to furnish a bond to the selected best value contractor, then
the selected best value contractor may withhold retention proceeds
in excess of the percentage specified in the contract between the
district and the selected best value contractor from any payment made
by the selected best value contractor to the subcontractor.
20155.4. 20155.7. (a) Before
January 1, 2020, the board of supervisors of a participating county
shall submit a report to the appropriate policy committees of the
Legislature and the Joint Legislative Budget Committee. The report
shall include, but is not limited to, the following information:
(1) A description of the projects awarded using the best value
procedures.
(2) The contract award amounts.
(3) The best value contractors awarded the projects.
(4) A description of any written protests concerning any aspect of
the solicitation, bid, or award of the best value contracts,
including the resolution of the protests.
(5) A description of the prequalification process.
(6) The criteria used to evaluate the bids, including the
weighting of the criteria and an assessment of the effectiveness of
the methodology.
(7) If a project awarded under this article has been completed, an
assessment of the project performance, to include a summary of any
delays or cost increases.
(b) A report submitted pursuant to subdivision (a) shall be
submitted in compliance with Section 9795 of the Government Code.
20155.5. 20155.8. Except as
otherwise provided in this article, this article is not intended to
change in any manner any guideline, criteria, procedure, or
requirement of a county to let any contract for a project to the
lowest responsible bidder or else reject all bids.
20155.6. 20155.9. This article
shall remain in effect only until January 1, 2020, and as of that
date is repealed.
SEC. 3. Section 22161 of the Public
Contract Code is amended to read:
22161. For purposes of this chapter, the following definitions
apply:
(a) "Best value" means a value determined by evaluation of
objective criteria that may include, but not be limited
relate to price, features, functions, life-cycle
costs, experience, and past performance. A best value determination
may involve the selection of the lowest cost proposal meeting the
interests of the local agency and meeting the objectives of the
project, selection of the best proposal for a stipulated sum
established by the procuring agency, or a tradeoff between price and
other specified factors.
(b) "Construction subcontract" means each subcontract awarded by
the design-build entity to a subcontractor that will perform work or
labor or render service to the design-build entity in or about the
construction of the work or improvement, or a subcontractor licensed
by the State of California that, under subcontract to the
design-build entity, specially fabricates and installs a portion of
the work or improvement according to detailed drawings contained in
the plans and specifications produced by the design-build team.
(c) "Design-build" means a project delivery process in which both
the design and construction of a project are procured from a single
entity.
(d) "Design-build entity" means a corporation, limited liability
company, partnership, joint venture, or other legal entity that is
able to provide appropriately licensed contracting, architectural,
and engineering services as needed pursuant to a design-build
contract.
(e) "Design-build team" means the design-build entity itself and
the individuals and other entities identified by the design-build
entity as members of its team. Members shall include the general
contractor and, if utilized in the design of the project, all
electrical, mechanical, and plumbing contractors.
(f) "Local agency" means the following:
(1) A city, county, or city and county.
(2) A special district that operates wastewater facilities, solid
waste management facilities, water recycling facilities, or fire
protection facilities.
(3) Any transit district, included transit district, municipal
operator, included municipal operator, any consolidated agency, as
described in Section 132353.1 of the Public Utilities Code, any joint
powers authority formed to provide transit service, any county
transportation commission created pursuant to Section 130050 of the
Public Utilities Code, or any other local or regional agency,
responsible for the construction of transit projects.
(g) (1) For a local agency defined in paragraph (1) of subdivision
(f), "project" means the construction of a building or buildings and
improvements directly related to the construction of a building or
buildings, county sanitation wastewater treatment facilities, and
park and recreational facilities, but does not include the
construction of other infrastructure, including, but not limited to,
streets and highways, public rail transit, or water resources
facilities and infrastructure. For a local agency defined in
paragraph (1) of subdivision (f) that operates wastewater facilities,
solid waste management facilities, or water recycling facilities,
"project" also means the construction of regional and local
wastewater treatment facilities, regional and local solid waste
facilities, or regional and local water recycling facilities.
(2) For a local agency defined in paragraph (2) of subdivision
(f), "project" means the construction of regional and local
wastewater treatment facilities, regional and local solid waste
facilities, regional and local water recycling facilities, or fire
protection facilities.
(3) For a local agency defined in paragraph (3) of subdivision
(f), "project" means a transit capital project that begins a project
solicitation on or after January 1, 2015. A "project," as defined by
this paragraph, that begins the solicitation process before January
1, 2015, is subject to Article 6.8 (commencing with Section 20209.5)
of Chapter 1. "Project," as defined by this paragraph, does not
include state highway construction or local street and road projects.
SEC. 2. SEC. 4. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.