BILL NUMBER: SB 762 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 31, 2015
AMENDED IN ASSEMBLY AUGUST 17, 2015
AMENDED IN ASSEMBLY JULY 16, 2015
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 10187.5 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, the Public Contract Code, relating to public
contracts.
LEGISLATIVE COUNSEL'S DIGEST
SB 762, as amended, Wolk. Competitive bidding: best value: pilot
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 the Counties of Alameda, Los Angeles, Placer,
Riverside, San Bernardino, San Diego, Solano, and Yuba to
select a 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 the pilot program provisions on January 1, 2020.
The bill would make legislative findings and declarations as to
the necessity of a special statute for the Counties of Alameda, Los
Angeles, Placer, Riverside, San Bernardino, San Diego, Solano, and
Yuba.
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 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.
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 the Counties of Alameda, Los Angeles,
Placer, Riverside, San Bernardino, San Diego, Solano, and Yuba
for construction projects in excess of one million dollars
($1,000,000).
(b) The board of supervisors of any a
county shall let any contract for a construction project
pursuant to this article to the bidder representing the best value or
else reject all bids.
(c) The bidder may be selected on the basis of the best value to
a the 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 20155.3 to 20155.6, inclusive,
and shall be mandatory for counties a county
that choose chooses to
participate in the pilot program.
(d) If the board of supervisors of a county 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 bidder with the
second lowest best value score. score, as
determined in accordance with subdivision (c) of Section
20155.5. If the second bidder fails or refuses to execute the
contract, the board of supervisors may likewise award it to the
bidder with the third lowest best value score.
score, as determined in accordance with subdivision (c) of
Section 20155.5.
20155.1. As used in this article:
(a) "Best value" means a procurement process whereby the selected
bidder may be selected on the basis of objective criteria for
evaluating the qualifications of bidders with the resulting selection
representing the best combination of price and qualifications.
(b) "Best value contract" means a competitively bid 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) "County" means any of the following counties:
(1) The County of Alameda.
(2) The County of Los Angeles.
(3) The County of Placer.
(4) The County of Riverside.
(5) The County of San Bernardino.
(6) The County of San Diego.
(7) The County of Solano.
(8) The County of Yuba.
(d)
(e) "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)
(f) "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)
(g) "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)
(h) "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)
(i) "Relevant experience" means the experience,
competency, capability, and capacity to complete projects of similar
size, scope, or complexity.
(i)
(j) "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 of the Division of Apprenticeship Standards.
(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 United
States 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 United
States 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 United
States 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 United
States 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 United
States Secretary of Labor.
(F) For an apprenticeable occupation in which no apprenticeship
program had been approved by the Chief of the Division of
Apprenticeship Standards prior to January 1, 1995, up to one-half of
the graduation percentage requirements of subparagraphs (A)
through to (E), inclusive, 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 of the Division of
Apprenticeship Standards or located outside California and approved
for federal purposes pursuant to the apprenticeship regulations
adopted by the United States 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 of the Division of Apprenticeship Standards.
20155.3. A county shall proceed in accordance with the following
when awarding best value contracts under this article:
(a) A The county shall not select a
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 The 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 The 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 the county will
consider in evaluating bids.
(B) The methodology and rating or weighting system that will be
used by a the 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
contractor shall not be prequalified or shortlisted unless the
entity contractor provides an
enforceable commitment to the local agency
county that the entity contractor
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 A contractor'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 The contractor's
agreement with the county that the entity
contractor and its subcontractors at every tier will comply
with the requirements of this section and that the entity
contractor will provide the county with
evidence, on a monthly basis while the project or contract is being
performed, that the entity contractor
and its subcontractors are complying with the requirements of this
section.
(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
section, the entity's contractor's
agreement that it will become a party to that project labor
agreement.
(3) Evidence that the entity contractor
has entered into a project labor agreement that includes the
requirements of this section and that will bind the entity
contractor and all its subcontractors at every
tier performing the project or contract.
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 Except as provided in subdivision
(d) of Section 20155, 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 the 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 a county elects
to award a project pursuant to this article, retention proceeds
withheld by the county 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 county 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
county and the selected best value contractor from any payment made
by the selected best value contractor to the subcontractor.
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.
20155.8. 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.
20155.9. 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 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. 4. The Legislature finds and declares that a
special law is necessary and that a general law cannot be made
applicable within the meaning of Section 16 of Article IV of the
California Constitution because of the need to establish a pilot
project for the Counties of Alameda, Los Angeles, Placer, Riverside,
San Bernardino, San Diego, Solano, and Yuba to determine the
potential benefits and consequences of using best value procurement
to facilitate infrastructure improvements and ease fiscal impacts.
SEC. 4. SEC. 5. 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.