BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 957|
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THIRD READING
Bill No: SB 957
Author: Hueso (D), et al.
Amended: 4/14/16
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 4/13/16
AYES: Hertzberg, Beall, Hernandez, Lara, Moorlach, Pavley
NO VOTE RECORDED: Nguyen
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Health care districts: design-build process
SOURCE: Author
DIGEST: This bill allows specified health care districts'
boards of directors to use design-build contracting for the
construction of hospital or health facility buildings.
ANALYSIS:
Existing law:
1)Requires, pursuant to the Local Agency Public Construction
Act, that local officials must invite bids for construction
projects and then award contracts to the lowest responsible
bidder.
2)Allows some state and local officials to use the
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"design-build" method to procure both design and construction
services from a single company before the development of
complete plans and specifications.
This bill:
1)Allows, until January 1, 2025, the board of directors of any
health care district that owns or operates a hospital or
clinic, notwithstanding any other law, to use the design-build
procedure to construct a building or improvements directly
related to the construction of a hospital or health facility
building.
2)Specifies that a health care district must use the
design-build procedure that current law establishes for local
agencies and provides that statutory references to a "local
agency" means a health care district and its board of
directors.
3)Requires that a hospital building project using the
design-build process authorized by this bill must be reviewed
and inspected in accordance with the standards and
requirements of the Alfred E. Alquist Hospital Facilities
Seismic Safety Act of 1983.
4)Finds and declares the Legislature's intent that health care
districts use the design-build process solely for buildings
associated with hospitals and health care facilities,
including clinics and skilled nursing facilities, and not for
other infrastructure, including streets, highways, public rail
transit, roads, bridges, and water resources facilities.
Background
State law allows some state and local officials to use the
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design-build method to procure both design and construction
services from a single company before the development of
complete plans and specifications. Under design-build, a public
agency contracts with a single entity - which can be a single
firm, a consortium, or a joint venture - to design and construct
a project. Before inviting bids, the agency prepares documents
that describe the basic concept of the project, as opposed to a
complete set of drawings and specifications of what will be
constructed. In the bidding phase, the agency typically
evaluates bids on a best-value basis, incorporating technical
factors, such as qualifications and design quality, in addition
to price.
Until January 1, 2025, all counties and cities can use the
design-build method to construct buildings and related
improvements and other specified types of public works that cost
more than $1 million (SB 785, Wolk, Chapter 931, Statutes of
2014). The Legislature also has authorized some special
districts to construct projects using the design-build method,
including four local health care districts:
The Sonoma Valley Healthcare District can use the design-build
process when contracting for the construction of a building
and improvements directly related to a hospital or health
facility building at the Sonoma Valley Hospital (SB 1699,
Wiggins, Chapter 415, Statutes of 2008). Following SB 1699's
enactment, the Sonoma Valley Health Care District's voters
approved a $35 million bond to finance earthquake safety
improvements to bring the hospital's emergency room into
compliance with the state's seismic safety standards for
hospitals. The District's upgraded facility, which was
constructed using design-build contracts, opened in 2013.
The Last Frontier Healthcare District can use the design-build
process when contracting for the construction of a building
and improvements directly related to a hospital or health
facility building at the Modoc Medical Center (SB 268, Gaines,
Chapter 18, Statutes of 2014).
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The Marin Healthcare District can use the design-build process
when contracting for the construction of a building and
improvements directly related to a hospital or health facility
building at the Marin General Hospital (SB 785, Wolk, Chapter
931, Statutes of 2014).
The Mayers Memorial Hospital District can use the design-build
process when contracting for the construction of a building
and improvements directly related to a hospital or health
facility building at the Mayers Memorial Hospital District (AB
1290, Dahle, Chapter 34, Statutes of 2015).
Comments
Purpose of this bill. When it comes to public works projects,
taxpayers want local officials to hold down costs, but they also
want to be sure that their tax dollars are spent wisely. While
the traditional contracting process minimizes opportunities for
public officials to award construction contracts based on
subjective factors, it also can be more time consuming and more
expensive than the design-build method. Health care districts,
in particular, face unique pressures to hold down costs. They
face market pressures to compete with other health care
providers while complying with the Brown Act, the Public Records
Act, the Political Reform Act, public contracting laws, and
other statutory restrictions that are not imposed on their
private sector competitors. The Legislature has already allowed
four health care districts to use design-build contracting to
construct new facilities. This bill grants the same
design-build authority to all health care districts, allowing
them to keep costs down, expedite the design and construction
process, and save taxpayer dollars while fulfilling community
health care needs.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
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SUPPORT: (Verified5/2/16)
Association of California Healthcare Districts
American Council of Engineering Companies - California
Beach Cities Health Care District
California Labor Federation
California Special District Association
District Hospital Leadership Forum
Economic Development Corporation of Mariposa County
John C. Fremont Health Care District
State Building and Construction Trades Council
OPPOSITION: (Verified5/2/16)
None received
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
5/4/16 14:57:58
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