BILL ANALYSIS
AB 1760
Page 1
Date of Hearing: April 12, 2010
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 1760 (Blumenfield) - As Amended: March 22, 2010
SUBJECT : Department of Transportation: design-sequencing
contracts
SUMMARY : Reenacts authorization, until January 1, 2016, for the
California Department of Transportation (Caltrans) to enter into
design-sequencing contracts. Specifically, this bill :
1)Makes legislative findings and declarations regarding initial
assessments of the previous design-sequencing pilot program
and states the intent of the Legislature to authorize Caltrans
to use design-sequencing contracts on an interim basis until
the final assessment of the design-sequencing program is
completed.
2)Defines key terms, most notably:
a) "Design-sequencing" to mean a method of contracting that
permits the construction phrase of the project to commence
before the entire project is designed; and,
b) "Design-sequencing contract" to mean a contract between
Caltrans and a contractor that requires Caltrans to prepare
a design and permits construction of a project to commence
upon completion of a phase of the design.
3)Authorizes Caltrans to let design-sequencing contracts for the
design and construction of transportation projects, based on
criteria developed by Caltrans.
4)Requires the Caltrans director to attempt to balance the
geographical distribution of projects selected for
design-sequencing as well as to provide diversity in the types
of projects chosen.
5)Sets forth requirements governing the advertisement and award
design-sequencing contracts.
6)Sunsets on January 1, 2016.
AB 1760
Page 2
EXISTING LAW :
7)Does not provide Caltrans any current authority to let
design-sequencing contracts.
8)Generally requires Caltrans to award construction contracts
based on a process referred to as "design-bid-build." This
process requires Caltrans, before it enters into any contract
for construction of a project, to prepare or cause to be
prepared full, complete, and accurate plans, specifications,
and estimates of cost, "giving such directions as will enable
any competent mechanic or other builder to carry them out."
9)Until January 1, 2010:
a) Defined "design-sequencing" as a method of contracting
that enables the sequencing of design activities to permit
each construction phase to commence when design for that
phase is complete, instead of requiring the design for the
entire project to be completed before commencing
construction; and,
b) Authorized Caltrans to use the design-sequencing
contract method on a pilot basis-up to 12 projects in each
of Phase I and Phase II of the pilot program.
10)Requires Caltrans to prepare an annual status report on the
progress of design-sequencing contracts; also, requires a
final report of the pilot program, detailing the positive and
negative aspects of design-sequencing.
11)Provides, in the state Constitution as amended by the voters
in 2000 (Proposition 35), that all governmental entities in
California are allowed to contract with qualified private
entities for architectural and engineering services for all
public works of improvement.
FISCAL EFFECT : Unknown, although costs to initiate the use of
design-sequencing would be minimal.
COMMENTS : This bill reenacts, for a limited-time,
design-sequencing authority for Caltrans that expired earlier
this year on January 1, 2010.
Design-sequencing was first authorized in 1999 by AB 405 (Knox)
AB 1760
Page 3
Chapter 378, Statutes of 1999, which established the original
design-sequencing pilot program within Caltrans for up to six
projects. The intent of AB 405 was to offer an alternative
means to accelerate project delivery over traditional means of
contracting for highway improvements. Under these traditional
means, construction of any portion of the project cannot
commence until Caltrans has developed complete plans and
specifications for the project, placed the contract out for bid,
and awarded the contract. AB 405 sought to test a form of
contracting referred to as "design-sequencing" that would speed
completion of a project by allowing construction on one phase of
the project to be started while other phases of the project were
still under design. As part of the pilot program, Caltrans was
to report to the Legislature on the effectiveness of the
program.
Of the 12 design-sequencing projects authorized as Phase I of
the pilot program, Caltrans initiated 10 projects before the end
of that phase. SB 1210 (Torlakson), Chapter 795, Statutes of
2004, created Phase II of the pilot program and authorized an
additional 12 design-sequencing projects between January 2005
and January 2010. Of those, Caltrans initiated 11 projects.
In discussions with Caltrans, staff acknowledges that not all
design-sequencing projects have met with success. In fact,
Caltrans suggests that lessons learned from some of early
failures caused the department to take a more conservative
approach in its use of design-sequencing contracts. This in
turn resulted in some of the authorized design-sequencing
projects going unused.
Caltrans asserts that design-sequencing has the potential to
accelerate project delivery (or avoid project delays) with
minimal risks. In fact, last year Caltrans sponsored AB 732
(Jeffries) to extend the length of the pilot program so that it
could award the remaining projects allowed in Phase II of the
program using refined guidelines. Caltrans had hoped to garner
additional lessons upon which to base its final evaluation of
the pilot program. Caltrans argued that more needs to be
learned regarding design-sequence contracts to develop the
appropriate procedures, engineering mind set, and agency culture
needed to effectively implement this approach and to determine
the types of projects that would most benefit from use of this
approach.
AB 1760
Page 4
In an interim report of the design-sequencing pilot program,
dated March 2008, Caltrans compared six of the initial
design-sequencing projects against nine control projects.
Results of the program were mixed. However, according to
Caltrans staff, findings from some of the recent projects are
more positive, due largely to the refined criteria Caltrans is
using to select appropriate design-sequencing projects.
The author is seeking continuation of the design-sequencing
authority, in part, because of potential for additional federal
stimulus dollars that, if they materialize, will likely come
with some very short time frames for project delivery. Last
year, California received over $2.5 billion in one-time economic
recovery funds for transportation. (A second measure that could
result in another influx of one-time funds of about the same
amount of money is pending before Congress.) It is the author's
intent that, in light of Caltrans' overall experience to date
with design-sequencing, this bill will provide the department
with interim authority to use a project delivery tool that has
minimal risks and the potential to increase efficiency, reduce
costs, and help California take advantage of federal dollars
should they become available.
Suggested amendments:
12)The bill would reenact design-sequencing provisions that were
originally passed in 1999 and expired earlier this year. The
provisions define a design-sequencing contract such that
Caltrans would be required to prepare the designs. This
requirement contradicts Article XXII of the state Constitution
as passed by voters in 2000 as Proposition 35 and is,
therefore obsolete. It should be deleted.
13)Earlier iterations of design-sequencing provisions set aside
the State Contract Act and provisions governing the letting of
architectural and engineering contracts. Only one provision
in the State Contract Act hinders the use of design-sequencing
contracts and that is Section 10120 of the Public Contract
Code that requires a complete set of designs prior to awarding
a construction contract. Also, provisions related to
procuring architectural and engineering services are obsolete
for reasons related to Proposition 35. These provisions
should be deleted and a provision exempting design-sequencing
contracts from just the one section of the State Contract Act
should be inserted.
AB 1760
Page 5
14)The design-sequencing pilot program required Caltrans to use
design-sequencing on a variety of types of projects in
geographically disbursed areas of the state. These
requirements are no longer relevant because Caltrans has
already tried design-sequencing on a variety of projects and
is finding that some project types are more suitable for this
contract method than others. Consequently, provisions
encouraging Caltrans to essentially test a range of
design-sequencing contracts should be deleted.
Author's amendments : The author intends to take amendments in
committee at the request of the bill's sponsor, Professional
Engineers in California Government (PECG), to explicitly
provide that Caltrans may use employees or consultants for
design-sequencing contracts and that resources needed for
design-sequencing projects should be accounted for in the
department's capital outlay support program in its annual
budget.
REGISTERED SUPPORT / OPPOSITION :
Support
Professional Engineers in California Government (sponsor)
Opposition
American Council of Engineering Companies
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093