BILL ANALYSIS
AB 1760
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1760 (Blumenfield)
As Amended July 15, 2010
Majority vote
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|ASSEMBLY: |74-0 |(May 6, 2010) |SENATE: |33-0 |(August 19, |
| | | | | |2010) |
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Original Committee Reference: TRANS.
SUMMARY : Reenacts authorization, until January 1, 2014, for the
California Department of Transportation (Caltrans) to enter into
design-sequencing contracts.
The Senate amendments impose restrictions on Caltrans' authority
to enter into design-sequencing contracts, as follows:
1)Limit Caltrans to no more than five design-sequencing
contracts.
2)State that Caltrans may use design-sequencing only on projects
that are deemed to have a high-probability of success, meaning
that using design-sequencing will reduce a project's schedule
and/or cost or assist in securing federal funds.
3)State that the authority to use design-sequencing sunsets in
January 2014, rather than January 2016.
4)Prescribe specific elements to be included in required status
reports.
EXISTING LAW :
1)Does not provide Caltrans any current authority to let
design-sequencing contracts.
2)Requires, generally, 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."
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3)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.
4)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.
5)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.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : According to Senate Appropriations Committee,
unknown costs to use design-sequencing over traditional contract
methods, although costs may be offset by accelerated project
delivery.
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)
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 the traditional
means, construction of any portion of the project cannot
commence until Caltrans has developed complete plans and
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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.
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.
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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 although it appears
stalled at this time.) 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.
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0005994