BILL ANALYSIS
AB 2098
Page 1
Date of Hearing: April 19, 2010
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 2098 (Miller) - As Amended: March 23, 2010
SUBJECT : Design-build contracts: California Transportation
Commission guidance
SUMMARY : Authorizes the California Transportation Commission
(CTC) to approve a locally sponsored design-build project if the
project is consistent with the CTC's policy guidance for the
Design-Build Demonstration Program, as adopted last year;
provides that this authority may be applied retroactively.
EXISTING LAW:
1)Sets forth provisions governing public works contracting.
These provisions generally prohibit public agencies from
contracting with the same firm for both the design and the
construction phases of a project.
2)Generally requires public works construction contracts to be
awarded to the lowest responsible bidder.
3)Enacted last year, established the Design-Build Demonstration
Program (program) that provides for a limited use of
design-build contracts for transportation.
4)Sets forth criteria and procedures governing the program.
5)Defines "design-build" to mean a procurement process in which
both the design and construction of a project are procured
from a single entity.
6)Authorizes local transportation entities, if authorized by the
CTC, to use design-build for up to five projects that may be
"for local street or road, bridge tunnel, or public transit
projects within the jurisdiction of the entity."
7)Authorizes the California Department of Transportation
(Caltrans), if authorized by the CTC, to use design-build on
up to 10 "state highway, bridge, or tunnel projects."
8)Limits the total number of projects authorized in the program
AB 2098
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to 15.
FISCAL EFFECT : Unknown
COMMENTS: Design-build is an alternate method for procuring
design and construction services for the delivery of public
works projects from a single entity. For example, instead of a
local agency contracting separately for an engineering firm to
design a project and a construction firm to build the project,
the agency would competitively bid the contract to a private
design-build entity. Design-build is being used in at least 18
other states and was recently adopted as an approved method of
transportation project delivery by the federal government.
State law currently allows selected state agencies and local
governments to use design-build but, until last year, had not
allowed design-build for highways. Last year, however, the
Legislature passed and the Governor signed SBX2 4 (Cogdill,
Chapter 2, Statutes of 2009) authorizing, among other things,
limited use of design-build for transportation. SBX2 4 sets
forth processes and procedures by which design-build projects
would be approved.
In September last year, the CTC adopted policy guidance for the
purpose of implementing the Design-Build Demonstration Program.
In its guidance, CTC indicated that it "may approve a project
for a local transportation entity that is on the state highway
system." The Professional Engineers in California Government
(PECG), the labor union representing Caltrans engineers,
subsequently argued that this guidance was in clear
contradiction to the plain language of SBX2 4 that allowed only
Caltrans to enter into design-build contracts for work on the
state highway system. In response to PECG's concerns, CTC staff
sought advice from its legal counsel and ultimately concluded
that a local transportation entity is not eligible to implement
a design-build project on the state highway system.
Nonetheless, at the CTC meeting held in Irvine on April 7, 2010,
CTC was asked to approve the use of design-build for the
Riverside County Transportation Commission (RCTC) Corridor
Improvement Project, a local transportation project slated for
implementation by the local entity on the state highway system.
In the staff recommendation that accompanied the project
proposal, CTC staff characterized the project as an excellent
design-build procurement candidate with the potential for
AB 2098
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achieving enhanced constructability and improved delivery
efficiency. Further, staff acknowledged that the project met
the Commission's criteria for approval as they were adopted on
September 9, 2009. However, staff recommended denying project
approval in light of PECG's assertion (and staff's agreement
therein) that local agencies cannot use design-build on the
state highway system. Despite staff's recommendation, CTC
commissioners voted unanimously to approve the RCTC project for
design-build.
Proponents of AB 2098 tout the potential benefits of RCTC's
project and resultant job creation as the reason that approval
of the project for design-build should be ratified by this bill.
Opponents, however, argue that, regardless of the merits of
the project, CTC over-stepped the bounds of its authority as
granted to it by SBX2 4.
REGISTERED SUPPORT / OPPOSITION :
Support
Orange County Business Council
Opposition
American Federation of State, County and Municipal Employees,
AFL-CIO
Professional Engineers in California Government
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093