BILL ANALYSIS �
AB 294
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Date of Hearing: March 21, 2011
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 294 (Portantino) - As Introduced: February 9, 2011
SUBJECT : Design-sequencing contracts
SUMMARY : Reenacts authorization, until January 1, 2015, for the
California Department of Transportation (Caltrans) to enter into
design-sequencing contracts, under certain conditions.
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 phase 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 in which Caltrans is the
responsible agency for the performance of design and that
permits construction of a project to commence before the
design is entirely complete.
1)Authorizes Caltrans, at its director's discretion, to let up
to five design-sequencing contracts for the design and
construction of transportation projects, based on criteria
developed by Caltrans.
2)Specifically provides that Caltrans may use employees or
consultants for design-sequencing contracts and requires that
these resources be accounted for in Caltran's capital outlay
support program for workload purposes.
3)Requires Caltrans, not later than July 1 of each year during
which design-sequencing contracts are underway, to prepare and
submit to the Legislature a status report for
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design-sequencing projects awarded prior to January 1, 2012.
4)Sets forth requirements governing the advertisement and award
of design-sequencing contracts, including the restriction 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 state or federal funds.
5)Includes a January 1, 2015, sunset date.
EXISTING LAW :
1)Does not provide Caltrans any current authority to let
design-sequencing contracts.
2)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."
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;
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; and,
c) Required Caltrans to prepare an annual status report on
the progress of design-sequencing contracts; also, required
a final report of the pilot program, detailing the positive
and negative aspects of design-sequencing.
4)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
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entities for architectural and engineering services for all
public works of improvement.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis of last year's AB 1760 (Blumenfield), a
nearly identical bill, minor absorbable costs for Caltrans to
comply with reporting requirements and potentially significant
cost savings from expediting project completion using
design-sequencing.
COMMENTS : This bill reenacts, for a limited-time,
design-sequencing authority for Caltrans that expired 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
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.
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Caltrans asserts that design-sequencing has the potential to
accelerate project delivery (or avoid project delays) with
minimal risks. Caltrans has 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 interim reports of the design-sequencing pilot program,
Caltrans reports mixed results in the initial design-sequencing
projects when compared to projects in the control group.
However, according to Caltrans staff, findings from some of the
more recent projects are more positive, due largely to the
refined criteria Caltrans is using to select appropriate
design-sequencing projects. In fact, in its 2010 status of the
previous design-sequencing program, Caltrans states, "The
Department envisions design-sequencing as a valuable project
delivery tool that can reduce project completion time when
properly used on appropriately selected projects."
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 transportation
funds should they become available.
Previous legislation: This bill is nearly identical to last
year's AB 1760 (Blumenfield) of 2010, which passed the
Legislature unanimously but was vetoed by Governor
Schwarzenegger. In his veto message, the Governor stated that
he believed any further design-sequencing authorizations should
wait until a final report on Phase 1 and Phase II project is
complete. The final Phase II project is scheduled for
completion in 2013 and it will take some time to close out the
project, evaluate it, and produce the report. Consequently, the
report is not likely to be completed until 2014 at the earliest.
REGISTERED SUPPORT/OPPOSITION
Support
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Professional Engineers in California Government (sponsor)
American Federation of State, County and Municipal Employees ,
AFL-CIO
Opposition
None on file
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093