BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 294
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: portantino
VERSION: 5/27/11
Analysis by: Art Bauer FISCAL: yes
Hearing date: June 21, 2011
SUBJECT:
Design sequencing contracts
DESCRIPTION:
This bill authorizes the Department of Transportation (Caltrans)
to enter into design-sequencing contracts until January 1, 2015.
ANALYSIS:
Design-sequencing is 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 design for the entire project to be
completed before commencing construction, as is the case with
the traditional design-bid-build method of contracting.
Design-sequencing is different from design-build, the latter of
which entails the contracting of both the design and
construction to a single entity. With design-sequencing,
Caltrans retains responsibility for design but is able to award
a construction contract prior to completing the design for the
entire project. Under current law, a transportation agency may
award a construction contract when the design is at least 30
percent complete.
AB 405 (Knox), Chapter 378, Statutes of 1999, established the
Design-Sequencing Demonstration and Evaluation Program, which
authorized Caltrans to use design-sequencing for no more than
six transportation projects. One year later, AB 2607 (Knox),
Chapter 340, Statutes of 2000, was enacted to increase the
number of projects to twelve. The projects initiated by the two
Knox bills are referred to as Phase I. The demonstration
program was terminated on January 1, 2005. In 2004, SB 1210
(Torlakson), Chapter795, established Phase 2 of the
demonstration program, authorizing 12 more projects. This
authority expired on January 1, 2010.
AB 294 (PORTANTINO) Page 2
Under these bills, Caltrans is required to provide to the
Legislature annual status reports that include information on
the procedures, costs, and delivery schedules of the projects
for which it used design-sequencing. In addition, Caltrans is
required to establish a peer review committee to evaluate the
outcomes of design-sequencing projects for both Phase 1 and
Phase 2 of the demonstration program. The peer review committee
is required to prepare a report for submittal to the Legislature
that presents its findings and discusses the advantages and
disadvantages of the contracting method more fully after all of
the projects are completed.
This bill:
1. Continues the design-sequencing program until it
terminates on January 1, 2015.
2. Authorizes the Caltrans director to establish criteria
for selecting projects to be constructed by the
design-sequencing method and to enter into no more than
five design-sequencing projects by January 1, 2015.
3. Defines design-sequencing as a method of contracting
that permits the construction phase of a project to
commence before the entire project is designed and defines
a design-sequencing contract as a contract between Caltrans
and a contractor that executes a design-sequencing project.
4. Authorizes Caltrans to use its own employees or contract
with consulting engineering firms to perform design
services associated with a design-sequencing project. The
cost of design services for design sequencing shall be
accounted in Caltrans capital outlay support budget.
5. Establishes criteria 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 shorten
a project's schedule or reduce its cost, or will assist in
securing state or federal funds.
6. Requires Caltrans to submit an annual report on the
status of design-sequencing projects until all projects are
completed.
AB 294 (PORTANTINO) Page 3
COMMENTS:
1. Purpose . According to the author, since the expiration
of the design-sequencing program in January of 2010,
Caltrans has had one fewer option to effectively deliver
projects in a timely and efficient manner. This bill
reinstates the design-sequencing pilot program for an
additional four-years in order that Caltrans, at its
discretion, may utilize this project delivery tool for up
to five additional projects.
2. Performance of the Design-Sequencing Program . In the
annual report on the status of the design-sequencing
program issued last January, Caltrans reported ten projects
were included in the Phase I program. (Two projects could
not be made ready before the program terminated on January
1, 2005). A preliminary analysis of all completed projects
shows a minimal time savings. The ten completed Phase I
projects represent $872 million in capital construction
costs. When compared to the original delivery schedules,
the time difference on completed projects has ranged from
14 months delay to 18 months savings. Some of the project
delays were not attributable to the use of
design-sequencing and would likely have occurred using
traditional delivery methods. The most common delays
caused by design-sequencing were late delivery of
subsequent sequence packages and missing information on
delivery packages.
On the basis of the lessons learned in Phase I, Caltrans
has limited the number of projects for Phase II to eight.
One project was completed one month earlier than
forecasted. The remaining seven projects are in various
stages of construction. Caltrans is estimating the projects
will be completed between seven and twenty months earlier
than expected.
It should be recognized that there is a substantial time
delay between the enactment of the authorizing legislation
and project completion. Projects authorized in 1999
legislation were not completed as late as 2009. Moreover,
not all delays in meeting expectation are the result of
design delays or poor performance by the contract. For
example, a high-occupancy vehicle lane project on US-l 0 I
in Sonoma County was completed in April 2009, with one
AB 294 (PORTANTINO) Page 4
month time savings. Caltrans expected a twelve months'
time savings with this project. In fact, only a one month
savings was achieved. The eleven months lost from this
project's expected schedule was due to funding issues not
attributable to design-sequencing. Seven months were lost
before advertising due to a funding shortfall and another
four months were lost after bid opening due to the need for
a supplemental vote by the California Transportation
Commission (CTC) because the bids came in higher than the
amount the CTC had earlier approved. The funding shortfall
was related to the uncontrollable material price escalation
during the 2005 period.
This bill will allow Caltrans to further refine the
design-sequencing program.
3. Previous legislation . This bill is nearly identical to
last year's AB 1760 (Blumenfield), 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 the peer review
committee's final report on Phase 1 and Phase II programs
is complete.
Assembly Votes:
Floor: 79-0
Appr: 15-0
Trans: 13-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 15, 2010)
SUPPORT: Professional Engineers in California Government
(sponsor)
OPPOSED: None received.