BILL ANALYSIS �
SB 1509
Page 1
Date of Hearing: August 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1509 (Simitian) - As Amended: July 5, 2012
Policy Committee: Education Vote:6-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill repeals the sunset date (January 1, 2014) authorizing
K-12 and California Community Colleges (CCC) districts to enter
into a design-build contract for the design and construction of
an education facility.
FISCAL EFFECT
No direct costs, as use of the design-build process is
voluntary, and should result in potential savings. Presumably
K-12 and CCC districts will choose design-build for a specific
project upon determining a potential for savings in terms of
project schedule and/or costs.
COMMENTS
1)Purpose . A 2010 Legislative Analyst Office (LAO) report
regarding counties and design-build states: "At this point,
design-build authority has been extended to numerous entities
for the construction of buildings, wastewater facilities, and
transit projects. If the Legislature chooses to make
design-build more available to state and local governments for
these types of projects, we are not sure what additional value
would be added by continuing the reporting requirements in
statute."
The author further references the 2010 LAO report and contends
"it �LAO] found no evidence to discourage the Legislature from
granting design-build authority to local districts on an
on-going basis. Additionally, multiple LAO reports cite
design-build authority as a 'useful alternative' for
construction. Preserving design-build authority ensures that
SB 1509
Page 2
schools are equipped with tools they need to meet their unique
construction needs."
2)Background . There are two primary construction delivery
systems used in the public and private sectors: the
traditional design-bid-build method and the more recently used
design-build method. Under design-bid-build, an
architect/engineering firm is first awarded a design contract
based on subjective criteria. After detailed project plans and
specifications are completed, a contract for the construction
work, which accounts for over 80% of the project's costs, is
awarded to the lowest responsible bidder based on competitive
bidding. Under design-build, the public agency enters into a
single contract with an entity responsible for both project
design and construction.
AB 1402 (Simitian), Chapter 421, Statutes of 2001, and AB 1000
(Simitian), Chapter 637, Statutes of 2002, allowed all K-12
and three community college districts, plus five projects in
other community college districts, to utilize design-build,
but only for projects where total costs were at least $10
million. AB 1402 authorized K-12 districts to use this process
until January 1, 2007, while AB 1000 authorized design-build
for the five community college districts through January 1,
2008. Proposition 1D (AB 127, Nunez and Perata, 2006) extended
these sunset dates until 2010 and 2011, respectively. SB 614
(Simitian), Chapter 471, Statutes of 2007, lowered the
threshold for using design-build from $10 million to $2
million, extended the authority for design-build to all CCC
districts, and extended the sunset dates for both K-12 and CCC
district authorization until January 1, 2014.
3)Legislative Analyst's Reports . Prior legislation authorizing
design-build for educational facilities required the
Legislative Analyst's Office (LAO) to submit a report on the
implementation of design-build contracting. LAO issued this
report on the use of design-build for K-12 construction
projects based upon information submitted by one school
district. LAO had difficulty completing a report on
design-build contracting by community colleges because it had
not received any of the required information from community
college districts in order to complete the report.
An unrelated LAO report in 2005 that reviewed design-build
contracting across several public works sectors recommended
SB 1509
Page 3
the elimination of any contract thresholds on the design-build
authority in order to encourage greater use of this
alternative contract delivery system. This report also noted
that cities and counties using design-build have reported that
it takes less staff time to construct a project and results in
fewer claims, less litigation, and more price certainty.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081