BILL ANALYSIS �
AB 195
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Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 195 (Hall) - As Introduced: January 28, 2013
Policy Committee: Local
GovernmentVote:7-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill extends counties' existing authority to use
design-build contracting from July 1, 2014 to July 1, 2020.
FISCAL EFFECT
No direct state costs. Presumably counties will continue to use
design-build on those projects where this alternative
contracting method provides opportunities for cost and time
savings.
COMMENTS
1)Background . The traditional public works contracting method is
known as design-bid-build, whereby project design is done
under contract by an architectural/engineering firm, then upon
completion of the design phase, the construction phase is put
out to bid and the contract is awarded to the lowest
responsible bidder.
In the last 10-15 years, contracting agencies have selectively
used an alternative contracting method known as design/build,
whereby entities with both design and construction management
capabilities compete for a single contract for both project
phases, typically for a fixed price. The intent of the
design/build alternative is to reduce the contracting agency's
risk with regard to project costs and schedule, expedite
project completion, and minimize change orders and claims.
2)Legislative History . AB 2296 (Dutra)/Chapter 594 of 2000
authorized seven specified counties to use design-build until
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2006. SB 287 (Cox)/Chapter 376 of 2005, extended the sunset
until 2011 and authorized a total of 30 specified counties to
use design-build. SB 416 (Ashburn)/Chapter 585 of 2007,
extended this authority to all counties. SB 879 (Cox)/Chapter
629 of 2010 extended the sunset to July 1, 2014.
These authorizing statutes have required counties using their
design-build authority to report specified project-specific
information to the Legislative Analyst's Office (LAO), which
was required to report its assessment to the Legislature.
3)Evaluation of Design-Build . In January 2010, the LAO issued
its second evaluation report to the Legislature. In the
report, the LAO states that "although it was difficult to draw
conclusions from the reports received about the effectiveness
of design-build compared to other project delivery methods, we
do not think that the reports provide any evidence that would
discourage the Legislature from granting design-build
authority to local agencies on an ongoing basis. In doing so,
however, we recommend the Legislature consider some changes
such as creating a uniform design-build statute, eliminating
cost limitations, and requiring project cost to be a larger
factor in awarding the design-build contract."
Current law requires counties using design-build to report to
the LAO by September 1, 2013, containing specified information
such as project costs, completion times, change orders, any
written protests, an assessment of the pre-qualification
process and the labor force compliance program, and other
elements. The LAO is to report to the Legislature, by January
1, 2014, its evaluation of counties' use of design-build.
4)Jumping the Gun ? Given that the LAO's statutory report on
design-build is not due until January, it is not clear why
counties authority should be extended at this time for another
six years. Moreover, the bill calls for no future reporting by
counties and no further evaluation by LAO beyond the currently
required report.
5)Recommended Amendment . Staff recommends only a one-year
extension of the sunset at this time, to provide an
opportunity for the Legislature to review the LAO's evaluation
and to consider whether to modify and extend counties'
authority. Assuming the LAO's review of design-build continues
to be generally favorable, and given that this authority will
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have been in statute for 15 years, repealing of the sunset
would merit consideration next year.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081