BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 195 (Hall) - Counties: design-build contracting authority.
Amended: May 20, 2013 Policy Vote: G&F 6-0
Urgency: No Mandate: Yes
Hearing Date: June 24, 2013
Consultant: Mark McKenzie
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 195 would extend the authority for counties to
use the design-build contracting method until January 1, 2016.
Fiscal Impact: Likely minor costs to the Department of
Industrial Relations (DIR) to perform prevailing wage monitoring
and enforcement, reimbursed by counties (State Public Works
Enforcement Fund).
Background: Existing law requires public entities to comply with
certain procedures in soliciting and evaluating bids and
awarding contracts for the construction of public works. The
traditional approach to public contracting is referred to as the
design-bid-build method, which requires public officials to
invite bids for construction projects, based on a completed set
of engineering plans, then award the construction bid to the
lowest bidder. By contrast, the design-build method allows
public officials to procure both design and construction
services from a single entity before the development of complete
plans and specifications. Design-build contracts may be awarded
on the basis of "best value" or "lowest responsible bidder," as
specified in existing law.
In addition to statutory authority provided to other state and
local entities, existing law authorizes counties to use the
design-build method to construct buildings and related
improvements and wastewater treatment facilities with project
costs of over $2.5 million until January 1, 2014. The most
recent legislation to extend county design-build authority (SB
879, Cox, Chap 629/2010) required each county that builds a
project using the design-build method from November 1, 2009
until August 1, 2013 to submit a report to the Legislative
AB 195 (Hall)
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Analyst's Office (LAO) by September 1, 2013. The LAO is
required to compile information and report specified information
on county use of design-build contracting to the Legislature by
January 1, 2014.
A previous report issued by the LAO in January of 2010 included
information provided by counties on 15 design-build projects
from nine counties, but only five of the projects were completed
at the time the reports were submitted. The LAO indicated that
it was difficult to draw conclusions from the small sampling of
reports received about the effectiveness of design-build
compared to other delivery methods, but there was no evidence to
discourage the Legislature from continuing authority for local
agencies to use design-build at that time. The report
recommended that extended authorization for use of the
design-build statutes should include a uniform and consistent
statute providing the same authority and limitations to all
local agencies, and also recommended that project cost should
constitute a larger factor in awarding design-build contracts.
Proposed Law: AB 195 would extend the authority for counties to
use the design-build contracting method from January 1, 2014 to
January 1, 2016.
Related Legislation: SB 785 (Wolk), which is currently on the
Senate Floor Inactive File, would repeal existing statutes
authorizing cities, counties, special districts and specified
state entities to use the design-build procurement process, and
instead enact a uniform statute that provides those entities
with the authority to use design-build for specified public
works projects in excess of $1 million using either low bid or
best value.
Staff Comments: Existing law requires counties that elect to use
design-build to either pay a fee into the State Public Works
Enforcement Fund to pay for DIR's enforcement of prevailing wage
requirements on public works projects, or enforce prevailing
wages through an approved labor compliance program. By
extending the sunset on county design-build authority for two
years, this bill would extend the terms of a continuously
appropriated special fund, thereby making an appropriation.
Costs for DIR to monitor and enforce prevailing wages for
counties that use design-build would be minor and fully covered
by the fees.
AB 195 (Hall)
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