Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1724

Introduced by Assembly Member Frazier

February 14, 2014

begin delete An act to amend Section 91.5 of the Streets and Highways Code, relating to highways. end delete begin insert An act to add Chapter 6.7 (commencing with Section 6970) to Part 1 of Division 2 of the Public Contract Code, relating to public contracts, and making an appropriation therefor. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1724, as amended, Frazier. begin delete State highways: litter control. end delete begin insert Construction Manager/General Contractor method: regional transportation agencies. end insert

begin insert

Existing law generally sets forth the requirements for the solicitation and evaluation of bids and the awarding of contracts by local agencies for public works contracts. Existing law authorizes the Department of Transportation, the Santa Clara County Valley Transportation Authority, and the San Mateo County Transit District to use the Construction Manager/General Contractor project delivery method for transit projects within their respective jurisdictions, subject to certain conditions and requirements.

end insert begin insert

This bill would authorize regional transportation agencies, as defined, to use the Construction Manager/General Contractor project delivery method, as specified, to design and construct certain projects. The bill would require a regional transportation agency, within 180 days after the completion of any project using the Construction Manager/General Contractor project delivery method, to prepare a report that describes each project and provides relevant data, as specified. The bill would also require that report to be posted on the regional transportation agency’s Internet Web site, and would require the agency to notify the Chair of the Assembly Committee on Transportation and the Chair of the Senate Committee on Transportation and Housing that the report is available online.

end insert begin insert

The bill would further require a regional transportation agency using the Construction Manager/General Contractor project delivery method to comply with certain prevailing wage provisions and to reimburse the Department of Industrial Relations for its reasonable and related enforcement costs, as specified. By requiring these reimbursements to be deposited into the State Public Works Enforcement Fund, a continuously appropriated fund, the bill would make an appropriation.

end insert begin delete

Existing law authorizes the Department of Transportation to enter into an agreement to accept funds, materials, equipment, or services from any person for maintenance of a section of state highway, including, cleanup or abatement of litter, and to post a courtesy sign in that regard.

end delete begin delete

This bill would make nonsubstantive changes to these provisions.

end delete

Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Chapter 6.7 (commencing with Section 6970) is
added to Part 1 of Division 2 of the end insert begin insert Public Contract Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 6.7. end insert Construction Manager/General
Contractor Method: Regional Transportation Agencies

 

begin insert 6970. end insert   

For purposes of this chapter, the following definitions
apply:

(a) “Construction manager” means a partnership, corporation,
or other legal entity that is able to provide appropriately licensed
contracting and engineering services as needed pursuant to a
Construction Manager/General Contractor method contract.

(b) “Construction Manager/General Contractor method” means
a project delivery method in which a construction manager is
procured to provide preconstruction services during the design
phase of the project and construction services during the
construction phase of the project. The contract for construction
services may be entered into at the same time as the contract for
preconstruction services, or at a later time. The execution of the
design and the construction of the project may be in sequential
phases or concurrent phases.

(c) “Department” means the Department of Transportation as
established under Part 5 (commencing with Section 14000) of
Division 3 of the Government Code.

(d) “Preconstruction services” means advice during the design
phase including, but not limited to, scheduling, pricing, and
phasing to assist the regional transportation agency to design a
more constructible project.

(e) “Project” means the construction of a highway, bridge,
expressway, or tunnel.

(f) “Regional transportation agency” means any of the
following:

(1) A transportation planning agency described in Section 29532
or 29532.1 of the Government Code.

(2) A county transportation commission established under
Section 130050, 130050.1, or 130050.2 of the Public Utilities
Code.

(3) Any other local or regional transportation entity that is
designated by statute as a regional transportation agency.

(4) A local transportation authority designated pursuant to
Division 12.5 (commencing with Section 131000) or Division 19
(commencing with Section 180000) of the Public Utilities Code.

(5) The Santa Clara Valley Transportation Authority established
pursuant to Part 12 (commencing with Section 100000) of Division
10 of the Public Utilities Code.

begin insert 6974. end insert   

(a) The Construction Manager/General Contractor
method may be used by a regional transportation agency pursuant
to this chapter if, after evaluation of the traditional
design-bid-build process of construction and of the Construction
Manager/General Contractor method in a public meeting, the
regional transportation agency makes a written finding that use
of the Construction Manager/General Contractor method on the
specific project under consideration will accomplish one or more
of the following objectives: reduce project costs, expedite the
project’s completion, or provide features not achievable through
the design-bid-build method. This finding shall be made prior to
the regional transportation agency entering into a Construction
Manager/General Contractor method contract.

(b) Except as specified in subdivision (c), the regional
transportation agency shall comply with subdivision (f) of Section
1771.5 of the Labor Code, and shall reimburse the Department of
Industrial Relations for its reasonable and directly related costs
of performing prevailing wage monitoring and enforcement on
public works projects pursuant to rates established by the
department as set forth in subdivision (h) of Section 1771.5 of the
Labor Code on projects using the Construction Manager/General
Contractor method under this chapter. All moneys collected
pursuant to this subdivision shall be deposited in the State Public
Works Enforcement Fund, created by Section 1771.3 of the Labor
Code, and shall be used only for enforcement of prevailing wage
requirements on those projects.

(c) In lieu of complying with subdivision (a), the regional
transportation agency may elect to enter into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

(d) (1) Within 180 days after the completion of a project using
the Construction Manager/General Contractor method, the
regional transportation agency shall prepare a report including
all of the following:

(A) Data on initial cost estimates, actual cost upon completion,
and the reasons for any difference.

(B) Estimated time for completion, actual time of completion,
and the reasons for any difference.

(C) The number and dollar value of any change orders for all
projects completed using the Construction Manager/General
Contractor method.

(2) A report required by this subdivision shall be posted on the
regional transportation agency’s Internet Web site. The regional
transportation agency shall notify the Chair of the Assembly
Committee on Transportation and the Chair of the Senate
Committee on Transportation and Housing that the report is
available online.

begin insert 6976. end insert   

A Construction Manager/General Contractor method
project shall progress as follows:

(a) A regional transportation agency that intends to use the
Construction Manager/General Contractor method shall adopt a
procedure for the evaluation and selection of a construction
manager in a public meeting. The procedure shall include a
two-phased request for qualifications (RFQ). Under Phase 1 of
the RFQ, the Construction Manager (CM) is identified using a
qualifications-based selection process. In Phase 2 of the RFQ, the
CM transitions to the General Contractor (GC) who completes
the work under either a fixed price or guaranteed maximum price.

(b) The procedures adopted by the regional transportation
agency shall include, at a minimum, all of the following:

(1) The criteria for membership in its selection panel.

(2) The evaluation criteria and relative weighting of the
evaluation criteria for scoring and ranking the construction
manager qualifications.

(3) If the regional transportation agency intends to establish a
preliminary list of the highest qualified firms who will be
subsequently interviewed prior to ranking the final list, the
evaluation criteria and relative weighting of the evaluation criteria
for scoring and ranking the construction manager interviews and
the method used to rank the final list using a combination of RFQ
and interview criteria.

(4) The minimum number, if any, of proposers who must respond
to the regional transportation agencies RFQ for the agency to use
the Construction Manager/General Contractor method.

(5) The maximum number, if any, of construction manager firms
who will be deemed qualified to continue to the interview phase,
if used, or to the negotiations.

(6) The process by which it will use an independent cost
estimator (ICE) as part of its negotiation for fixed price or
guaranteed maximum price construction services contract.

(7) Any specific subcontracting requirements deemed necessary
by the regional transportation agency in addition to that required
by existing statutes.

(c) (1) For each RFQ, the regional transportation agency shall
establish a selection panel to evaluate and rank proposals. A
person who is a member of the selection panel shall not be a
contractor under the contract or provide construction services,
materials, or other services under the contract. The regional
transportation agency shall generate a final list of qualified
persons or firms that participated in the RFQ prior to entering
into negotiations on the contract or contracts to which the RFQ
applies.

(2) The regional transportation agency and its selection panel
shall not request or consider fees, price, man-hours, or any other
cost information in its evaluation and ranking of proposals and
establishment of the final list for that contract.

(d) (1) For each RFQ, the regional transportation agency shall
enter into separate negotiations for the contract with the highest
qualified person or firm on the final list for that contract. However,
if the RFQ is for multiple contracts and specifies that all of the
multiple contracts will be awarded to a single construction
manager, there may be a single negotiation for all of the multiple
contracts. The negotiations shall include consideration of
compensation and other contract terms that the regional
transportation agency determines to be fair and reasonable to the
regional transportation agency. In making this decision, the
regional transportation agency shall take into account the
estimated value, the scope, the complexity, and the nature of the
professional services or construction services to be rendered. If
the regional transportation agency is not able to negotiate a
satisfactory contract with the highest qualified person or firm on
the final list, regarding compensation and on other contract terms
the regional transportation agency determines to be fair and
reasonable, the regional transportation agency shall formally
terminate negotiations with that person or firm. The regional
transportation agency may undertake negotiations with the next
most qualified person or firm on the final list in sequence until an
agreement is reached or a determination is made to reject all
persons or firms on the final list.

(2) If a contract for construction services is entered into
pursuant to this chapter and includes preconstruction services by
the construction manager, the regional transportation agency shall
enter into a written contract with the construction manager for
preconstruction services under which contract the regional
transportation agency shall pay the construction manager a fee
for preconstruction services in an amount agreed upon by the
regional transportation agency and the construction manager.
The preconstruction services contract may include fees for services
to be performed during the contract period provided, however,
the regional transportation agency shall not request or obtain a
fixed price or a guaranteed maximum price for the construction
contract from the construction manager or enter into a construction
contract with the construction manager until after the regional
transportation agency has entered into a services contract. A
preconstruction services contract shall provide for the subsequent
negotiation for construction of all or any discreet phase or phases
of the project.

(3) A contract for construction services shall be awarded after
the plans have been sufficiently developed and either a fixed price
or a guaranteed maximum price has been successfully negotiated.
In the event that a fixed price or a guaranteed maximum price is
not negotiated, the regional transportation agency shall not award
the contract for construction services.

(4) The regional transportation agency is not required to award
the construction services contract.

(5) Construction shall not commence on any phase, package,
or element until the regional transportation agency and
construction manager agree in writing on either a fixed price that
the regional transportation agency will pay for the construction
to be commenced or a guaranteed maximum price for the
construction to be commenced and construction schedule for the
project. The construction manager shall perform not less than 30
percent of the work covered by the fixed price or guaranteed
maximum price agreement reached. Work that is not performed
directly by the construction manager shall be bid to subcontractors
pursuant to Section 6705.

(e) In the event the regional transportation agency and the
construction manager cannot successfully negotiate a fixed price
or guaranteed maximum price contract, the regional transportation
agency shall be able to, at its sole discretion, publicly advertise
and award the construction contract using the plans and
specifications developed with the preconstruction services provided
by construction manager input. The construction manager shall
not be excluded from submitting a bid on this type of contract.

begin insert 6978. end insert   

All subcontractors bidding on contracts pursuant to this
chapter shall be afforded the protections contained in Chapter 4
(commencing with Section 4100). The construction manager shall
do all of the following:

(a) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the regional
transportation agency.

(b) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure established
pursuant to this chapter.

(c) Comply with any subcontracting procedures adopted by the
regional transportation agency that were included in the regional
transportation agency’s RFQ. If the regional transportation agency
has adopted procedures to prequalify public works contractors,
the construction manager may use the procedures to prequalify
subcontractors.

begin insert 6980. end insert   

Contracts awarded pursuant to this chapter shall be
valid until the project is completed.

begin insert 6982. end insert   

Nothing in this chapter is intended to affect, expand,
alter, or limit any rights or remedies otherwise available at law.

end insert

begin delete

SECTION 1.  

Section 91.5 of the Streets and Highways Code
is amended to read:

91.5.  

(a) The department may enter into an agreement to accept
funds, materials, equipment, or services from any person for
maintenance or roadside enhancement, including the cleanup and
abatement of litter, of a section of a state highway. The department
and the sponsoring person may specify in the agreement the level
of maintenance that will be performed.

(b) The director may authorize a courtesy sign. The courtesy
signs shall be consistent with existing code provisions and
department rules and regulations concerning those signs.

end delete