Amended in Senate June 10, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1724

Introduced by Assembly Member Frazier

February 14, 2014

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.

LEGISLATIVE COUNSEL’S DIGEST

AB 1724, as amended, Frazier. Construction Manager/General Contractor method: regional transportation agencies.

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.

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. begin delete 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 delete begin insert The bill would require specified information provided to a regional transportation agency to be verified under oath. By expanding the scope of an existing crime, the bill would impose a state-mandated local program. end insert

begin delete

The

end delete

begin insert This end insert 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.

begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

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

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

SECTION 1.  

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

 

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

 

6970.  

For purposes of this chapter, the following definitions
apply:

begin insert

(a) “Best value” means a value determined by objective criteria,
including, but not limited to, price, features, functions, life-cycle
costs, and other criteria deemed appropriate by the regional
transportation agency.

end insert begin delete

(a)

end delete

begin insert (b) end insert  “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.

begin delete

(b)

end delete

begin insert (c) end insert  “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.

begin delete

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

end delete

(d) “Preconstruction services” means advice during the design
begin delete phase end delete begin insert phase, end insert 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.

6974.  

(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 begin delete under
consideration end delete 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 begin delete (a), end delete begin insert (b), end insert 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.

begin delete

(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.

end delete

6976.  

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

begin delete

(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.

end delete begin delete

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

end delete begin delete

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

end delete begin delete

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

end delete begin delete

(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.

end delete begin delete

(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.

end delete begin delete

(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.

end delete begin delete

(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.

end delete begin delete

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

end delete begin insert

(a) (1) A regional transportation agency shall establish a
procedure for the evaluation and selection of a construction
manager through a request for qualifications (RFQ). The RFQ
shall include, but not be limited to, the following:

end insert begin insert

(A) If the entity is a partnership, limited partnership, or other
association, a list of all of the partners, general partners, or
association members known at the time of the bid submission who
will participate in the Construction Manager/General Contractor
method contract, including, but not limited to, subcontractors.

end insert begin insert

(B) Evidence that the members of the entity have completed, or
demonstrated the experience, competency, capability, and capacity
to complete projects of similar size, scope, or complexity, and that
proposed key personnel have sufficient experience and training to
competently manage and complete the construction of the project,
as well as a financial statement that assures the regional
transportation agency that the entity has the capacity to complete
the project, construction expertise, and an acceptable safety record.

end insert begin insert

(C) The licenses, registration, and credentials required to
construct the project, including information on the revocation or
suspension of any license, registration, or credential.

end insert begin insert

(D) Evidence that establishes that the entity has the capacity to
obtain all required payment and performance bonding, liability
insurance, and errors and omissions insurance.

end insert begin insert

(E) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code,
or the federal Occupational Safety and Health Act of 1970 (Public
Law 91-596), settled against any member of the entity, and
information concerning workers’ compensation experience history
and worker safety program.

end insert begin insert

(F) Information concerning any debarment, disqualification,
or removal from a federal, state, or local government public works
project. Any instance in which an entity, its owners, officers, or
managing employees submitted a bid on a public works project
and were found to be nonresponsive, or were found by an awarding
body not to be a responsible bidder.

end insert begin insert

(G) Any instance in which the entity, or its owners, officers, or
managing employees, defaulted on a construction contract.

end insert begin insert

(H) Any violations of the Contractors’ State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), excluding alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding,
or of the Federal Insurance Contributions Act (26 U.S.C. Sec.
3101 et seq.) withholding requirements settled against any member
of the entity.

end insert begin insert

(I) Information concerning the bankruptcy or receivership of
any member of the entity, including information concerning any
work completed by a surety.

end insert begin insert

(J) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the entity during the five years preceding submission
of a bid pursuant to this section, in which the claim, settlement,
or judgment exceeds fifty thousand dollars ($50,000). Information
shall also be provided concerning any work completed by a surety
during this period.

end insert begin insert

(K) In the case of a partnership or other association that is not
a legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be fully liable for the performance under the contract.

end insert begin insert

(L) For the purposes of this paragraph, a construction
manager’s safety record shall be deemed acceptable if his or her
experience modification rate for the most recent three-year period
is an average of 1.00 or less, and his or her average total
recordable injury/illness rate and average lost work rate for the
most recent three-year period does not exceed the applicable
statistical standards for its business category or if he or she is a
party to an alternative dispute resolution system as provided for
in Section 3201.5 of the Labor Code.

end insert begin insert

(2) The information required pursuant to this subdivision shall
be verified under oath by the entity and its members in the manner
in which civil pleadings in civil actions are verified. Information
that is not a public record pursuant to the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code) shall not be open
to public inspection.

end insert begin insert

(b) For each RFQ, 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.

end insert

(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 begin delete the plans and
specifications developed with the preconstruction services provided
by construction manager input end delete begin insert a lowest responsible bidder or best
value method end insert . The construction manager shall not be excluded
from submitting a bid on this type of contract.

6978.  

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

begin delete

(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.

end delete begin delete

(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.

end delete begin delete

(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.

end delete

6980.  

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

6982.  

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

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert