Senate Bill No. 1433

Introduced by Senator Hill

February 21, 2014

An act to amend Sections 20209.5, 20209.7, and 20209.11 of, and to repeal Sections 20209.12 and 20209.14 of, the Public Contract Code, relating to transit contracts, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 1433, as introduced, Hill. Local Agency Public Construction Act: transit design-build contracts.

Existing law authorizes a transit operator to enter into a design-build contract, as specified. Existing law defines a “transit operator” as a transit district, included transit district, municipal operator, included municipal operator, or transit development board, a consolidated agency, or any joint powers authority formed to provide transit service. Existing law establishes conditions for the selection of the design-build entity relating to the dollar amounts of the contracts. Existing law requires a transit operator, as defined, awarding a contract for a public works project pursuant to these provisions, to reimburse the Department of Industrial Relations for costs of performing prevailing wage monitoring and enforcement of the public works project and would require moneys collected to be deposited into the State Public Works Enforcement Fund, a continuously appropriated fund. Existing law repeals these provisions on January 1, 2015.

This bill would include in the definition of “transit operator” any other local or regional agency responsible for the construction of transit projects, thereby extending the design-build procurement authorization. The bill would eliminate the requirement that the project cost exceed a specified amount. The bill would delete the repeal date, thus extending the operation of these provisions indefinitely.

The bill, by extending the design-build procurement authorization and by extending the deposit of moneys into the State Public Works Enforcement Fund, a continuously appropriated fund, would make an appropriation.

The bill, by extending the design-build procurement authorization, would impose the statement of qualifications requirement upon transit operators, subject to penalty of perjury, thereby creating a new crime and imposing a state-mandated local program.

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.

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

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

Section 20209.5 of the Public Contract Code is
amended to read:

20209.5.  

As used in this article, the following terms have the
following meanings:

(a) “Best value” means a value determined by objective criteria
and may include, but is not limited to, price, features, functions,
life-cycle costs, and other criteria deemed appropriate by the transit
district.

(b) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(c) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.

(d) “RFP” means request for proposal.

(e) “Transit operator” means any transit district, included transit
district, municipal operator, included municipal operator, begin delete or end delete transit
development board, begin delete as defined in Section 99210 of the Public
Utilities Code, or end delete a consolidated agency as begin delete defined end delete begin insert described end insert in
Section 132353.1 of the Public Utilities Code, begin delete or end delete any joint powers
authority formed to provide transit service begin insert , or any other local or
regional agency responsible for the construction of transit projects,
including, but not limited to, a county transportation commission
created by Section 130050 of the Public Utilities Code end insert .

SEC. 2.  

Section 20209.7 of the Public Contract Code is
amended to read:

20209.7.  

Design-build projects shall progress in a three-step
process, as follows:

(a) The transit operator shall prepare a set of documents setting
forth the scope of the project. The documents shall include, but
are not limited to, the size, type, and desired design character of
the buildings, transit facilities, and site, performance specifications
covering the quality of materials, equipment, and workmanship,
preliminary plans or building layouts, or any other information
deemed necessary to describe adequately the transit operator’s
needs. The performance specifications and any plans shall be
prepared by a design professional duly licensed or registered in
California.

(b) Any architectural or engineering firm or individual retained
by the transit operator to assist in the development criteria or
preparation of the request for proposal (RFP) is not eligible to
participate in the competition for the design-build entity.

(c) (1) For contracts for public works projects awarded prior
to the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the transit operator shall establish and enforce
a labor compliance program containing the requirements outlined
in Section 1771.5 of the Labor Code or shall contract with a third
party to operate this labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code. This
requirement shall not apply to projects where the transit operator
or the design-build entity has entered into a collective bargaining
agreement that binds all of the contractors performing work on the
project, or to any other project of the transit operator that is not
design-build.

(2) For contracts for public works projects awarded on or after
the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the transit operator shall reimburse the
department 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.
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.

(3) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the transit
operator may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters 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) Each RFP shall identify the basic scope and needs of
the project or contract, the expected cost range, and other
information deemed necessary by the contracting agency to inform
interested parties of the contracting opportunity.

(2) Each RFP shall invite interested parties to submit competitive
sealed proposals in the manner prescribed by the contracting
agency.

(3) Each RFP shall include a section identifying and describing:

(A) All significant factors that the agency reasonably expects
to consider in evaluating proposals, including cost or price and all
nonprice-related factors.

(B) The methodology and rating or weighting process that will
be used by the agency in evaluating competitive proposals and
specifically whether proposals will be rated according to numeric
or qualitative values.

(C) The relative importance or weight assigned to each of the
factors identified in the RFP. If a nonweighted system is used, the
agency shall specifically disclose whether all evaluation factors
other than cost or price, when combined, are any of the following:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(D) If the contracting agency wishes to reserve the right to hold
discussions or negotiations with offerors, it shall specify the same
in the RFP and shall publish separately or incorporate into the RFP
applicable rules and procedures to be observed by the agency to
ensure that any discussions or negotiations are conducted in a fair
and impartial manner.

(e) (1) The transit operator shall establish a procedure to
prequalify design-build entities using a standard questionnaire
developed by the Director of Industrial Relations. The standardized
questionnaire shall not require prospective bidders to disclose any
violations of Chapter 1 (commencing with Section 1720) of Part
7 of Division 2 of the Labor Code committed prior to January 1,
1998, if the violation was based on a subcontractor’s failure to
comply with these provisions and the bidder had no knowledge of
the subcontractor’s violations and the bidder complied with the
conditions set forth in subdivision (b) of Section 1775 of the Labor
Code. In preparing the questionnaire, the director shall consult
with the construction industry, building trades, transit operators,
and other affected parties. This questionnaire shall require
information relevant to the architecture or engineering firm that
will be the lead on the design-build project. The questionnaire
shall include, but is not limited to, all of the following:

(A) A listing of all the contractors that are part of the
design-build entity.

(B) Evidence that the members of the design-build 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
design and construction of the project.

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

(D) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance,
as well as a financial statement that assures the transit operator
that the design-build entity has the capacity to complete the project.

(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 design-build entity,
and information concerning a contractor member’s workers’
compensation experience history and worker safety program.

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

(G) Any instance where the entity, its owner, officers, or
managing employees defaulted on a construction contract.

(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 Federal Insurance Contribution Act (FICA) withholding
requirements settled against any member of the design-build entity.

(I) Information concerning the bankruptcy or receivership of
any member of the entity, and information concerning all legal
claims, disputes, or lawsuits arising from any construction project
of any member of the entity during the past three years, including
information concerning any work completed by a surety.

(J) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members who will participate as subcontractors in
the design-build contract.

(K) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build entity during the five-year period
immediately 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.

(L) 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 liable for full performance under the design-build
contract.

(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.

(f) The transit operator shall establish a procedure for final
selection of the design-build entity. begin delete Selection shall be subject to
the following conditions: end delete

begin delete

(1) In no case shall the transit operator award a contract to a
design-build entity pursuant to this article for a capital maintenance
or capacity-enhancing rail project unless that project exceeds
twenty-five million dollars ($25,000,000) in cost.

(2) For nonrail transit projects that exceed two million five
hundred thousand dollars ($2,500,000), the transit operator may
award the project to the lowest responsible bidder or by using the
best value method.

(3) For the acquisition and installation of technology applications
or surveillance equipment designed to enhance safety, disaster
preparedness, and homeland security efforts, there shall be no cost
threshold and the transit operator may award the contract to the
lowest responsible bidder or by using the best value method.

end delete

(g) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.

SEC. 3.  

Section 20209.11 of the Public Contract Code is
amended to read:

20209.11.  

begin delete (a) end delete begin delete   end delete The minimum performance criteria and design
standards established pursuant to this article by a transit operator
for quality, durability, longevity, life-cycle costs, and other criteria
deemed appropriate by the transit operator shall be adhered to by
the design-build entity. Any deviations from those standards may
only be allowed by written consent of the transit operator. The
transit operator may retain the services of a design professional
through the course of the project in order to ensure compliance
with this article.

begin delete

(b) The total price of the project shall be subject to the conditions
established in subdivision (f) of Section 20209.7.

end delete

SEC. 4.  

Section 20209.12 of the Public Contract Code is
repealed.

begin delete

20209.12.  

Each transit operator that elects to proceed under
this article and use the design-build method on a public works
project shall prepare and deliver to the Legislative Analyst’s Office
within 120 days of the design-build project being put into operation
or by December 1, 2015, whichever occurs first, a report containing
a description of each public works project financed with public
funds, procured through the design-build process, and completed
on or before November 1, 2015. However, if a project has been
commenced, but not completed on or before November 1, 2015,
the transit operator shall complete a report no later than 120 days
after completion of the project. The report shall include, but not
be limited to, all of the following information:

(a) The type of facility.

(b) The gross square footage of the facility.

(c) The company or contractor who was awarded the project.

(d) The estimated and actual length of time to complete the
project.

(e) The findings established pursuant to Section 20133.

(f) Any Labor Code violations discovered during the course of
construction or following completion of the project, as well as any
fines or penalties assessed.

(g) The estimated and actual project cost.

(h) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protest.

(i) An assessment of the prequalification process and criteria.

(j) An assessment of the impact of retaining 5 percent retention
on the project.

(k) A description of the labor force compliance program and an
assessment of the project impact, where required.

(l) A description of the method used to award the contract. If
best value was the method, the factors used to evaluate the bid
shall be described, including the weighting of each factor and an
assessment of the effectiveness of the methodology.

(m) An assessment of the project impact of “skilled labor force
availability.”

(n) An assessment of the design-build dollar limits on transit
projects. This shall include projects where the transit operator
wanted to use design-build and was precluded by the dollar
limitation. It shall also include projects where the best value
method of awarding contracts was not used, due to dollar
limitations.

(o) An assessment of the most appropriate uses for the
design-build approach.

(p) Any transit operator that elects not to use the authority
granted may also submit a report to the entities named in
accordance with the schedule in this section. This report may
include an analysis of why the authority granted was not used by
the operator.

end delete

SEC. 5.  

Section 20209.14 of the Public Contract Code is
repealed.

begin delete

20209.14.  

This article shall remain in effect only until January
1, 2015, and as of that date is repealed.

end delete

SEC. 6.  

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.