Amended in Assembly August 7, 2014

Senate Bill No. 1433

Introduced by Senator Hill

February 21, 2014

An act to amend Sections 20209.5, 20209.7, begin delete and 20209.11 of, and to repeal Sections 20209.12 and 20209.14 of, end delete begin insert 20209.11, and 20209.14 of, to add and repeal Article 6.9 (commencing with Section 20209.15) of Chapter 1 of Part 3 of Division 2 of, and to repeal Section 20209.12 of, end insert the Public Contract Code, relating to transit contracts, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 1433, as amended, 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 begin delete delete the repeal date, thus extending the operation of these provisions indefinitely end delete begin insert provide that these provisions apply to project solicitations that commenced prior to January 1, 2015, and would extend the repeal date to January 1, 2017. These bill would, for project solicitations that commence on or after January 1, 2015, establish conditions for a “transit operator end insert begin insert , end insert begin insert ” as defined, to select a design-build entity for a design-build project, and would repeal these provisions on January 1, 2024 end insert .

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, transit
development board, a consolidated agency as described in Section
132353.1 of the Public Utilities Code, any joint powers authority
formed to provide transit service, 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.

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 offerers, 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.

(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.  

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.

SEC. 4.  

Section 20209.12 of the Public Contract Code is
repealed.

begin delete

SEC. 5.  

Section 20209.14 of the Public Contract Code is
repealed.

end delete

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 20209.14 of the end insert begin insert Public Contract Code end insert begin insert is
amended to read: end insert

20209.14.  

begin insert (a) end insert begin insert   end insert This article shall remain in effect only until
January 1, begin delete 2015 end delete begin insert 2017 end insert , and as of that date is repealed.

begin insert

(b) This article shall only apply to transit operators that begin
a project solicitation before January 1, 2015. A transit operator
that begins project solicitation on or after January 1, 2015, is
subject to Article 6.9 (commencing with Section 20209.15).

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Article 6.9 (commencing with Section 20209.15) is
added to Chapter 1 of Part 3 of Division 2 of the end insert begin insert Public Contract
Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 6.9. end insert   Transit Design-Build Projects

 

begin insert 20209.15. end insert   

This article shall only apply to transit operators that
begin a project solicitation on or after January 1, 2015. A transit
operator that begins project solicitation before January 1, 2015,
is subject to Article 6.8 (commencing with Section 20209.5).

begin insert 20209.16. end insert   

For purposes of this article, the following definitions
apply:

(a) “Best value” means a value determined by evaluation of
objective criteria related to price, features, functions, life-cycle
costs, experience, and past performance. A best value
determination may involve the selection of the lowest cost proposal
meeting the interests of the local agency and meeting the objectives
of the project, selection of the best proposal for a stipulated sum
established by the procuring agency, or a tradeoff between price
and other specified factors.

(b) “Construction subcontract” means each subcontract
awarded by the design-build entity to a subcontractor that will
perform work or labor or render service to the design-build entity
in or about the construction of the work or improvement, or a
subcontractor licensed by the State of California that, under
subcontract to the design-build entity, specially fabricates and
installs a portion of the work or improvement according to detailed
drawings contained in the plans and specifications produced by
the design-build team.

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

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

(e) “Design-build team” means the design-build entity itself
and the individuals and other entities identified by the design-build
entity as members of its team. Members shall include the general
contractor and, if utilized in the design of the project, all electrical,
mechanical, and plumbing contractors.

(f) “Transit operator” means any transit district, included
transit district, municipal operator, included municipal operator,
any consolidated agency, as described in Section 132353.1 of the
Public Utilities Code, any joint powers authority formed to provide
transit service, any county transportation commission created
pursuant to Section 130050 of the Public Utilities Code, or any
other local or regional agency, responsible for the construction
of transit projects.

(g) “Project” means a transit capital project, but does not
include state highway construction or local street and road
projects.

begin insert 20209.17. end insert   

(a) Except as provided in subdivision (b), and
notwithstanding any other law, a transit operator, with approval
of its governing body, may procure design-build contracts for
public works projects in excess of one million dollars ($1,000,000),
awarding the contract to either the low bid or the best value,
provided that this article shall not apply to any projects on the
state highway system.

(b) 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.

(c) The transit operator shall develop guidelines for a standard
organizational conflict-of-interest policy, consistent with applicable
law, regarding the ability of a person or entity, that performs
services for the transit operator relating to the solicitation of a
design-build project, to submit a proposal as a design-build entity,
or to join a design-build team. This conflict-of-interest policy shall
apply to each transit operator entering into design-build contracts
authorized under this article.

begin insert 20209.18. end insert   

The procurement process for the design-build
projects shall progress as follows:

(a) (1) The local agency shall prepare a set of documents setting
forth the scope and estimated price of the project. The documents
may include, but need not be limited to, the size, type, and desired
design character of the project, performance specifications
covering the quality of materials, equipment, 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 who is duly licensed and
registered in California.

(2) The documents shall not include a design-build-operate
contract for any project. The documents, however, may include
operations during a training or transition period but shall not
include long-term operations for any project.

(b) Based on the documents prepared under subdivision (a),
the transit operator shall prepare and issue a request for
qualifications in order to prequalify or short-list the design-build
entities whose proposals shall be evaluated for final selection. The
request for qualifications shall include, but need not be limited to,
the following elements:

(1) Identification of the basic scope and needs of the project or
contract, the expected cost range, the methodology that will be
used by the transit operator to evaluate proposals, the procedure
for final selection of the design-build entity, and any other
information deemed necessary by the transit operator to inform
interested parties of the contracting opportunity.

(2) Significant factors that the transit operator reasonably
expects to consider in evaluating qualifications, including technical
design and construction expertise, acceptable safety record, and
all other nonprice-related factors.

(3) A standard template request for statements of qualifications
prepared by the transit operator. In preparing the standard
template, the transit operator may consult with the construction
industry, the building trades and surety industry, and other transit
operators interested in using the authorization provided by this
article. The template shall require the following information:

(A) If the design-build entity is a privately held corporation,
limited liability company, partnership, or joint venture, a listing
of all of the shareholders, partners, or members known at the time
of statement of qualification submission who will perform work
on the project.

(B) Evidence that the members of the design-build team 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, and a financial statement
that ensures that the design-build entity has the capacity to
complete the project.

(C) The licenses, registration, and credentials required to design
and construct the project, including, but not limited to, 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.

(E) Information concerning workers’ compensation experience
history and a worker safety program.

(F) If the proposed design-build entity is a corporation, limited
liability company, partnership, joint venture, or other legal entity,
a copy of the organizational documents or agreement committing
to form the organization.

(G) An acceptable safety record. A proposer’s safety record
shall be deemed acceptable if its experience modification rate for
the most recent three-year period is an average of 1.00 or less,
and its average total recordable injury or 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
the proposer is a party to an alternative dispute resolution system
as provided for in Section 3201.5 of the Labor Code.

(4) (A) The information required under this subdivision shall
be certified under penalty of perjury by the design-build entity and
its general partners or joint venture members.

(B) Information required under this subdivision that is not
otherwise a public record under 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.

(c) A design-build entity shall not be prequalified or shortlisted
unless the entity provides an enforceable commitment to the transit
operator that the entity and its subcontractors at every tier will
use a skilled and trained workforce to perform all work on the
project or contract that falls within an apprenticeable occupation
in the building and construction trades.

(1) For purposes of this subdivision:

(A) “Apprenticeable occupation” means an occupation for
which the chief had approved an apprenticeship program pursuant
to Section 3075 of the Labor Code prior to January 1, 2014.

(B) “Skilled and trained workforce” means a workforce that
meets all of the following conditions:

(i) All the workers are either skilled journeypersons or
apprentices registered in an apprenticeship program approved by
the Chief of the Division of Apprenticeship Standards.

(ii) (I) As of January 1, 2016, at least 20 percent of the skilled
journey persons employed to perform work on the contract or
project by the entity and each of its subcontractors at every tier
are graduates of an apprenticeship program for the applicable
occupation that was either approved by the Chief of the Division
of Apprenticeship Standards pursuant to Section 3075 of the Labor
Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by
the federal Secretary of Labor.

(II) As of January 1, 2017, at least 30 percent of the skilled
journey persons employed to perform work on the contract or
project by the entity and each of its subcontractors at every tier
are graduates of an apprenticeship program for the applicable
occupation that was either approved by the Chief of the Division
of Apprenticeship Standards pursuant to Section 3075 of the Labor
Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by
the federal Secretary of Labor.

(III) As of January 1, 2018, at least 40 percent of the skilled
journey persons employed to perform work on the contract or
project by the entity and each of its subcontractors at every tier
are graduates of an apprenticeship program for the applicable
occupation that was either approved by the Chief of the Division
of Apprenticeship Standards pursuant to Section 3075 of the Labor
Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by
the federal Secretary of Labor.

(IV) As of January 1, 2019, at least 50 percent of the skilled
journey persons employed to perform work on the contract or
project by the entity and each of its subcontractors at every tier
are graduates of an apprenticeship program for the applicable
occupation that was either approved by the Chief of the Division
of Apprenticeship Standards pursuant to Section 3075 of the Labor
Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by
the federal Secretary of Labor.

(V) As of January 1, 2020, at least 60 percent of the skilled
journey persons employed to perform work on the contract or
project by the entity and each of its subcontractors at every tier
are graduates of an apprenticeship program for the applicable
occupation that was either approved by the Chief of the Division
of Apprenticeship Standards pursuant to Section 3075 of the Labor
Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by
the federal Secretary of Labor.

(iii) For an apprenticeable occupation in which no
apprenticeship program had been approved by the chief prior to
January 1, 1995, up to one-half of the graduation percentage
requirement in subclause (I) of clause (ii) may be satisfied by
skilled journeypersons who commenced working in the
apprenticeable occupation prior to the chief’s approval of an
apprenticeship program for that occupation in the county in which
the project is located.

(C) “Skilled journey person” means a worker who either:

(i) Graduated from an apprenticeship program for the
applicable occupation that was approved by the chief or located
outside California and approved for federal purposes pursuant to
the apprenticeship regulations adopted by the federal Secretary
of Labor.

(ii) Has at least as many hours of on-the-job experience in the
applicable occupation as would be required to graduate from an
apprenticeship program for the applicable occupation that is
approved by the chief.

(2) An entity’s commitment that a skilled and trained workforce
will be used to perform the project or contract may be established
by any of the following:

(A) The entity’s agreement with the transit operator that the
entity and its subcontractors at every tier will comply with the
requirements of this subdivision and that the entity will provide
the transit operator with evidence, on a monthly basis while the
project or contract is being performed, that the entity and its
subcontractors are complying with the requirements of this
subdivision.

(B) If the transit operator has entered into a project labor
agreement that will bind all contractors and subcontractors
performing work on the project or contract and that includes the
requirements of this subdivision, the entity’s agreement that it will
become a party to that project labor agreement.

(C) Evidence that the entity has entered into a project labor
agreement that includes the requirements of this subdivision and
that will bind the entity and all its subcontractors at every tier
performing the project or contract.

(d) Based on the documents prepared as described in subdivision
(a), the transit operator shall prepare a request for proposals that
invites prequalified or short-listed entities to submit competitive
sealed proposals in the manner prescribed by the transit operator.
The request for proposals shall include, but need not be limited
to, the following elements:

(1) Identification of the basic scope and needs of the project or
contract, the estimated cost of the project, the methodology that
will be used by the transit operator to evaluate proposals, whether
the contract will be awarded on the basis of low bid or best value,
and any other information deemed necessary by the transit
operator to inform interested parties of the contracting opportunity.

(2) Significant factors that the transit operator reasonably
expects to consider in evaluating proposals, including, but not
limited to, cost or price and all nonprice-related factors.

(3) The relative importance or the weight assigned to each of
the factors identified in the request for proposals.

(4) Where a best value selection method is used, the transit
operator may reserve the right to request proposal revisions and
hold discussions and negotiations with responsive proposers, in
which case the transit operator shall so specify in the request for
proposals and shall publish separately or incorporate into the
request for proposals applicable procedures to be observed by the
transit operator to ensure that any discussions or negotiations are
conducted in good faith.

(e) For those projects utilizing low bid as the final selection
method, the competitive bidding process shall result in lump-sum
bids by the prequalified or short-listed design-build entities, and
awards shall be made to the design-build entity that is the lowest
responsible bidder.

(f) For those projects utilizing best value as a selection method,
the design-build competition shall progress as follows:

(1) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposals. The following minimum factors, however,
shall be weighted as deemed appropriate by the transit operator:

(A) Price, unless a stipulated sum is specified .

(B) Technical design and construction expertise.

(C) Life-cycle costs over 15 or more years.

(2) Pursuant to subdivision (d), the transit operator may hold
discussions or negotiations with responsive proposers using the
process articulated in the transit operator’s request for proposals.

(3) When the evaluation is complete, the responsive proposers
shall be ranked based on a determination of value provided,
provided that no more than three proposers are required to be
ranked.

(4) The award of the contract shall be made to the responsible
design-build entity whose proposal is determined by the transit
operator to have offered the best value to the public.

(5) Notwithstanding any other provision of this code, upon
issuance of a contract award, the transit operator shall publicly
announce its award, identifying the design-build entity to which
the award is made, along with a statement regarding the basis of
the award.

(6) The statement regarding the transit operator’s contract
award, described in paragraph (5), and the contract file shall
provide sufficient information to satisfy an external audit.

begin insert 20209.19. end insert   

(a) The design-build entity shall provide payment
and performance bonds for the project in the form and in the
amount required by the transit operator, and issued by a California
admitted surety. The amount of the payment bond shall not be less
than the amount of the performance bond.

(b) The design-build contract shall require errors and omissions
insurance coverage for the design elements of the project.

(c) The transit operator shall develop a standard form of
payment and performance bond for its design-build projects.

begin insert 20209.20. end insert   

(a) The transit operator, in each design-build
request for proposals, may identify specific types of subcontractors
that must be included in the design-build entity statement of
qualifications and proposal. All construction subcontractors that
are identified in the proposal shall be afforded all the protections
of Chapter 4 (commencing with Section 4100) of Part 1.

(b) Following award of the design-build contract, the
design-build entity shall proceed as follows in awarding
construction subcontracts with a value exceeding one-half of 1
percent of the contract price allocable to construction work:

(1) Provide public notice of availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the transit
operator, including a fixed date and time on which qualifications
statements, bids, or proposals will be due.

(2) Establish reasonable qualification criteria and standards.

(3) Award the subcontract either on a best value basis or to the
lowest responsible bidder. The process may include
prequalification or short-listing. The foregoing process does not
apply to construction subcontractors listed in the original proposal.
Subcontractors awarded construction subcontracts under this
subdivision shall be afforded all the protections of Chapter 4
(commencing with Section 4100) of Part 1.

begin insert 20209.21. end insert   

(a) If the transit operator elects to award a project
pursuant to this article, retention proceeds withheld by the transit
operator from the design-build entity shall not exceed 5 percent
if a performance and payment bond, issued by an admitted surety
insurer, is required in the solicitation of bids.

(b) In a contract between the design-build entity and a
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the transit operator and the design-build entity. If the
design-build entity provides written notice to any subcontractor
that is not a member of the design-build entity, prior to or at the
time the bid is requested, that a bond may be required and the
subcontractor subsequently is unable or refuses to furnish a bond
to the design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the transit operator and the design-build entity
from any payment made by the design-build entity to the
subcontractor.

begin insert 20209.22. end insert   

Nothing in this article affects, expands, alters, or
limits any rights or remedies otherwise available at law.

begin insert 20209.23. end insert   

This article shall remain in effect only until January
1, 2024, and as of that date is repealed.

end insert

begin delete SEC. 6. end delete
begin insert SEC. 7. end 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.