Bill Text: CA AB2551 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Contract procurement: surface storage projects.

Spectrum: Moderate Partisan Bill (Republican 5-1)

Status: (Passed) 2016-09-28 - Chaptered by Secretary of State - Chapter 760, Statutes of 2016. [AB2551 Detail]

Download: California-2015-AB2551-Amended.html

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BILL NUMBER: AB 2551	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 5, 2016

INTRODUCED BY   Assembly Members  Gallagher 
   and Olsen   Gallagher, 
 Olsen,   and Salas 
   (Principal coauthor: Senator Nielsen)

                        FEBRUARY 19, 2016

   An act to add  Section 79714.5 to the Water Code,
   Article 60.6 (commencing with Section 20928) to
Chapter 1 of Part 3 of Division 2 of the Public Contract Code, 
relating to water.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2551, as amended, Gallagher.  Surface storage:
design-build contracts.   Contract procurement: surface
storage projects.  
   The Local Agency Public Construction Act establishes procedures
and requirements for contracting by local agencies for the
construction of public works, including the requirement to award the
contract to the lowest responsible bidder. Existing law governing
specified water districts requires those districts to use competitive
bidding and to award the contract to the lowest responsible bidder.
 
   This bill would allow a local agency to use the construction
management at-risk, design-build, public-private partnership, or
design-build-operate method of delivery on a surface storage project,
as described. The bill would require these contracts to be awarded
on a best value basis or to the lowest responsible bidder, and
establish a procurement process for these contracts. The bill would
require the bidder to certify specified information under penalty of
perjury. By expanding the crime of perjury, the bill would impose a
state-mandated local program. The bill would also prohibit a
contracting entity from being prequalified or shortlisted unless it
provides an enforceable commitment to the local agency that the
entity and its subcontractors who will be doing construction on the
project 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, as specified.
 
   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.  
   Existing law, the Water Quality, Supply, and Infrastructure
Improvement Act of 2014, approved by the voters as Proposition 1 at
the November 4, 2014, statewide general election, authorizes the
issuance of general obligation bonds in the amount of $7,545,000,000
to finance a water quality, supply, and infrastructure improvement
program. The bond act provides that the sum of $2,700,000,000 is
continuously appropriated from the fund to the California Water
Commission for public benefits associated with water storage projects
that improve the operation of the state water system, are cost
effective, and provide a net improvement in ecosystem and water
quality conditions.  
   This bill would authorize certain surface storage projects that
receive Proposition 1 funding to use the design-build method of
project delivery. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Article 60.6 (commencing with Section
20928) is added to Chapter 1 of Part 3 of Division 2 of the 
 Public Contract Code   , to read: 

      Article  60.6.    Surface Storage Projects 


   20928.  The Legislature finds and declares that alternative
project delivery, using the best value procurement methodology, has
been authorized for various agencies that have reported benefits from
those projects, including reduced project costs, expedited project
completion, and design features that are not achievable through the
traditional design-bid-build method.  
   20928.1.  (a) A surface storage project identified in the CALFED
Bay-Delta Program Record of Decision, dated August 28, 2000, that
receives funding pursuant to Division 26.7 (commencing with Section
79703) of the Water Code may use the following methods of project
delivery:
   (1) Construction management at-risk.
   (2) Design-build.
   (3) Public-private partnership.
   (4) Design-build-operate.
   (b) The contract shall be awarded on a best value basis or to the
lowest responsible bidder.  
   20928.2.  The procurement process for the project shall progress
as follows:
   (a) 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 local agency's needs. The performance
specifications and any plans shall be prepared by a design
professional who is duly licensed and registered in California.
   (b) The local agency shall prepare and issue a request for
qualifications in order to prequalify or short-list the entities
whose bids 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 local agency to evaluate bids, the procedure for final
selection of the bidder, and any other information deemed necessary
by the local agency to inform interested parties of the contracting
opportunity.
   (2) Significant factors that the local agency reasonably expects
to consider in evaluating qualifications, including technical design,
construction expertise, acceptable safety records, and all other
nonprice-related factors.
   (3) A standard template request for statements of qualifications
prepared by the local agency. In preparing the standard template, the
local agency may consult with the construction industry, the
building trades and surety industry, and other local agencies
interested in using the authorization provided by this article. The
template shall require all of the following information:
   (A) If the bidder 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 contracting 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 project, and a
financial statement that ensures that the bidder has the capacity to
complete the project.
   (C) The licenses, registration, and credentials required for 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 bidder 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) An acceptable safety record. A bidder'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
bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.
   (4) The information required under this subdivision shall be
certified under penalty of perjury by the bidder and its general
partners or joint venture members.
   (c) A contracting entity shall not be prequalified or shortlisted
unless the entity provides an enforceable commitment to the local
agency that the entity and its subcontractors who will be doing
construction on the project 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 in
effect at the time the request for qualifications is issued.
   (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) At the start of construction, at least 20 percent of the
skilled journeypersons employed to perform work on the contract or
project by the bidder 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) By the second year of construction, and every year
thereafter, the workforce requirements of subclause (I) shall
increase by 10 percent until at least 50 percent of skilled
journeypersons employed to perform work on the contract or project by
the bidder 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 requirements 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 journeyperson" 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 local agency that the entity
and its subcontractors at every tier will comply with this
subdivision and that the entity will provide the local agency 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 local agency 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 or equivalent document that includes the requirements of
this subdivision and that will bind the bidder and all its
subcontractors who performed construction work on the project.
   (d) The local agency shall make the list of prequalified entities
available to the public.
   (e) Based on the documents prepared as described in subdivision
(a), the local agency shall prepare a request for bids that invites
prequalified or short-listed entities to submit competitive sealed
bids in the manner prescribed by the local agency. The request for
bids shall include, but need not be limited to, all of 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 local agency to evaluate bids, whether the
contract will be awarded on the basis of best value or to the lowest
responsible bidder, and any other information deemed necessary by the
local agency to inform interested parties of the contracting
opportunity.
   (2) Significant factors that the local agency reasonably expects
to consider in evaluating bids, 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 bids.
   (4) If a best value selection method is used, the local agency may
reserve the right to request bid revisions and hold discussions and
negotiations with responsive bidders, in which case the local agency
shall so specify in the request for bids and shall publish separately
or incorporate into the request for bids applicable procedures to be
observed by the local agency to ensure that any discussions or
negotiations are conducted in good faith.
   (f) 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 entities, and awards shall be
made to the bidder that is the lowest responsible bidder.
   (g) For those projects utilizing best value as a selection method,
the competition shall progress as follows:
   (1) Competitive bids shall be evaluated by using only the criteria
and selection procedures specifically identified in the request for
bids. The following minimum factors, however, shall be weighted as
deemed appropriate by the local agency:
   (A) Price, unless a stipulated sum is specified and including
financial and bonding capacity requirements.
   (B) Technical design, procurement, and construction expertise.
   (C) Proposed construction approach, sequencing, and methods.
   (D) Compliance with the requirements of the owner-provided
performance specification.
   (E) Ability to meet the milestone schedule dates and, if
applicable, any liquidated damages.
   (F) Ability to meet the quality requirements.
   (G) Proposed risk allocation and sharing.
   (H) Safety record.
   (I) Warranty.
   (J) Lifecycle costs over 15 or more years as specified by the
local agency.
   (2) Pursuant to subdivision (d), the local agency may hold
discussions or negotiations with responsive bidders using the process
articulated in the local agency's request for bids.
   (3) When the evaluation is complete, the responsive bidders shall
be ranked based on a determination of value provided by the local
agency if no more than three bidders are required to be ranked.
   (4) The award of the contract shall be made to the responsible
bidder whose bid is determined by the local agency to have offered
the best value to the public.
   (5) Notwithstanding any provision of the Water Code, upon issuance
of a contract award the local agency shall publicly announce its
award, identifying the bidder to which the award is made, along with
a statement regarding the basis of the award.
   (6) The statement regarding the local agency's contract award,
described in paragraph (5), and the contract file shall provide
sufficient information to satisfy an external audit.  
   20928.3.  (a) The local agency, in each request for proposals, may
identify specific types of subcontractors that must be included in
the entity statement of qualifications and proposal.
   (b) Following award of the contract, the 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 local agency,
including a fixed date and time on which qualification 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. 
   SEC. 2.   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.  
  SECTION 1.   Section 79714.5 is added to the Water
Code, to read:
   79714.5.  A surface storage project identified in the CALFED
Bay-Delta Program Record of Decision, dated August 28, 2000, that
receives funding pursuant to this division may use the design-build
method of project delivery.