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

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-Enrolled.html

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BILL NUMBER: AB 2551	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 23, 2016
	PASSED THE ASSEMBLY  AUGUST 30, 2016
	AMENDED IN SENATE  AUGUST 19, 2016
	AMENDED IN SENATE  AUGUST 3, 2016
	AMENDED IN SENATE  AUGUST 2, 2016
	AMENDED IN ASSEMBLY  APRIL 27, 2016
	AMENDED IN ASSEMBLY  APRIL 5, 2016

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

                        FEBRUARY 19, 2016

   An act to add 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, Gallagher. 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
manager at-risk, design-build, 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 short-listed unless it provides an enforceable
commitment to the local agency that the entity and its subcontractors
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.


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
start and completion, simplified project controls and accountability,
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
79700) of the Water Code may use, in addition to any other methods of
project delivery otherwise allowable by irrigation districts, county
water districts, or other similar water districts by law, the
following methods of project delivery:
   (1) Construction manager at-risk.
   (2) Design-Build, including conventional, progressive, and target
price.
   (3) 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,
including subcontractors and suppliers, 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-related expertise, 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, comprised of
privately-held entities, 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."Safety record" means the prior
history concerning the safe performance of construction contracts.
The criteria used to evaluate a bidder's safety record shall include,
at a minimum, its experience modification rate for the most recent
three-year period, and its average total recordable injury or illness
rate and average lost work rate for the most recent three-year
period.
   (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 short-listed
unless the entity provides an enforceable commitment to the local
agency that the entity and its subcontractors 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) For work performed on or after January 1, 2017, at least
30 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) For work performed on or after January 1, 2018, at least 40
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.
   (III) For work performed on or after January 1, 2019, at least 50
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.
   (IV) For work performed on or after January 1, 2020, at least 60
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.
   (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) The apprenticeship graduation percentage requirements of
subparagraph (B) of paragraph (1) are satisfied if, in a particular
calendar month, either of the following is true:
   (A) The required percentage of the skilled journeypersons employed
by the contractor or subcontractor to perform work on the contract
or project meet the graduation percentage requirement.
   (B) For the hours of work performed by skilled journeypersons
employed by the contractor or subcontractor on the contract or
project, the percentage of hours performed by skilled journeypersons
who met the graduation requirement meets or exceeds the required
graduation percentage.
   (3) A contractor or subcontractor need not meet the apprenticeship
graduation requirements of subparagraph (B) of paragraph (1) if,
during the calendar month, the contractor or subcontractor employs
skilled journeypersons to perform fewer than 10 hours of work on the
contract or project.
   (4) A subcontractor need not meet the apprenticeship graduation
requirements of subparagraph (B) of paragraph (1) if both of the
following requirements are met:
   (A) The subcontractor was not a listed subcontractor under Section
4104 or a substitute for a listed subcontractor.
   (B) The subcontract does not exceed one-half of 1 percent of the
price of the prime contract.
   (5) (A) A contractor, bidder, or other entity's commitment that a
skilled and trained workforce will be used to perform the project or
contract shall be established by the contractor, bidder, or other
entity's agreement with the local agency that the contractor, bidder,
or other entity and its subcontractors at every tier will comply
with this subdivision and that the contractor, bidder, or other
entity will provide the local agency with a report on a monthly basis
while the project or contract is being performed, as to whether the
contractor, bidder, or other entity and its subcontractors are
complying with the requirements of this subdivision.
   (B) If the contractor, bidder, or other entity fails to provide
the monthly report required by this section, or provides a report
that is incomplete, the local agency shall withhold further payments
until a complete report is provided.
   (C) If a monthly report does not demonstrate compliance with this
chapter, the local agency shall withhold further payments until the
contractor, bidder, or other entity provides a plan to achieve
substantial compliance with this article, with respect to the
relevant apprenticeable occupation, prior to completion of the
contract or project.
   (D) A monthly report provided to the public agency or other
awarding body shall be 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) and shall be open to public
inspection.
   (6) This subdivision shall not apply if the contractor, bidder, or
other entity has entered into a project labor agreement that will
bind itself and all its subcontractors who perform construction work
on the project, and the contractor, bidder, or other entity agrees to
be bound by the project agreement.
   (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 to perform the work being requested, 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, if appropriate for the
delivery method, 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 included, if
applicable to the delivery method and 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) Life-cycle costs over 15 or more years as specified by the
local agency.
   (2) Pursuant to subdivision (e), 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.
   20928.4.  Any project constructed pursuant to this article shall
be subject to Part 1 (commencing with Section 6000) of Division 3 of
the Water Code.
  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.