Bill Text: CA AB958 | 2009-2010 | Regular Session | Enrolled
Bill Title: Design-build: Metropolitan Water District of Southern
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2010-01-14 - Consideration of Governor's veto stricken from file. [AB958 Detail]
Download: California-2009-AB958-Enrolled.html
BILL NUMBER: AB 958 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 31, 2009
PASSED THE ASSEMBLY SEPTEMBER 2, 2009
AMENDED IN SENATE JULY 7, 2009
AMENDED IN ASSEMBLY APRIL 20, 2009
INTRODUCED BY Assembly Member Eng
FEBRUARY 26, 2009
An act to add and repeal Section 21568 of the Public Contract
Code, relating to public contracts.
LEGISLATIVE COUNSEL'S DIGEST
AB 958, Eng. Design-build: Metropolitan Water District of Southern
California: solar energy systems.
Existing law sets forth requirements for the solicitation and
evaluation of bids and the awarding of contracts by public entities
for the erection, construction, alteration, repair, or improvement of
any public structure, building, road, or other public improvement.
Existing law also authorizes specified state agencies, cities, and
counties to implement alternative procedures for the awarding of
contracts on a design-build basis.
This bill would authorize the Metropolitan Water District of
Southern California to enter into design-build contracts for projects
involving the design, construction, fabrication, and installation of
a solar energy system in excess of $1,000,000, in accordance with
specified provisions. The bill would establish a procedure for
submitting bids that includes a requirement that design-build
entities provide a statement of qualifications submitted to the
district that is verified under oath. Because a verification under
oath is made under penalty of perjury, the bill would, by requiring a
verification, create a new crime and thereby impose a state-mandated
local program. The bill would require the district, if it uses the
design-build method on a project, to submit a report to the
Legislative Analyst's Office, as specified, and would require the
Legislative Analyst's Office to report to the Legislature on the use
of the design-build method on or before January 1, 2015. The bill
would repeal these provisions on January 1, 2016.
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. Section 21568 is added to the Public Contract Code, to
read:
21568. (a) (1) Notwithstanding the requirements of Section 21565,
this section provides an alternative procedure that the district may
utilize in the design, construction, fabrication, and installation
of a solar energy system, including ancillary improvements directly
related to the solar energy system, in excess of one million dollars
($1,000,000).
(2) The district may award a project under this section using
either the lowest responsible bidder or by best value.
(b) (1) It is the intent of the Legislature to enable the district
to utilize cost-effective options for the installation of solar
energy facilities.
(2) It is the intent of the Legislature to provide an alternative
and optional procedure for bidding and building solar construction
projects for the district.
(c) The design-build approach authorized by this section may be
used, but is not limited to use, when it is anticipated that it will
do any of the following:
(1) Reduce project cost.
(2) Expedite project completion.
(3) Provide design features not achievable through the
design-bid-build method.
(d) (1) For contracts awarded prior to the effective date of
either the regulations adopted by the Department of Industrial
Relations pursuant to subdivision (b) of Section 1771.55 of the Labor
Code or the fees established by the department pursuant to paragraph
(2), if the district elects to proceed under this section, the
district shall establish and enforce, for design-build projects, a
labor compliance program containing the requirements outlined in
Section 1771.5 of the Labor Code, or it shall contract with a third
party to operate a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code. This
requirement shall not apply to any project where the district or the
design-build entity has entered into any collective bargaining
agreement or agreements that bind all of the contractors performing
work on the projects.
(2) For contracts awarded on or after the effective date of both
the regulations adopted by the Department of Industrial Relations
pursuant to subdivision (b) of Section 1771.55 of the Labor Code and
the fees established by the department pursuant to this paragraph,
the district shall pay a fee to the department, in an amount that the
department shall establish, and as it may from time to time amend,
sufficient to support the department's costs in ensuring compliance
with and enforcing prevailing wage requirements on the project, and
labor compliance enforcement as set forth in subdivision (b) of
Section 1771.55. All fees collected pursuant to this paragraph 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) The Department of Industrial Relations may waive the fee set
forth in paragraph (2) if the district has previously been granted
approval by the director to initiate and operate a labor compliance
program on its projects and requests to continue to operate that
labor compliance program on its projects in lieu of labor compliance
by the department pursuant to subdivision (b) of Section 1771.55. The
fee shall not be waived for the district if it contracts with a
third party to initiate and enforce labor compliance programs on its
projects.
(e) As used in this section, the following terms have the
following meanings:
(1) "Best value" means a value determined by objectives relative
to price, features, functions, and life-cycle costs.
(2) "Design-build" means a procurement process in which both the
design and construction of a project are procured from a single
entity.
(3) "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.
(4) "Project" means the construction of solar energy installations
at regional or local water facilities including ancillary
improvements directly related to the solar energy system.
(f) Design-build projects shall progress in a four-step process,
as follows:
(1) (A) The district shall prepare a set of documents setting
forth the scope of the project. The documents may include, but are
not limited to, the size, type, and desired design character of the
solar energy system, 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 district's needs. The performance
specifications and any plans shall be prepared by a design
professional who is duly licensed and registered in California.
(B) Any architect or engineer retained by the district to assist
in the development of the project-specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.
(2) (A) Based on the documents prepared pursuant to paragraph (1),
the district shall prepare a request for proposals that invites
interested parties to submit competitive sealed proposals in the
manner prescribed by the district. The request for proposals shall
include, but is not limited to, the following elements:
(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the district to inform interested parties of the
contracting opportunity, including, but not limited to, the
methodology that will be used by the district to evaluate proposals,
and, specifically, if the contract will be awarded to the lowest
responsible bidder.
(ii) Significant factors that the district reasonably expects to
consider in evaluating proposals, including cost or price and all
nonprice-related factors.
(iii) The relative importance of weight assigned to each of the
factors identified in the request for proposals.
(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors, other than cost or price, when
combined are:
(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.
(C) If the district chooses to reserve the right to hold
discussions or negotiations with responsive bidders, it shall so
specify in the request for proposal and shall publish separately, or
incorporate into the request for proposal, applicable rules and
procedures to be observed by the district to ensure that any
discussions or negotiations are conducted in good faith.
(3) (A) The district shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by the
district. In preparing the questionnaire, the district shall consult
with the construction industry, including representatives of the
building trades and surety industry. This questionnaire shall require
information, including, but not limited to, all of the following:
(i) 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 known at the time of bid
submission who will participate in the design-build contract,
including, but not limited to, mechanical subcontractors.
(ii) 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, as well as a financial statement
that assures the district that the design-build entity has the
capacity to complete the project.
(iii) The licenses, registration, and credentials required to
design and construct the project, including information on the
revocation or suspension of any license, credential, or registration.
(iv) 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.
(v) 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 workers' compensation experience history and
worker safety program.
(vi) 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 to be nonresponsive, or were found by an awarding body not to
be a responsible bidder.
(vii) Any instance where the entity, its owners, officers, or
managing employees defaulted on a construction contract.
(viii) 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; 26 U.S.C. Sec. 3101 et
seq.) withholding requirements settled against any member of the
design-build entity.
(ix) Information concerning the bankruptcy or receivership of any
member of the design-build entity, including information concerning
any work completed by a surety.
(x) 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 years preceding
submission of a bid pursuant to this section, in which the claim,
settlement, or judgment exceeds fifty thousand dollars ($50,000).
Information shall also be provided concerning any work completed by a
surety during this period.
(xi) In the case of a partnership or other association that is not
a legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be fully liable for the performance under the design-build
contract.
(B) 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.
(4) The district shall establish a procedure for final selection
of the design-build entity. Selection shall be based on either of the
following criteria:
(A) A competitive bidding process resulting in lump-sum bids by
the prequalified design-build entities. Awards shall be made to the
lowest responsible bidder.
(B) The district may use a design-build competition based upon
best value and other criteria set forth in paragraph (2). The
design-build competition shall include the following elements:
(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors shall
each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record. Each
of these factors shall be weighted equally.
(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous to
the least.
(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.
(iv) Notwithstanding any provision of this code, upon issuance of
a contract award, the district shall publicly announce its award,
identifying the contractor to whom the award is made, along with a
written decision supporting its contract award and stating the basis
of the award. The notice of award shall also include the district's
second and third ranked design-build entities.
(v) For purposes of this paragraph, "skilled labor force
availability" shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the California
Apprenticeship Council, which has graduated apprentices in each of
the preceding five years. This graduation requirement shall not apply
to programs providing apprenticeship training for any craft that has
been deemed by the Department of Labor and the Department of
Industrial Relations to be an apprenticeable craft in the five years
prior to enactment of this act.
(vi) For the purposes of this paragraph, a bidder's "safety record"
shall be deemed "acceptable" if their experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and their average total recordable injury/illness rate and average
lost work rate for the most recent three-year period does not exceed
the applicable statistical standards for its business category, or if
the bidder is a party to an alternative dispute resolution system,
as provided for in Section 3201.5 of the Labor Code.
(g) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services and errors and omissions insurance coverage sufficient to
cover all design and architectural services provided in the contract.
This section does not prohibit a general or engineering contractor
from being designated the lead entity on a design-build entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.
(2) Any payment or performance bond written for the purposes of
this section shall be written using a bond form developed by the
district.
(h) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of paragraph
(3) of subdivision (f) shall be awarded by the design-build entity
in accordance with the design-build process set forth by the district
in the design-build package. All subcontractors bidding on contracts
pursuant to this section shall be afforded the protections contained
in Chapter 4 (commencing with Section 4100) of Part 1. The
design-build entity shall do both of the following:
(1) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the district.
(2) Provide a fixed date and time on which the subcontracted work
will be awarded in accordance with the procedure established pursuant
to this section.
(i) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (f) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the district.
(j) The district may retain the services of a design professional
or construction project manager, or both, throughout the course of
the project in order to ensure compliance with this section.
(k) Contracts awarded pursuant to this section shall be valid
until the project is completed.
(l) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.
(m) Nothing in this section shall affect either of the following:
(1) The restrictions on subcontracting imposed by the district's
merit system, or any memorandum of understanding or operating policy.
(2) The obligation of the district to meet and confer with any
employee organization concerning a matter within the statutory scope
of representation.
(n) Any design-build project procured under this section shall
provide for training of the permanent employees of the district to
maintain and repair the project once completed.
(o) (1) If the district elects to award a project pursuant to this
section, retention proceeds withheld by the district 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.
(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld shall not exceed the percentage specified in the contract
between the district and the design-build entity. If the design-build
entity provides written notice to any subcontractor who 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 district and the design-build entity from any
payment made by the design-build entity to the subcontractor.
(p) (1) The authority for design-build projects contained in this
section is a new and independent authorization and shall not
supersede, limit, or restrict any other statutory design-build
authorization.
(2) Nothing in this section shall be construed to change the
authority of a state department, agency, board, or commission.
(3) The district may use state funds for projects utilizing the
design-build procedure under this section.
(4) Except as provided in this section, nothing in this section
shall be construed to affect the application of any other law.
(q) A district that elects to proceed under this section and uses
the design-build method on a project shall submit to the Legislative
Analyst's Office before December 1, 2014, a report containing a
description of each project procured through the design-build process
that is completed after January 1, 2011, and before November 1,
2014. The report shall include, but shall not be limited to, all of
the following information:
(1) The type of project.
(2) The gross square footage of the project.
(3) The design-build entity that was awarded the project.
(4) The estimated and actual project costs.
(5) 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 protests.
(6) An assessment of the prequalification process and criteria.
(7) An assessment of the effect of retaining 5 percent retention
on the project.
(8) A description of the Labor Force Compliance Program and an
assessment of the project impact, where required.
(9) A description of the method used to award the contract. If the
best value method was used, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor and
an assessment of the effectiveness of the methodology.
(10) An assessment of the project impact of "skilled labor force
availability."
(11) An assessment of the most appropriate uses for the
design-build approach.
(r) A district that elects not to use the authority granted by
this section may submit a report to the Legislative Analyst's Office
explaining why the district elected not to use the design-build
method.
(s) On or before January 1, 2015, the Legislative Analyst's Office
shall report to the Legislature on the use of the design-build
method by the district pursuant to this section, including the
information listed in subdivision (q). The report may include
recommendations for modifying or extending this section.
(t) This section shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.
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.
