Bill Text: CA SB785 | 2013-2014 | Regular Session | Chaptered
Bill Title: Design-build.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2014-09-30 - Chaptered by Secretary of State. Chapter 931, Statutes of 2014. [SB785 Detail]
Download: California-2013-SB785-Chaptered.html
BILL NUMBER: SB 785 CHAPTERED
BILL TEXT
CHAPTER 931
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2014
APPROVED BY GOVERNOR SEPTEMBER 30, 2014
PASSED THE SENATE AUGUST 27, 2014
PASSED THE ASSEMBLY AUGUST 26, 2014
AMENDED IN ASSEMBLY AUGUST 22, 2014
AMENDED IN ASSEMBLY AUGUST 13, 2014
AMENDED IN ASSEMBLY AUGUST 4, 2014
AMENDED IN ASSEMBLY JUNE 17, 2014
AMENDED IN SENATE JANUARY 14, 2014
AMENDED IN SENATE MAY 2, 2013
AMENDED IN SENATE APRIL 23, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senators Wolk and Hill
(Principal coauthor: Assembly Member Levine)
FEBRUARY 22, 2013
An act to repeal Sections 14661 and 14661.1 of the Government
Code, to amend, repeal, and add Section 32132.5 of the Health and
Safety Code, to amend Section 20209.14 of, to add and repeal Article
6 (commencing with Section 10187) of Chapter 1 of Part 2 of Division
2 of, to add and repeal Chapter 4 (commencing with Section 22160) of
Part 3 of Division 2 of, to repeal Sections 20133, 20175.2, 20193,
20301.5, and 20688.6 of, and to repeal Article 22 (commencing with
Section 20360) of Chapter 1 of Part 3 of Division 2 of, the Public
Contract Code, to add Section 37.2 to the San Diego Unified Port
District Act (Chapter 67 of the First Extraordinary Session of the
Statutes of 1962), and to repeal Section 6 of Chapter 2 of the Second
Extraordinary Session of the Statutes of 2009, relating to
design-build.
LEGISLATIVE COUNSEL'S DIGEST
SB 785, Wolk. Design-build.
Existing law authorizes the Department of General Services, the
Department of Corrections and Rehabilitation, and various local
agencies to use the design-build procurement process for specified
public works under different laws. Existing law also authorizes the
formation of special districts, including the Marin Healthcare
District and the San Diego Unified Port District.
This bill would repeal those authorizations, and enact provisions
that would authorize, until January 1, 2025, the Department of
General Services, the Department of Corrections and Rehabilitation,
and those local agencies, as defined, to use the design-build
procurement process for specified public works. The bill would
authorize, until January 1, 2025, the Marin Healthcare District to
use the design-build process when contracting for the construction of
a building and improvements directly related to a hospital or health
facility building at the Marin General Hospital, and would authorize
the San Diego Unified Port District to use the design-build
procurement process for the construction of a building or buildings
and improvements directly related to the construction of a building
or buildings that exceed $1,000,000. The bill would require specified
information to be verified under penalty of perjury. By expanding
the crime of perjury, the bill would impose a state-mandated local
program.
This bill would make legislative findings and declarations as to
the necessity of a special statute for the Marin Healthcare District
and for the San Diego Unified Port District.
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. It is the intent of the Legislature to consolidate
existing design-build statutes and eliminate inconsistencies in
statutory language by adopting authority of general application to
identified agencies and repealing superseded sections.
SEC. 2. Section 14661 of the Government Code is repealed.
SEC. 3. Section 14661.1 of the Government Code is repealed.
SEC. 4. Section 32132.5 of the Health and Safety Code is amended
to read:
32132.5. (a) Notwithstanding Section 32132 or any other law, upon
approval by the board of directors of the Sonoma Valley Health Care
District or the Marin Healthcare District, as applicable, the
design-build procedure described in Chapter 4 (commencing with
Section 22160) of Part 3 of Division 2 of the Public Contract Code
may be used to assign contracts for the construction of a building or
improvements directly related to construction of a hospital or
health facility building at the Sonoma Valley Hospital or the Marin
General Hospital.
(b) For purposes of this section, except where the context
otherwise requires, all references in Chapter 4 (commencing with
Section 22160) of Part 3 of Division 2 of the Public Contract Code to
"local agency" shall mean the Sonoma Valley Health Care District and
the Marin Healthcare District.
(c) A hospital building project utilizing the design-build process
authorized by subdivision (a) shall be reviewed and inspected in
accordance with the standards and requirements of the Alfred E.
Alquist Hospital Facilities Seismic Safety Act of 1983 (Chapter 1
(commencing with Section 129675) of Part 7 of Division 107).
(d) This section shall remain in effect only until January 1,
2025, and as of that date is repealed.
SEC. 5. Section 32132.5 is added to the Health and Safety Code, to
read:
32132.5. (a) Notwithstanding Section 32132 or any other provision
of law, upon approval by the board of directors of the Sonoma Valley
Health Care District, the design-build procedure described in
Chapter 4 (commencing with Section 22160) of Part 3 of Division 2 of
the Public Contract Code may be used to assign contracts for the
construction of a building or improvements directly related to
construction of a hospital or health facility building at the Sonoma
Valley Hospital.
(b) For purposes of this section, all references in Chapter 4
(commencing with Section 22160) of Part 3 of Division 2 of the Public
Contract Code to "county" and "local agency" shall mean the Sonoma
Valley Health Care District and its board of directors.
(c) A hospital building project utilizing the design-build process
authorized by subdivision (a) shall be reviewed and inspected in
accordance with the standards and requirements of the Alfred E.
Alquist Hospital Facilities Seismic Safety Act of 1983 (Chapter 1
(commencing with Section 129675) of Part 7 of Division 107).
(d) This section shall become operative January 1, 2025.
SEC. 6. Article 6 (commencing with Section 10187) is added to
Chapter 1 of Part 2 of Division 2 of the Public Contract Code, to
read:
Article 6. State Agency Design-Build Projects
10187. (a) The Legislature finds and declares that the
design-build method of project delivery, using a best value
procurement methodology, has been authorized for various agencies
that have reported benefits from such projects including reduced
project costs, expedited project completion, and design features that
are not achievable through the traditional design-bid-build method.
(b) It is the intent of the Legislature that the following occur:
(1) This article provides general authorization for certain state
agencies to use design-build for projects, excluding projects on the
state highway system.
(2) This article shall not be deemed to provide a preference for
the design-build method over other procurement methodologies.
10187.5. For purposes of this article, the following definitions
and the definitions in subdivision (a) of Section 13332.19 of the
Government Code shall apply:
(a) "Best value" means a value determined by evaluation of
objective criteria that may include, but not be limited, 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 department 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) "Department" means the Department of General Services and the
Department of Corrections and Rehabilitation.
(d) "Design-build" means a project delivery process in which both
the design and construction of a project are procured from a single
entity.
(e) "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.
(f) "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.
(g) "Director" means, with respect to procurements undertaken by
the Department of General Services, the Director of General Services
or, with respect to procurements undertaken by the Department of
Corrections and Rehabilitation, the secretary of that department.
10188. (a) Notwithstanding any other law, the director, following
notification to the State Public Works Board, may procure
design-build contracts for public works projects in excess of one
million dollars ($1,000,000), awarding the contract using either the
low bid or best value, provided that this article shall not apply to
any projects on the state highway system.
(b) The director 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 department 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 department entering into design-build
contracts authorized under this article.
10190. The director shall notify the State Public Works Board
regarding the method to be used for selecting the design-build
entity, prior to advertising the design-build project.
10191. The procurement process for the design-build projects
shall progress as follows:
(a) (1) The director 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 department'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) The director 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 department to evaluate proposals, the procedure for final
selection of the design-build entity, and any other information
deemed necessary by the director to inform interested parties of the
contracting opportunity.
(2) Significant factors that the department reasonably expects to
consider in evaluating qualifications, including technical design and
construction expertise, and all other nonprice-related factors.
(3) A standard template request for statements of qualifications
prepared by the department. In preparing the standard template, the
department may consult with the construction industry, the building
trades and surety industry, and other agencies 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 director
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
journeypersons 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
journeypersons 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
journeypersons 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
journeypersons 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
journeypersons 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 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 director that the entity and
its subcontractors at every tier will comply with the requirements of
this subdivision and that the entity will provide the director 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 director 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 director shall prepare a request for proposals that invites
prequalified or short-listed entities to submit competitive sealed
proposals in the manner prescribed by the department. 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 department 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 department to inform
interested parties of the contracting opportunity.
(2) Significant factors that the department 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 department
may reserve the right to request proposal revisions and hold
discussions and negotiations with responsive proposers, in which case
the department 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 department 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 department:
(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 department may hold
discussions or negotiations with responsive proposers using the
process articulated in the department'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 director to
have offered the best value to the public.
(5) Notwithstanding any other provision of this code, upon
issuance of a contract award, the director 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 director's contract award,
described in paragraph (5), and the contract file shall provide
sufficient information to satisfy an external audit.
10192. (a) The design-build entity shall provide payment and
performance bonds for the project in the form and in the amount
required by the director, 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 department shall develop a standard form of payment and
performance bond for its design-build projects.
10193. (a) The department, 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 department,
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.
10194. (a) If the department elects to award a project pursuant
to this article, retention proceeds withheld by the department 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 department 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 department and the design-build entity from any
payment made by the design-build entity to the subcontractor.
10195. Nothing in this article affects, expands, alters, or
limits any rights or remedies otherwise available at law.
10196. This article shall remain in effect only until January 1,
2025, and as of that date is repealed.
SEC. 7. Section 20133 of the Public Contract Code is repealed.
SEC. 8. Section 20175.2 of the Public Contract Code is repealed.
SEC. 9. Section 20193 of the Public Contract Code is repealed.
SEC. 10. Section 20209.14 of the Public Contract Code is amended
to read:
20209.14. (a) This article shall remain in effect only until
January 1, 2017, and as of that date is repealed.
(b) This article shall only apply to transit operators that begin
a project solicitation before January 1, 2015. A transit operator
that begins a project solicitation on or after January 1, 2015, is
subject to Chapter 4 (commencing with Section 22610).
SEC. 11. Section 20301.5 of the Public Contract Code is repealed.
SEC. 12. Article 22 (commencing with Section 20360) of Chapter 1
of Part 3 of Division 2 of the Public Contract Code is repealed.
SEC. 13. Section 20688.6 of the Public Contract Code is repealed.
SEC. 14. Chapter 4 (commencing with Section 22160) is added to
Part 3 of Division 2 of the Public Contract Code, to read:
CHAPTER 4. LOCAL AGENCY DESIGN-BUILD PROJECTS
22160. (a) The Legislature finds and declares that the
design-build method of project delivery, using a best value
procurement methodology, has been authorized for various agencies
that have reported benefits from such projects including reduced
project costs, expedited project completion, and design features that
are not achievable through the traditional design-bid-build method.
(b) It is the intent of the Legislature that the following occur:
(1) This chapter provides general authorization for local agencies
to use design-build for projects, excluding projects on the state
highway system.
(2) This chapter shall not be deemed to provide a preference for
the design-build method over other procurement methodologies.
22161. For purposes of this chapter, the following definitions
apply:
(a) "Best value" means a value determined by evaluation of
objective criteria that may include, but not be limited 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) "Local agency" means the following:
(1) A city, county, or city and county.
(2) A special district that operates wastewater facilities, solid
waste management facilities, water recycling facilities, or fire
protection facilities.
(3) 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) (1) For a local agency defined in paragraph (1) of subdivision
(f), "project" means the construction of a building or buildings and
improvements directly related to the construction of a building or
buildings, county sanitation wastewater treatment facilities, and
park and recreational facilities, but does not include the
construction of other infrastructure, including, but not limited to,
streets and highways, public rail transit, or water resources
facilities and infrastructure. For a local agency defined in
paragraph (1) of subdivision (f) that operates wastewater facilities,
solid waste management facilities, or water recycling facilities,
"project" also means the construction of regional and local
wastewater treatment facilities, regional and local solid waste
facilities, or regional and local water recycling facilities.
(2) For a local agency defined in paragraph (2) of subdivision
(f), "project" means the construction of regional and local
wastewater treatment facilities, regional and local solid waste
facilities, regional and local water recycling facilities, or fire
protection facilities.
(3) For a local agency defined in paragraph (3) of subdivision
(f), "project" means a transit capital project that begins a project
solicitation on or after January 1, 2015. A "project," as defined by
this paragraph, that begins the solicitation process before January
1, 2015, is subject to Article 6.8 (commencing with Section 20209.5)
of Chapter 1. "Project," as defined by this paragraph, does not
include state highway construction or local street and road projects.
22162. (a) Except as provided in subdivision (b), and
notwithstanding any other law, a local agency, 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 either the low bid or the best value, provided that this
article shall not apply to any projects on the state highway system.
(b) When a local agency described in paragraph (3) of subdivision
(f) of Section 22161 awards a contract 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 contract
may be awarded to the lowest responsible bidder or by using the best
value method.
(c) The local agency 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 local agency 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 local agency entering into design-build
contracts authorized under this chapter.
22164. 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 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.
(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) The local agency 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 local agency to evaluate proposals, the procedure for final
selection of the design-build entity, 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
and construction expertise, acceptable safety record, 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 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 local
agency 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
journeypersons 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
journeypersons 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
journeypersons 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
journeypersons 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
journeypersons 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 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 the
requirements of 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 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 local agency shall prepare a request for proposals that
invites prequalified or short-listed entities to submit competitive
sealed proposals in the manner prescribed by the local agency. 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 local agency 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 local agency to inform
interested parties of the contracting opportunity.
(2) Significant factors that the local agency 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 local agency
may reserve the right to request proposal revisions and hold
discussions and negotiations with responsive proposers, in which case
the local agency 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 local agency 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 local agency:
(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 local agency may hold
discussions or negotiations with responsive proposers using the
process articulated in the local agency'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 local agency
to have offered the best value to the public.
(5) Notwithstanding any other provision of this code, upon
issuance of a contract award, the local agency 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 local agency's contract award,
described in paragraph (5), and the contract file shall provide
sufficient information to satisfy an external audit.
22165. (a) The design-build entity shall provide payment and
performance bonds for the project in the form and in the amount
required by the local agency, 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 local agency shall develop a standard form of payment and
performance bond for its design-build projects.
22166. (a) The local agency, 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 local agency,
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.
22167. (a) If the local agency elects to award a project pursuant
to this article, retention proceeds withheld by the local agency
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 local agency 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 local agency and the design-build entity from
any payment made by the design-build entity to the subcontractor.
22168. Nothing in this article affects, expands, alters, or
limits any rights or remedies otherwise available at law.
22169. This chapter shall remain in effect only until January 1,
2025, and as of that date is repealed.
SEC. 15. Section 37.2 is added to the San Diego Unified Port
District Act (Chapter 67 of the First Extraordinary Session of the
Statutes of 1962), to read:
Sec. 37.2. (a) Notwithstanding subdivision (a) of Section 37 of
this act or any other law, the district, with approval of the board
of commissioners, may procure design-build contracts for the
construction of a building or buildings and improvements directly
related to the construction of a building or buildings that exceed
one million dollars ($1,000,000) using the design-build procurement
process described in Chapter 4 (commencing with Section 22160) of
Part 3 of Division 2 of the Public Contract Code.
(b) For the purposes of this section, except where the context
otherwise requires, all references in Chapter 4 (commencing with
Section 22160) of Part 3 of Division 2 of the Public Contract Code to
"local agency" shall mean the San Diego Unified Port District.
SEC. 16. Section 6 of Chapter 2 of the Second Extraordinary
Session of the Statutes of 2009, is repealed.
SEC. 17. (a) Due to the unique circumstances of the Marin
Healthcare District, the Legislature hereby finds and declares that a
general statute cannot be made applicable within the meaning of
Section 16 of Article IV of the California Constitution. Therefore,
the special legislation contained in Section 4 of this act is
applicable only to the Marin Healthcare District.
(b) Due to the unique circumstances of, and the potential costs
faced by, the San Diego Unified Port District, the Legislature hereby
finds and declares that a general statute cannot be made applicable
within the meaning of Section 16 of Article IV of the California
Constitution. Therefore, the special legislation contained in Section
15 of this act is applicable only to the San Diego Unified Port
District.
SEC. 18. 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.
