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AB-603 Public contracts: design-build: Capitol Southeast Connector Project.(2013-2014)

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Amended  IN  Assembly  April 16, 2013
Amended  IN  Assembly  April 04, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 603


Introduced by Assembly Member Cooley

February 20, 2013


An act to amend Sections 6800, 6801, and 6803 of, to add the heading of Article 1 (commencing with Section 6800) to Chapter 6.5 of Part 1 of Division 2 of, to add Article 2 (commencing with Section 6815) to Chapter 6.5 of Part 1 of Division 2 of, and to repeal Section 6813 of, add Chapter 6 (commencing with Section 6970) to Part 1 of Division 2 of the Public Contract Code, relating to design-build, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 603, as amended, Cooley. Public contracts: design-build. design-build: Capitol Southeast Connector Project.
Existing law, until January 1, 2014, authorizes certain state and local transportation entities, if authorized by the California Transportation Commission, to use a design‑build process for contracts on transportation projects, as specified. Existing law establishes a procedure for submitting bids that includes a requirement that design-build entities provide a statement of qualifications submitted to the transportation entity that is verified under oath, subject to penalty of perjury.
This bill would authorize the Capitol Southeast Connector Joint Powers Authority to utilize design-build procurement for the Southeast Connector Project in Sacramento County, subject to authorization by the commission. The bill would require a transportation entity, as defined, awarding a contract for a public works project pursuant to these provisions, to reimburse the Department of Industrial Relations for costs of performing prevailing wage monitoring and enforcement of the public works project and would require moneys collected to be deposited into the State Public Works Enforcement Fund, a continuously appropriated fund. By depositing money in a continuously appropriated fund, the bill would make an appropriation.
This bill would make legislative findings and declarations as to the necessity of a special statute for Sacramento County.
Because the bill would extend the use of design-build procurement to the authority, subject to existing procedures, the bill would, by extension, impose the statement of qualifications requirement upon the authority, subject to penalty of perjury, thereby creating a new crime and imposing a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law provides for a Design-Build Demonstration Program that allows for a local transportation entity to utilize the design-build method of procurement for a specified amount of projects for local and state projects. Existing law defines “local transportation entity” as a designated transportation authority, a consolidated agency, the Santa Clara Valley Transportation Authority, any other local or regional transportation entity that is designated as a regional transportation agency. Existing law subjects both local and state projects to specified procedural requirements to qualify as a design-build project. Existing law repeals these provisions on January 1, 2014.

This bill would include in the definition of a local transportation entity a joint powers authority. This bill would only apply the specified procedural requirements to the state design-build projects. This bill would delete the repeal date. This bill would also authorize the Capital Southeast Connector Joint Powers Authority to use design-build procurement, as specified. This bill makes findings regarding the need for special legislation.

Vote: MAJORITY   Appropriation: NOYES   Fiscal Committee: YES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Chapter 6.7 (commencing with Section 6970) is added to Part 1 of Division 2 of the Public Contract Code, to read:
CHAPTER  6.7. Capitol Southeast Connector Joint Powers Authority Design

6970.
 For purposes of this chapter, the following definitions apply:
(a) “Best value” means a value determined by objective criteria, including, but not limited to, price, features, functions, life cycle costs, and other criteria deemed appropriate by the transportation entity.
(b) “Commission” means the California Transportation Commission.
(c) “Design-build” means a procurement process in which both the design and construction of a project are procured from a single entity.
(d) “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.
(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.
(f) “Transportation entity” means the Capitol Southeast Connector Joint Powers Authority.

6971.
 The Capitol Southeast Connector Joint Powers Authority, if authorized by the commission, may utilize design-build procurement for the Southeast Connector Project in Sacramento County.

6972.
 (a) Not later than the first day of July that occurs two years after a design-build contract is awarded, and each July 1 thereafter until the project is completed, the transportation entity shall submit a report on the progress of the project and compliance with this section to the legislative policy committees having jurisdiction over transportation matters.
(b) The requirement of submitting a report imposed under subdivision (a) is inoperative on the first day of July four years after the first report was submitted, pursuant to Section 10231.5 of the Government Code.
(c) A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.

6973.
 The commission 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 transportation entity 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 transportation entity entering into design-build contracts authorized under this chapter.

6974.
 (a) For contracts for public works projects awarded prior to the effective date of the regulations adopted by the Department of Industrial Relations pursuant to subdivision (g) of Section 1771.5 of the Labor Code, a transportation entity authorized to use the design-build method of procurement shall establish and enforce a labor compliance program containing the requirements outlined in Section 1771.5 of the Labor Code or shall contract with a third party to operate a labor compliance program containing the requirements outlined in Section 1771.5 of the Labor Code. This requirement shall not apply to projects where the transportation entity or design-build entity has entered into any collective bargaining agreement that binds all of the contractors performing work on the projects.
(b) For contracts for public works projects awarded on or after the effective date of the regulations adopted by the Department of Industrial Relations pursuant to subdivision (g) of Section 1771.5 of the Labor Code, the transportation entity shall reimburse the Department of Industrial Relations for its reasonable and directly related costs of performing prevailing wage monitoring and enforcement on public works projects pursuant to rates established by the Department of Industrial Relations as set forth in subdivision (h) of Section 1771.5 of the Labor Code. All moneys collected pursuant to this subdivision shall be deposited in the State Public Works Enforcement Fund, created by Section 1771.3 of the Labor Code, and shall be used only for enforcement of prevailing wage requirements on those projects.
(c) In lieu of reimbursing the Department of Industrial Relations for its reasonable and directly related costs of performing monitoring and enforcement on public works projects, the transportation entity may elect to continue operating an existing previously approved labor compliance program to monitor and enforce prevailing wage requirements on the project if it has either not contracted with a third party to conduct its labor compliance program and requests and receives approval from the department to continue its existing program or it enters into a collective bargaining agreement that binds all of the contractors performing work on the project and that includes a mechanism for resolving disputes about the payment of wages.

6975.
 The procurement process for the design-build project shall progress as follows:
(a) The transportation entity 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, and any other information deemed necessary to describe adequately the transportation entity's needs. The performance specifications and any plans shall be prepared by a design professional who is duly licensed and registered in California.
(b) Based on the documents prepared as described in subdivision (a), the transportation entity shall prepare a request for proposals that invites interested parties to submit competitive sealed proposals in the manner prescribed by the transportation entity. 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 transportation entity to evaluate proposals, whether the contract will be awarded on the basis of the lowest responsible bid or on best value, and any other information deemed necessary by the transportation entity to inform interested parties of the contracting opportunity.
(2) Significant factors that the transportation entity 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) For transportation entities authorized to utilize best value as a selection method, the transportation entity reserves the right to request proposal revisions and hold discussions and negotiations with responsive bidders and shall so specify in the request for proposals and shall publish separately or incorporate into the request for proposals applicable rules and procedures to be observed by the transportation entity to ensure that any discussions or negotiations are conducted in good faith.
(c) Based on the documents prepared under subdivision (a), the transportation entity shall prepare and issue a request for qualifications in order to prequalify 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 transportation entity to evaluate proposals, the procedure for final selection of the design-build entity, and any other information deemed necessary by the transportation entity to inform interested parties of the contracting opportunity.
(2) (A) Significant factors that the transportation entity reasonably expects to consider in evaluating qualifications, including technical design and construction expertise, skilled labor force availability, and all other nonprice-related factors.
(B) For purposes of subparagraph (A), skilled labor force availability shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the California Apprenticeship Council, that has graduated at least one apprentice in each of the preceding five years. This graduation requirement shall not apply to programs providing apprenticeship training for any craft that was first deemed by the Department of Labor and the Department of Industrial Relations to be an apprenticeable craft within the five years prior to the effective date of this article.
(3) A standard form request for statements of qualifications prepared by the transportation entity. In preparing the standard form, the transportation entity may consult with the construction industry, the building trades and surety industry, and other public agencies interested in using the authorization provided by this chapter. The standard form shall require information including, but not limited to, all of the following:
(A) If the design-build entity is a partnership, limited partnership, joint venture, or other association, a listing of all of the partners, general partners, or association members known at the time of statement of qualification submission who will participate in the design-build contract.
(B) Evidence that the members of the design-build entity have completed, or demonstrated the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity, and that proposed key personnel have sufficient experience and training to competently manage and complete the design and construction of the project, and a financial statement that assures the transportation entity 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) A full disclosure regarding all of the following that are applicable:
(i) Any serious or willful violation of 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.
(ii) Any debarment, disqualification, or removal from a federal, state, or local government public works project.
(iii) Any instance where the design-build entity, or 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.
(iv) Any instance where the design-build entity, or its owners, officers, or managing employees defaulted on a construction contract.
(v) Any violations of the Contractors’ State License Law, as described in Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, including alleged violations of federal or state law regarding the payment of wages, benefits, apprenticeship requirements, or personal income tax withholding, or Federal Insurance Contribution Act (FICA) withholding requirements settled against any member of the design-build entity.
(vi) Any bankruptcy or receivership of any member of the design-build entity, including, but not limited to, information concerning any work completed by a surety.
(vii) Any 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 under this article, 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 five-year period.
(G) If the proposed design-build entity is a partnership, limited partnership, joint-venture, or other association, a copy of the organizational documents or agreement committing to form the organization, and a statement that all general partners, joint venture members, or other association members agree to be fully liable for the performance under the design-build contract.
(H) An acceptable safety record. A bidder’s safety record shall be deemed acceptable if its experience modification rate for the most recent three-year period is an average of 1.00 or less, and its average total recordable injury/illness rate and average lost work rate for the most recent three-year period does not exceed the applicable statistical standards for its business category or if the bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.
(4) The information required under this subdivision shall be verified under oath by the design-build entity and its members in the manner in which civil pleadings in civil actions are verified. Information required under this subdivision that is not a public record under the California Public Records Act, as described in Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code, shall not be open to public inspection.
(d) For those projects utilizing low bid as the final selection method, the competitive bidding process shall result in lump-sum bids by the prequalified design-build entities. Awards shall be made to the lowest responsible bidder.
(e) 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. However, the following minimum factors shall be weighted as deemed appropriate by the contracting transportation entity:
(A) Price.
(B) Technical design and construction expertise.
(C) Life-cycle costs over 15 years or more.
(2) Pursuant to subdivision (b), the transportation entity may hold discussions or negotiations with responsive bidders using the process articulated in the transportation entity’s request for proposals.
(3) When the evaluation is complete, the top three responsive bidders shall be ranked sequentially based on a determination of value provided.
(4) The award of the contract shall be made to the responsible bidder whose proposal is determined by the transportation entity to have offered the best value to the public.
(5) Notwithstanding any other provision of this code, upon issuance of a contract award, the transportation entity 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 transportation entity’s second- and third-ranked design-build entities.
(6) The written decision supporting the transportation entity’s contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.

6976.
 (a) The design-build entity shall provide payment and performance bonds for the project in the form and in the amount required by the transportation entity, and issued by a California admitted surety. In no case shall the amount of the payment bond be less than the amount of the performance bond.
(b) The design-build contract shall require errors and omissions insurance coverage for the design element of the project.

6977.
 (a) The transportation entity, 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 of Division 2.
(b) In awarding subcontracts not listed in the request for proposals, the design-build entity shall do all of the following:
(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 transportation entity.
(2) Provide a fixed date and time on which the subcontracted work will be awarded.
(3) Establish reasonable qualification criteria and standards.
(4) Provide that the subcontracted construction work shall be awarded either on a best value basis or to the lowest responsible bidder. For construction work awarded on a best value basis, the design-build entity shall evaluate all bids utilizing the factors described in paragraph (1) of subdivision (e) of Section 6824, and shall award the contract to the bidder determined by the design-build entity to have offered the best value.
(c) Subcontractors awarded subcontracts under this chapter shall be afforded all the protections of Chapter 4 (commencing with Section 4100) of Part 1 of Division 2.

6978.
 This chapter shall not be construed to affect, expand, alter, or limit any right or remedy otherwise available at law.

6979.
 The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 2.

 The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique need to build and improve a connecting roadway for the Cities of Elk Grove, Folsom, and Rancho Cordova, and El Dorado and Sacramento Counties in a cost-effective manner.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
SECTION 1.The heading of Article 1 (commencing with Section 6800) is added to Chapter 6.5 of Part 1 of Division 2 of the Public Contract Code, to read:
1.General
SEC. 2.Section 6800 of the Public Contract Code is amended to read:
6800.

The Legislature hereby finds and declares all of the following:

(a)The design-build method of procurement authorized under this chapter should be evaluated for the purposes of exploring whether the potential exists for reduced project costs, expedited project completion, or design features that are not achievable through the traditional design-bid-build method. This chapter shall not be deemed to provide a preference for the design-build method over other procurement methodologies.

(b)The Design-Build Demonstration Program allows for a careful examination of the benefits and challenges of the design-build contracting method on a limited number of projects.

(c)This article offers specified local agencies the opportunity to seek approval by the commission for the utilization of the design-build contracting method for up to five projects. According to the 2012 annual report to the Legislature submitted by the commission, none of the five available local projects have been utilized for the design-build procurement method by local entities.

(d)For the Legislature to fully understand the potential that the design-build contracting method presents through this Design-Build Demonstration Program, it is appropriate to expand the definition of a local transportation entity.

SEC. 3.Section 6801 of the Public Contract Code is amended to read:
6801.

For purposes of this chapter, the following definitions apply:

(a)“Best value” means a value determined by objective criteria, including, but not limited to, price, features, functions, life-cycle costs, and other criteria deemed appropriate by the transportation entity.

(b)“Commission” means the California Transportation Commission.

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

(d)“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.

(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.

(f)“Department” means the Department of Transportation as established under Part 5 (commencing with Section 14000) of Division 3 of Title 2 of the Government Code.

(g)“Local transportation entity” means a transportation authority designated pursuant to Division 19 (commencing with Section 180000) of the Public Utilities Code, a consolidated agency created pursuant to Chapter 3 (commencing with Section 132350) of Division 12.7 of the Public Utilities Code, the Santa Clara Valley Transportation Authority established under Part 12 (commencing with Section 100000) of Division 10 of the Public Utilities Code, any other local or regional transportation entity that is designated by statute as a regional transportation agency, and a joint powers authority formed pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code, with the consent of a transportation planning agency or a county transportation commission for the jurisdiction in which the transportation project will be developed.

(h)“Transportation entity” means the department or a local transportation entity.

SEC. 4.Section 6803 of the Public Contract Code is amended to read:
6803.

(a)Only 15 design-build projects shall be authorized under this chapter. The projects selected shall vary in size, type, and geographical location.

(b)The commission shall determine whether a transportation entity may award a design-build contract based on lowest responsible bid or best value. The commission shall balance the number of transportation entities that may use the low bid and best value selection methods in order to ensure that the number of design-build contracts awarded will enable the commission to determine the costs and benefits of using each method.

(c)In order to be eligible for consideration as one of the 10 design-build projects authorized under subdivision (b) of Section 6802, the proposed project shall be subject to the existing process under the state transportation improvement program (Chapter 2 (commencing with Section 14520) of Part 5.3 of Division 3 of Title 2 of the Government Code), the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (Chapter 12.49 (commencing with Section 8879.20) of Division 1 of Title 2 of the Government Code), the traffic congestion relief program (Chapter 4.5 (commencing with Section 14556) of Part 5.3 of Division 3 of Title 2 of the Government Code), or the state highway operations and protection program established pursuant to Section 14526.5 of the Government Code.

(d)The commission shall establish a peer review committee to conduct an evaluation of the 15 projects selected to utilize the design-build method of procurement.

(e)The commission 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 transportation entity 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 transportation entity entering into design-build contracts authorized under this chapter.

SEC. 5.Section 6813 of the Public Contract Code is repealed.
SEC. 6.Article 2 (commencing with Section 6815) is added to Chapter 6.5 of Part 1 of Division 2 of the Public Contract Code, to read:
2.Capital Southeast Connector Joint Powers Authority
6815.

The Capital Southeast Connector Joint Powers Authority may use the design-build method of procurement for transportation projects, subject to the requirements for utilizing that method pursuant to Article 1 (commencing with Section 6800). However, Sections 6802 and 6803 shall not apply to contracts let by the Capital Southeast Connector Joint Powers Authority when using the design-build method of procurement.

SEC. 7.

The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique need to build and improve a connecting roadway for the Cities of Elk Grove, Folsom, and Rancho Cordova, and El Dorado and Sacramento Counties in a cost-effective manner.