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AB-2184 School facilities: design-build contracts.(2019-2020)

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Date Published: 02/11/2020 09:00 PM
AB2184:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2184


Introduced by Assembly Member O’Donnell

February 11, 2020


An act to amend Sections 17250.25 and 17250.35 of the Education Code, relating to school facilities.


LEGISLATIVE COUNSEL'S DIGEST


AB 2184, as introduced, O’Donnell. School facilities: design-build contracts.
(1) Until January 1, 2025, existing law authorizes a school district, with the approval of the governing board of the school district, to procure design-build contracts for public works projects in excess of $1,000,000, awarding the contract to either the low bid or the best value, as provided. For those projects using best value as a selection method, existing law requires competitive proposals to be evaluated by using only the criteria and selection procedures specifically identified in the request for proposals, and requires the school district, as it deems appropriate, to weigh certain minimum factors, including price of the project.
This bill would authorize a school district, as an alternative to price of the project, to instead weigh as a factor the proposing design-build entity’s design cost, general conditions, overhead, and profit as a component of the project price. The bill would require a contract that is awarded based on the proposing design-build entity’s design cost, general conditions, overhead, and profit as a component of the project price, to be subject to further negotiation and amendment up to the sum of the costs of construction subcontracts awarded, and would require construction subcontracts for the design-build contract to be subject to an open book evaluation by the school district. If the school district determines the sum of the costs of the construction subcontracts exceeds the anticipated value of the project to the school district, or if any individual subcontract is unreasonable, the bill would authorize the school district to require the design-build entity to repeat a certain process in the awarding of construction subcontracts or to cancel the design-build contract with the school district.
(2) Existing law authorizes a governing board of a school district to alter certain existing public project contracts without the formality of securing bids, as provided, if the change does not exceed a specified statutory amount or 10% of the original contract price, whichever is greater. Existing law requires the governing board of a school district to determine the method of payment for construction contracts, including progress payments for completed portions of the work or for materials delivered on the ground or stored subject to the control of the board and unused.
This bill would explicitly apply those provisions to contracts awarded for design-build contracts for public works projects in excess of $1,000,000, as described in (1) above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 17250.25 of the Education Code is amended to read:

17250.25.
 The procurement process for design-build projects shall progress as follows:
(a) (1) The school district shall prepare a set of documents setting forth the scope and estimated price of the project. The documents may include, but are not 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 school district’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 a project. The documents, however, may include operations during a training or transition period, but shall not include long-term operations for a project.
(b) The school district shall prepare and issue a request for qualifications in order to prequalify, or develop a short-list of, the design-build entities whose proposals shall be evaluated for final selection. The request for qualifications shall include, but is not limited to, all of 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 school district to evaluate proposals, the procedure for final selection of the design-build entity, and any other information deemed necessary by the school district to inform interested parties of the contracting opportunity.
(2) Significant factors that the school district 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 school district. In preparing the standard template, the school district may consult with the construction industry, the building trades and surety industry, and other school districts interested in using the authorization provided by this chapter. 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 the 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) (1) A design-build entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the school district 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, in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.
(2) This subdivision shall not apply if any of the following requirements are met:
(A) The school district has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract to use a skilled and trained workforce, and the entity agrees to be bound by that project labor agreement.
(B) The project or contract is being performed under the extension or renewal of a project labor agreement that was entered into by the school district prior to before January 1, 2017.
(C) The entity has entered into a project labor agreement that will bind the entity and all its subcontractors at every tier performing the project or contract to use a skilled and trained workforce.
(3) For purposes of this subdivision, “project labor agreement” has the same meaning as in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.
(d) Based on the documents prepared as described in subdivision (a), the school district shall prepare a request for proposals that invites prequalified or short-listed entities to submit competitive sealed proposals in the manner prescribed by the school district. 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 school district 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 school district to inform interested parties of the contracting opportunity.
(2) Significant factors that the school district 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 school district may reserve the right to request proposal revisions and hold discussions and negotiations with responsive proposers, in which case the school district 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 school district to ensure that any discussions or negotiations are conducted in good faith.
(e) For those projects utilizing using 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 using 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 school district:
(A) Price, unless Unless a stipulated sum is specified. specified, either of the following:
(i) Price of the project.
(ii) The proposing design-build entity’s design cost, general conditions, overhead, and profit as a component of the project price.
(B) Technical design and construction expertise.
(C) Life-cycle costs over 15 or more years.
(2) Pursuant to subdivision (d), the school district may hold discussions or negotiations with responsive proposers using the process articulated in the school district’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 school district to have offered the best value to the public.
(5) Notwithstanding any other provision of law, upon issuance of a contract award, the school district 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. If the contract is awarded based on the proposing design-build entity’s design cost, general conditions, overhead, and profit as a component of the project price, the contract shall be subject to further negotiation and amendment up to the sum of the costs of construction subcontracts awarded pursuant to Section 17250.35.
(6) The statement regarding the school district’s contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.
(g) A contract awarded pursuant to this chapter shall be deemed a construction contract within the meaning of Section 17603, and subject to the requirements of Section 20118.4 of the Public Contract Code.

SEC. 2.

 Section 17250.35 of the Education Code is amended to read:

17250.35.
 (a) The school district, 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 of the Public Contract Code.
(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 school district, 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 of Division 2 of the Public Contract Code.
(c)  If the design-build contract is awarded based on the proposing design-build entity’s design cost, general conditions, overhead, and profit as a component of the project price, the construction subcontracts shall be subject to an open book evaluation by the school district. If the school district determines the sum of the costs of the construction subcontracts exceeds the anticipated value of the project to the school district, or if any individual subcontracts are unreasonable, the school district may require the design-build entity to repeat the process described in subdivision (b) for those subcontracts or cancel the design-build contract with the school district.