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SB-793 Competitive bidding: design-build and best value construction contracting.(2017-2018)

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Date Published: 10/09/2017 09:00 PM
SB793:v95#DOCUMENT

Senate Bill No. 793
CHAPTER 627

An act to add and repeal Section 32132.95 of the Health and Safety Code, to amend Sections 20155 and 20155.1 of the Public Contract Code, and to add and repeal Sections 5580 and 35160 of the Public Resources Code, relating to public contracts.

[ Approved by Governor  October 09, 2017. Filed with Secretary of State  October 09, 2017. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 793, Hill. Competitive bidding: design-build and best value construction contracting.
(1) Existing law establishes procedures for the formation of health care districts and regional open-space districts or authorities and prescribes the powers, functions, and duties of those districts or authorities, including competitive bidding requirements relating to the construction of facilities or other buildings.
Existing law authorizes certain types of local agencies and other entities to use the design-build process when contracting for the construction of a building or improvements directly related to construction of certain facilities or buildings in those entities’ jurisdictions, as specified. Existing law sets forth the procurement process for design-build projects, as specified, and requires specified information submitted by design-build entities to be certified under penalty of perjury.
This bill would authorize, until January 1, 2023, the Peninsula Health Care District, the Midpeninsula Regional Open Space District, and the Santa Clara Valley Open-Space Authority to use the design-build process for the construction of facilities or other buildings in those entities, as specified. Because the bill would expand the application of the procurement process to additional design-build entities, the bill would expand the crime of perjury, thereby imposing a state-mandated local program.
(2) Existing law, except as specified, authorizes a local agency, with approval of its governing body, to procure design-build contracts for public works projects in excess of $1,000,000, awarding the contract either the low bid or the best value, provided that those provisions do not apply to any projects on the state highway system.
This bill would exempt the Midpeninsula Regional Open Space District and the Santa Clara Valley Open-Space Authority from the minimum project limitation of $1,000,000.
This bill would make legislative findings and declarations as to the necessity of a special statute for the Peninsula Health Care District, the Midpeninsula Regional Open Space District, and the Santa Clara Valley Open-Space Authority.
(3) Existing law authorizes, until January 1, 2020, the Counties of Alameda, Los Angeles, Riverside, San Bernardino, San Diego, Solano, and Yuba to select a bidder on the basis of best value, as defined, for construction projects in excess of $1,000,000. Existing law requires that bidders verify specified information under oath.
This bill would expand this authorization to include the County of San Mateo. By expanding the bidders required to verify specified information under oath, this bill would impose a state-mandated local program by creating a new crime. The bill would additionally authorize these counties to use a best value construction contracting method to award individual annual contracts, not to exceed three $3,000,000, adjusted annually to reflect the percentage change in the California Consumer Price Index, for repair, remodeling, or other repetitive work to be done according to unit prices, as defined.
This bill would make legislative findings and declarations as to the necessity of a special statute for County of San Mateo.
(4) 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 32132.95 is added to the Health and Safety Code, to read:

32132.95.
 (a) Notwithstanding Section 32132 or any other law, upon approval by the board of directors of the Peninsula Health Care District, the design-build process 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 facilities or other buildings in that district.
(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 “local agency” shall mean the Peninsula Health Care District and its board of directors.
(c) To the extent that any project utilizing the design-build process authorized by subdivision (a) is otherwise required to comply 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), this section shall not be construed as an exemption from that act.
(d) This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

SEC. 2.

 Section 20155 of the Public Contract Code is amended to read:

20155.
 (a) This article provides for a pilot program for the Counties of Alameda, Los Angeles, Riverside, San Bernardino, San Diego, San Mateo, Solano, and Yuba for construction projects in excess of one million dollars ($1,000,000).
(b) The board of supervisors of a county shall let any contract for a construction project pursuant to this article to the bidder representing the best value or else reject all bids.
(c) The bidder may be selected on the basis of the best value to the county. In order to implement this method of selection, the board of supervisors shall adopt and publish procedures and required criteria that ensure that all selections are conducted in a fair and impartial manner. These procedures shall conform to Sections 20155.3 to 20155.6, inclusive, and shall be mandatory for a county that chooses to participate in the pilot program.
(d) If the board of supervisors of a county deems it to be in the best interest of the county, the board of supervisors, on the refusal or failure of the successful bidder for a project to execute a tendered contract, may award it to the bidder with the second lowest best value score, as determined in accordance with subdivision (c) of Section 20155.5. If the second bidder fails or refuses to execute the contract, the board of supervisors may likewise award it to the bidder with the third lowest best value score, as determined in accordance with subdivision (c) of Section 20155.5.
(e) (1) A county listed in subdivision (a) may also use the best value construction contracting method set out in this article to award individual annual contracts, which shall not exceed three million dollars ($3,000,000), adjusted annually to reflect the percentage change in the California Consumer Price Index, for repair, remodeling, or other repetitive work to be done according to unit prices. The contracts shall be based on plans and specifications for typical work. No annual contracts may be awarded for any new construction.
(2) For purposes of this subdivision, best value criteria shall be applied to the annual contract for construction services, rather than to an individual, specific project. Annual contracts may be extended or renewed for two subsequent annual terms and a maximum of six million dollars ($6,000,000) over the subsequent two terms of the contract. Contract values shall be adjusted annually to reflect the percentage change in the California Consumer Price Index.
(3) For purposes of this subdivision, “unit price” means the amount paid for a single unit of an item of work, and “typical work” means a work description applicable universally or applicable to a large number of individual projects, as distinguished from work specifically described with respect to an individual project. For purposes of this section, “repair, remodeling, or other repetitive work to be done according to unit prices” shall not include design or contract drawings.

SEC. 3.

 Section 20155.1 of the Public Contract Code is amended to read:

20155.1.
 As used in this article:
(a) “Best value” means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.
(b) “Best value contract” means a competitively bid contract entered into pursuant to this article.
(c) “Best value contractor” means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract.
(d) “County” means any of the following counties:
(1) The County of Alameda.
(2) The County of Los Angeles.
(3) The County of Riverside.
(4) The County of San Bernardino.
(5) The County of San Diego.
(6) The County of San Mateo.
(7) The County of Solano.
(8) The County of Yuba.
(e) “Demonstrated management competency” means the experience, competency, capability, and capacity of the proposed management staffing to complete projects of similar size, scope, or complexity.
(f) “Financial condition” means the financial resources needed to perform the contract. The criteria used to evaluate a bidder’s financial condition shall include, at a minimum, capacity to obtain all required payment bonds, performance bonds, and liability insurance.
(g) “Labor compliance” means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidder’s labor compliance shall include, as a minimum, the bidder’s ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with those requirements, and its past conformance with requirements to pay prevailing wages on public works projects.
(h) “Qualifications” means the financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record of the bidder, and, if required by the bidding documents, some or all of the preceding qualifications as they pertain to subcontractors proposed to be used by the bidder for designated portions of the work. A county shall evaluate financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record, using, to the extent possible, quantifiable measurements.
(i) “Relevant experience” means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.
(j) “Safety record” means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidder’s safety record shall include, at a minimum, its experience modification rate for the most recent three-year period, and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period.

SEC. 4.

 Section 5580 is added to the Public Resources Code, to read:

5580.
 (a) Notwithstanding Section 5594 or any other law, upon approval by the board of directors of the Midpeninsula Regional Open Space District, the design-build process 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 facilities or other buildings in that district.
(b) The minimum project limitation of one million dollars ($1,000,000), as described in subdivision (a) of Section 22162 of the Public Contract Code, shall not apply to the Midpeninsula Regional Open Space District.
(c) 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 “local agency” shall mean the Midpeninsula Regional Open Space District and its board of directors.
(d) This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

SEC. 5.

 Section 35160 is added to the Public Resources Code, immediately following Section 35159, to read:

35160.
 (a) Notwithstanding Section 35159 or any other law, upon approval by the board of directors of the Santa Clara Valley Open-Space Authority, the design-build process 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 facilities or other buildings in that authority.
(b) The minimum project limitation of one million dollars ($1,000,000), as described in subdivision (a) of Section 22162 of the Public Contract Code, shall not apply to the Santa Clara Valley Open-Space Authority.
(c) 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 “local agency” shall mean the Santa Clara Valley Open-Space Authority and its board of directors.
(d) This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

SEC. 6.

 (a) The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances relating to the Peninsula Health Care District, the Midpeninsula Regional Open Space District, and the Santa Clara Valley Open-Space Authority.
(b) The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique need of the County of San Mateo to expedite project delivery on a five-year capital improvement plan for the development of eight new county projects; therefore, this authority is necessary to avoid unnecessary change orders, construction defects, delays, and litigation that ultimately cost taxpayers more than the savings that were realized by awarding a contract to the lowest bidder.

SEC. 7.

 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.