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SB-626 Construction Manager/General Contractor Procurement Method: Department of Water Resources.(2021-2022)

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Date Published: 02/19/2021 04:00 AM
SB626:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 626


Introduced by Senator Dodd

February 18, 2021


An act to amend Sections 10187.5 and 10190 of, to add Section 10187.7 to, and to add Article 1.1 (commencing with Section 10112) to Chapter 1 of Part 2 of Division 2 of, the Public Contract Code, relating to public contracts.


LEGISLATIVE COUNSEL'S DIGEST


SB 626, as introduced, Dodd. Construction Manager/General Contractor Procurement Method: Department of Water Resources.
Existing law authorizes the Department of Transportation, regional transportation agencies, and the San Diego Association of Governments to engage in a Construction Manager/General Contractor project delivery method (CM/GC method) for specified public work projects.
This bill would authorize the Department of Water Resources to utilize the CM/GC method, as specified, for projects for the construction of a facility or infrastructure related to water resources. The bill would require the Department of Water Resources, on all projects delivered by the department, to use department employees or consultants under contract with the department to perform all project design and engineering services related to design, and construction inspection services, required for the CM/GC method consistent with specified existing law. The bill would prohibit the use of the CM/GC method of procurement for the design or construction of through-Delta conveyance facilities of the Sacramento-San Joaquin Delta. The bill would require specified information provided to the Department of Water Resources to be verified under oath, thus imposing a state-mandated local program by expanding the scope of an existing crime.
Existing law, until January 1, 2025, authorizes the Department of General Services, the Military Department, the Department of Corrections and Rehabilitation, and specified local agencies to use the design-build procurement process for specified public works. Existing law authorizes the Department of Water Resources to use the design-build procurement process only for those projects at the Salton Sea.
This bill would delete the limitation on the latter department’s authority to use the design-build method to only those projects at the Salton Sea, and would exclude from that department’s authority to use the design-build method the design or construction of through-Delta water conveyances in the Sacramento-San Joaquin Delta.
Existing law requires agencies authorized to use the design-build method of project delivery to notify the State Public Works Board before advertising the design-build project, except that for projects at the Salton Sea, the Director of Water Resources is required to notify the California Water Commission.
This bill would exclude construction projects undertaken by the Department of Water Resources pursuant to its authority under the federal Central Valley Project from the requirement that the Director of Water Resources notify the State Public Works Board before advertising the design-build project.
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.

 Article 1.1 (commencing with Section 10112) is added to Chapter 1 of Part 2 of Division 2 of the Public Contract Code, to read:
Article  1.1. Construction Manager/General Contractor Procurement Method for the Department of Water Resources

10112.
 (a) This article provides for an alternative procurement procedure for certain projects performed by the Department of Water Resources.
(b) (1) It is the intent of the Legislature in enacting this article to authorize the Department of Water Resources to utilize the Construction Manager/General Contractor method as a cost-effective option for constructing water resources projects.
(2) The Construction Manager/General Contractor method allows the department to engage a construction manager during the design process to provide input on the design. During the design phase, the construction manager provides advice including, but not limited to, scheduling, pricing, and phasing to assist the department to design a more constructible project.
(c) The Legislature finds and declares that utilizing a Construction Manager/General Contractor method requires a clear understanding of the roles and responsibilities of each participant in the process. The Legislature also finds and declares that cost-effective benefits are achieved by shifting the liability and risk for cost containment and project schedule to the construction manager and by permitting the coherent phasing of projects into discrete contract increments.

10112.1.
 As used in this article:
(a) “Construction manager” means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a Construction Manager/General Contractor method contract.
(b) “Construction Manager/General Contractor method” means a project delivery method in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The contract for construction services may be entered into at the same time as the contract for preconstruction services, or at a later time. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.
(c) “Department” means the Department of Water Resources.
(d) “Preconstruction services” means advice during the design phase including, but not limited to, scheduling, pricing, and phasing to assist the department to design a more constructible project.
(e) “Project” means the construction of a facility or infrastructure related to water resources, including green infrastructure and fish and wildlife habitat restoration.

10112.2.
 (a) The Construction Manager/General Contractor method provided by this article may be used by the department, but is not limited to, when it is anticipated that the method will reduce project costs or expedite project completion in a manner that is not achievable through the design-bid-build method. Notwithstanding any other law, for projects utilizing the Construction Manager/General Contractor method provided by this article, the department shall advertise, award, and administer the Construction Manager/General Contractor contract.
(b) On all projects delivered by the department utilizing the Construction Manager/General Contractor method provided by this article, the department shall use department employees or consultants under contract with the department to perform all project design and engineering services related to design required for Construction Manager/General Contractor project delivery consistent with Article XXII of the California Constitution. On all projects delivered by the department, the department shall use department employees or consultants under contract with the department to perform all construction inspection services required for Construction Manager/General Contractor project delivery consistent with Article XXII of the California Constitution.
(c) Notwithstanding any other provision of this article, the department shall not utilize this method of procurement for the design or construction of through-Delta conveyance facilities of the Sacramento-San Joaquin Delta.

10112.3.
 Construction Manager/General Contractor method projects shall progress as follows:
(a) (1) The department shall establish a procedure for the evaluation and selection of a construction manager through a request for qualifications (RFQ). The RFQ shall include, but not be limited to, the following:
(A) If the construction manager is a partnership, limited partnership, or other association, a list of all of the partners, general partners, or association members known at the time of the bid submission who will participate in the Construction Manager/General Contractor method contract, including, but not limited to, subcontractors.
(B) Evidence that the members of the construction manager 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 construction of the project, as well as a financial statement that assures the department that the construction manager has the capacity to complete the project, construction expertise, and an acceptable safety record.
(C) The licenses, registration, and credentials required to construct the project, including information on the revocation or suspension of any license, registration, or credential.
(D) Evidence that establishes that the construction manager has the capacity to obtain all required payment and performance bonding, liability insurance, and errors and omissions insurance.
(E) Any prior serious or willful violation of the California Occupational Safety and Health Act of 1973 (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 construction manager, and information concerning workers’ compensation experience history and worker safety program.
(F) Information concerning any debarment, disqualification, or removal from a federal, state, or local government public works project. Any instance in which a construction manager, 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.
(G) Any instance in which the construction manager, or its owners, officers, or managing employees, defaulted on a construction contract.
(H) Any violations of the Contractors’ State License Law (Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code), excluding alleged violations of federal or state law including the payment of wages, benefits, apprenticeship requirements, or personal income tax withholding, or of the Federal Insurance Contributions Act (26 U.S.C. Sec. 3101, et seq.) withholding requirements settled against any member of the construction manager.
(I) Information concerning the bankruptcy or receivership of any member of the construction manager, including information concerning any work completed by a surety.
(J) Information concerning all settled adverse claims, disputes, or lawsuits between the owner of a public works project and any member of the construction manager during the five years preceding submission of a bid pursuant to this section, in which the claim, settlement, or judgment exceeds fifty thousand dollars ($50,000). Information shall also be provided concerning any work completed by a surety during this period.
(K) In the case of a partnership or other association that is not a legal entity, a copy of the agreement creating the partnership or association and specifying that all partners or association members agree to be fully liable for the performance under the contract.
(L) For the purposes of this paragraph, a construction manager’s safety record shall be deemed acceptable if their experience modification rate for the most recent three-year period is an average of 1.00 or less, and their average total recordable injury/illness rate and average lost work rate for the most recent three-year period does not exceed the applicable statistical standards for its business category.
(2) The information required pursuant to this subdivision shall be verified under oath by the construction manager and its members in the manner in which civil pleadings in civil actions are verified. Information that is not a public record pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) shall not be open to public inspection.
(b) For each RFQ, the department shall generate a final list of qualified persons or firms that participated in the RFQ prior to entering into negotiations on the contract or contracts to which the RFQ applies.
(c) (1) For each contract included in the RFQ, the department shall enter into separate negotiations for the contract with the highest qualified person or firm on the final list for that contract. However, if the RFQ is for multiple contracts and specifies that all of the multiple contracts will be awarded to a single construction manager, there may be a single negotiation for all of the multiple contracts. The negotiations shall include consideration of compensation and other contract terms that the department determines to be fair and reasonable to the department. In making this decision, the department shall take into account the estimated value, the scope, the complexity, and the nature of the professional services or construction services to be rendered. If the department is not able to negotiate a satisfactory contract with the highest qualified person or firm on the final list, regarding compensation and on other contract terms the department determines to be fair and reasonable, the department shall formally terminate negotiations with that person or firm. The department may undertake negotiations with the next most qualified person or firm on the final list in sequence until an agreement is reached, or a determination is made to reject all persons or firms on the final list.
(2) If a contract for construction services is entered into pursuant to this article and includes preconstruction services by the construction manager, the department shall enter into a written contract with the construction manager for preconstruction services under which contract the department shall pay the construction manager a fee for preconstruction services in an amount agreed upon by the department and the construction manager. The preconstruction services contract may include fees for services to be performed during the contract period provided, however, the department shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after the department has entered into a services contract. A preconstruction services contract shall provide for the subsequent negotiation for construction of all or any discreet phase or phases of the project.
(3) A contract for construction services shall be awarded after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. If a fixed price or a guaranteed maximum price is not negotiated, the department shall not award the contract for construction services.
(4) The department is not required to award the construction services contract.
(5) Construction shall not commence on any phase, package, or element until the department and construction manager agree in writing on either a fixed price that the department will pay for the construction to be commenced or a guaranteed maximum price for the construction to be commenced and construction schedule for the project. The construction manager shall perform not less than 30 percent of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors pursuant to Section 10112.5.

10112.14.
 (a) Any construction manager that is selected to construct a project pursuant to this article shall possess or obtain sufficient bonding to cover the contract amount for construction services and risk and liability insurance as the department may require.
(b) Any payment or performance bond written for the purposes of this article shall be written using a bond form developed by the department.

10112.15.
 All subcontractors bidding on contracts pursuant to this article shall be afforded the protections contained in Chapter 4 (commencing with Section 4100) of Part 1. The construction manager shall do all of the following:
(a) Provide public notice of the availability of work to be subcontracted in accordance with the publication requirements applicable to the competitive bidding process of the department.
(b) Provide a fixed date and time on which the subcontracted work will be awarded in accordance with the procedure established pursuant to this chapter
(c) Comply with any subcontracting procedures adopted by the department that were included in the department’s RFQ. If the department has adopted procedures to prequalify public works contractors, the construction manager may use the procedures to prequalify subcontractors.

10112.6.
 The department may retain the services of a design professional or construction project manager, or both, throughout the course of the project in order to ensure compliance with this article.

10112.7.
 Contracts awarded pursuant to this article shall be valid until the project is completed.

10112.8.
 Nothing in this article is intended to affect, expand, alter, or limit any rights or remedies otherwise available at law.

SEC. 2.

 Section 10187.5 of the Public Contract Code is amended to read:

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 relate 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) (1)“Department” means the Department of General Services, the Military Department, and the Department of Corrections and Rehabilitation. Rehabilitation, and the Department of Water Resources.

(2)For the purposes of projects at the Salton Sea, “department” means the Department of Water Resources.

(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) (1)“Director” means, with respect to procurements undertaken by the Department of General Services, the Director of General Services; with respect to procurements undertaken by the Military Department, the Adjutant General; or, with respect to procurements undertaken by the Department of Corrections and Rehabilitation, the secretary of that department. department, or, with respect to procurements undertaken by the Department of Water Resources, the Director of Water Resources.

(2)For purposes of projects at the Salton Sea, “director” means the Director of Water Resources.

SEC. 3.

 Section 10187.7 is added to the Public Contract Code, to read:

10187.7.
 This article, as it relates to the Department of Water Resources, does not apply to the design or construction of through-Delta water conveyances in the Sacramento-San Joaquin Delta.

SEC. 4.

 Section 10190 of the Public Contract Code is amended to read:

10190.
 (a) The Except as provided in subdivision (b) 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.
(b) (1) Notwithstanding subdivision (a), for purposes of projects at the Salton Sea, the Director of Water Resources shall notify the California Water Commission regarding the method to be used for selecting the design-build entry, prior to advertising the design-build project.
(2) Notwithstanding subdivision (a), for purposes of projects undertaken pursuant to the authority granted in Section 11451 of, and Article 1 (commencing with Section 11550) of Chapter 5 of Part 3 of Division 6 of, the Water Code, the director of the Department of Water Resources is not required to notify the State Public Works Board pursuant to this section.

SEC. 5.

 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.