AB 2551: Contract procurement: surface storage projects.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-09-28
The Local Agency Public Construction Act establishes procedures and requirements for contracting by local agencies for the construction of public works, including the requirement to award the contract to the lowest responsible bidder. Existing law governing specified water districts requires those districts to use competitive bidding and to award the contract to the lowest responsible bidder.
This bill would allow a local agency to use the construction manager at-risk, design-build, or design-build-operate method of delivery on a surface storage project, as described. The bill would require these contracts to be awarded on a best value basis or to the lowest responsible bidder, and establish a procurement process for these contracts. The bill would require the bidder to certify specified information under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would also prohibit a contracting entity from being prequalified or short-listed unless it provides an enforceable commitment to the local agency that the entity and its subcontractors 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, as specified.
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 Local Agency Public Construction Act establishes procedures and requirements for contracting by local agencies for the construction of public works, including the requirement to award the contract to the lowest responsible bidder. Existing law governing specified water districts requires those districts to use competitive bidding and to award the contract to the lowest responsible bidder.
This bill would allow a local agency to use the construction manager at-risk, design-build, or design-build-operate method of delivery on a surface storage project, as described. The bill would require these contracts to be awarded on a best value basis or to the lowest responsible bidder, and establish a procurement process for these contracts. The bill would require the bidder to certify specified information under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would also prohibit a contracting entity from being prequalified or short-listed unless it provides an enforceable commitment to the local agency that the entity and its subcontractors 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, as specified.
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 Local Agency Public Construction Act establishes procedures and requirements for contracting by local agencies for the construction of public works, including the requirement to award the contract to the lowest responsible bidder. Existing law governing specified water districts requires those districts to use competitive bidding and to award the contract to the lowest responsible bidder.
This bill would allow a local agency to use the construction manager at-risk, design-build, or design-build-operate method of delivery on a surface storage project, as described. The bill would require these contracts to be awarded on a best value basis or to the lowest responsible bidder, and establish a procurement process for these contracts. The bill would require the bidder to certify specified information under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would also prohibit a contracting entity from being prequalified or short-listed unless it provides an enforceable commitment to the local agency that the entity and its subcontractors 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, as specified.
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 Local Agency Public Construction Act establishes procedures and requirements for contracting by local agencies for the construction of public works, including the requirement to award the contract to the lowest responsible bidder. Existing law governing specified water districts requires those districts to use competitive bidding and to award the contract to the lowest responsible bidder.
This bill would allow a local agency to use the construction manager at-risk, design-build, or design-build-operate method of delivery on a surface storage project, as described. The bill would require these contracts to be awarded on a best value basis or to the lowest responsible bidder, and establish a procurement process for these contracts. The bill would require the bidder to certify specified information under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would also prohibit a contracting entity from being prequalified or short-listed unless it provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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, as specified.
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 Local Agency Public Construction Act establishes procedures and requirements for contracting by local agencies for the construction of public works, including the requirement to award the contract to the lowest responsible bidder. Existing law governing specified water districts requires those districts to use competitive bidding and to award the contract to the lowest responsible bidder.
This bill would allow a local agency to use the construction management manager at-risk, design-build, or design-build-operate method of delivery on a surface storage project, as described. The bill would require these contracts to be awarded on a best value basis or to the lowest responsible bidder, and establish a procurement process for these contracts. The bill would require the bidder to certify specified information under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would also prohibit a contracting entity from being prequalified or short-listed unless it provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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, as specified.
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 Local Agency Public Construction Act establishes procedures and requirements for contracting by local agencies for the construction of public works, including the requirement to award the contract to the lowest responsible bidder. Existing law governing specified water districts requires those districts to use competitive bidding and to award the contract to the lowest responsible bidder.
This bill would allow a local agency to use the construction management at-risk, design-build, public-private partnership, or design-build-operate method of delivery on a surface storage project, as described. The bill would require these contracts to be awarded on a best value basis or to the lowest responsible bidder, and establish a procurement process for these contracts. The bill would require the bidder to certify specified information under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would also prohibit a contracting entity from being prequalified or shortlisted short-listed unless it provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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, as specified.
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 Local Agency Public Construction Act establishes procedures and requirements for contracting by local agencies for the construction of public works, including the requirement to award the contract to the lowest responsible bidder. Existing law governing specified water districts requires those districts to use competitive bidding and to award the contract to the lowest responsible bidder.
This bill would allow a local agency to use the construction management at-risk, design-build, public-private partnership, or design-build-operate method of delivery on a surface storage project, as described. The bill would require these contracts to be awarded on a best value basis or to the lowest responsible bidder, and establish a procurement process for these contracts. The bill would require the bidder to certify specified information under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would also prohibit a contracting entity from being prequalified or shortlisted unless it provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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, as specified.
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, the Water Quality, Supply, and Infrastructure Improvement Act of 2014, approved by the voters as Proposition 1 at the November 4, 2014, statewide general election, authorizes the issuance of general obligation bonds in the amount of $7,545,000,000 to finance a water quality, supply, and infrastructure improvement program. The bond act provides that the sum of $2,700,000,000 is continuously appropriated from the fund to the California Water Commission for public benefits associated with water storage projects that improve the operation of the state water system, are cost effective, and provide a net improvement in ecosystem and water quality conditions.
This bill would authorize certain surface storage projects that receive Proposition 1 funding to use the design-build method of project delivery.
Existing law, the Water Quality, Supply, and Infrastructure Improvement Act of 2014, approved by the voters as Proposition 1 at the November 4, 2014, statewide general election, authorizes the issuance of general obligation bonds in the amount of $7,545,000,000 to finance a water quality, supply, and infrastructure improvement program. The bond act provides that the sum of $2,700,000,000 is continuously appropriated from the fund to the California Water Commission for public benefits associated with water storage projects that improve the operation of the state water system, are cost effective, and provide a net improvement in ecosystem and water quality conditions.
This bill would authorize certain surface storage projects that receive Proposition 1 funding to use the design-build method of project delivery.
The Legislature finds and declares that alternative project delivery, using the best value procurement methodology, has been authorized for various agencies that have reported benefits from those projects, including reduced project costs, expedited project start and completion, simplified project controls and accountability, and design features that are not achievable through the traditional design-bid-build method.
20928.1.(a)A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to Division 26.7 (commencing with Section 79700) of the Water Code may use, in addition to any other methods of project delivery otherwise allowable by irrigation districts, county water districts, or other similar water districts by law, the following methods of project delivery:
(1)Construction manager at-risk.
(2)Design-Build, including conventional, progressive, and target price.
(3)Design-build-operate.
(b)The contract shall be awarded on a best value basis or to the lowest responsible bidder.
20928.2.The procurement process for the project shall progress as follows:
(a)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 agencys needs. The performance specifications and any plans shall be prepared by a design professional who is duly licensed and registered in California.
(b)The local agency shall prepare and issue a request for qualifications in order to prequalify or short-list the entities, including subcontractors and suppliers, whose bids 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 bids, the procedure for final selection of the bidder, 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-related expertise, construction expertise, acceptable safety records, 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 all of the following information:
(A)If the bidder is a privately held corporation, limited liability company, partnership, or joint venture, comprised of privately-held entities, 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 contracting 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 project, and a financial statement that ensures that the bidder has the capacity to complete the project.
(C)The licenses, registration, and credentials required for 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 bidder 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)An acceptable safety record.Safety record means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidders 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.
(4)The information required under this subdivision shall be certified under penalty of perjury by the bidder and its general partners or joint venture members.
(c)A contracting entity shall not be prequalified or short-listed unless the entity provides an enforceable commitment to the local agency that the entity and its subcontractors 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)For work performed on or after January 1, 2017, at least 30 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)For work performed on or after January 1, 2018, at least 40 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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 work performed on or after January 1, 2019, at least 50 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)For work performed on or after January 1, 2020, at least 60 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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 chiefs 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)The apprenticeship graduation percentage requirements of subparagraph (B) of paragraph (1) are satisfied if, in a particular calendar month, either of the following is true:
(A)The required percentage of the skilled journeypersons employed by the contractor or subcontractor to perform work on the contract or project meet the graduation percentage requirement.
(B)For the hours of work performed by skilled journeypersons employed by the contractor or subcontractor on the contract or project, the percentage of hours performed by skilled journeypersons who met the graduation requirement meets or exceeds the required graduation percentage.
(3)A contractor or subcontractor need not meet the apprenticeship graduation requirements of subparagraph (B) of paragraph (1) if, during the calendar month, the contractor or subcontractor employs skilled journeypersons to perform fewer than 10 hours of work on the contract or project.
(4)A subcontractor need not meet the apprenticeship graduation requirements of subparagraph (B) of paragraph (1) if both of the following requirements are met:
(A)The subcontractor was not a listed subcontractor under Section 4104 or a substitute for a listed subcontractor.
(B)The subcontract does not exceed one-half of 1 percent of the price of the prime contract.
(5)(A)A contractor, bidder, or other entitys commitment that a skilled and trained workforce will be used to perform the project or contract shall be established by the contractor, bidder, or other entitys agreement with the local agency that the contractor, bidder, or other entity and its subcontractors at every tier will comply with this subdivision and that the contractor, bidder, or other entity will provide the local agency with a report on a monthly basis while the project or contract is being performed, as to whether the contractor, bidder, or other entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the contractor, bidder, or other entity fails to provide the monthly report required by this section, or provides a report that is incomplete, the local agency shall withhold further payments until a complete report is provided.
(C)If a monthly report does not demonstrate compliance with this chapter, the local agency shall withhold further payments until the contractor, bidder, or other entity provides a plan to achieve substantial compliance with this article, with respect to the relevant apprenticeable occupation, prior to completion of the contract or project.
(D)A monthly report provided to the public agency or other awarding body shall be 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) and shall be open to public inspection.
(6)This subdivision shall not apply if the contractor, bidder, or other entity has entered into a project labor agreement that will bind itself and all its subcontractors who perform construction work on the project, and the contractor, bidder, or other entity agrees to be bound by the project agreement.
(d)The local agency shall make the list of prequalified entities available to the public.
(e)Based on the documents prepared as described in subdivision (a), the local agency shall prepare a request for bids that invites prequalified or short-listed entities to submit competitive sealed bids in the manner prescribed by the local agency. The request for bids shall include, but need not be limited to, all of the following elements:
(1)Identification of the basic scope and needs of the project or contract, the estimated cost to perform the work being requested, the methodology that will be used by the local agency to evaluate bids, whether the contract will be awarded on the basis of best value or to the lowest responsible bidder, 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 bids, 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 bids.
(4)If a best value selection method is used, the local agency may reserve the right to request bid revisions and hold discussions and negotiations with responsive bidders, in which case the local agency shall so specify in the request for bids and shall publish separately or incorporate into the request for bids applicable procedures to be observed by the local agency to ensure that any discussions or negotiations are conducted in good faith.
(f)For those projects utilizing low bid as the final selection method, the competitive bidding process shall, if appropriate for the delivery method, result in lump-sum bids by the prequalified or short-listed entities, and awards shall be made to the bidder that is the lowest responsible bidder.
(g)For those projects utilizing best value as a selection method, the competition shall progress as follows:
(1)Competitive bids shall be evaluated by using only the criteria and selection procedures specifically identified in the request for bids. The following minimum factors, however, shall be included, if applicable to the delivery method and weighted as deemed appropriate by the local agency:
(A)Price, unless a stipulated sum is specified and including financial and bonding capacity requirements.
(B)Technical design, procurement, and construction expertise.
(C)Proposed construction approach, sequencing, and methods.
(D)Compliance with the requirements of the owner-provided performance specification.
(E)Ability to meet the milestone schedule dates and, if applicable, any liquidated damages.
(F)Ability to meet the quality requirements.
(G)Proposed risk allocation and sharing.
(H)Safety record.
(I)Warranty.
(J)Life-cycle costs over 15 or more years as specified by the local agency.
(2)Pursuant to subdivision (e), the local agency may hold discussions or negotiations with responsive bidders using the process articulated in the local agencys request for bids.
(3)When the evaluation is complete, the responsive bidders shall be ranked based on a determination of value provided by the local agency if no more than three bidders are required to be ranked.
(4)The award of the contract shall be made to the responsible bidder whose bid is determined by the local agency to have offered the best value to the public.
(5)Notwithstanding any provision of the Water Code, upon issuance of a contract award the local agency shall publicly announce its award, identifying the bidder to which the award is made, along with a statement regarding the basis of the award.
(6)The statement regarding the local agencys contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.
20928.3.(a)The local agency, in each request for proposals, may identify specific types of subcontractors that must be included in the entity statement of qualifications and proposal.
(b)Following award of the contract, the 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 qualification 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.
20928.4.Any project constructed pursuant to this article shall be subject to Part 1 (commencing with Section 6000) of Division 3 of the Water Code.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
The Legislature finds and declares that alternative project delivery, using the best value procurement methodology, has been authorized for various agencies that have reported benefits from those projects, including reduced project costs, expedited project start and completion, simplified project controls and accountability, and design features that are not achievable through the traditional design-bid-build method.
20928.1.(a)A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to Division 26.7 (commencing with Section 79700) of the Water Code may use, in addition to any other methods of project delivery otherwise allowable by irrigation districts, county water districts, or other similar water districts by law, the following methods of project delivery:
(1)Construction manager at-risk.
(2)Design-Build, including conventional, progressive, and target price.
(3)Design-build-operate.
(b)The contract shall be awarded on a best value basis or to the lowest responsible bidder.
20928.2.The procurement process for the project shall progress as follows:
(a)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 agencys needs. The performance specifications and any plans shall be prepared by a design professional who is duly licensed and registered in California.
(b)The local agency shall prepare and issue a request for qualifications in order to prequalify or short-list the entities, including subcontractors and suppliers, whose bids 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 bids, the procedure for final selection of the bidder, 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-related expertise, construction expertise, acceptable safety records, 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 all of the following information:
(A)If the bidder is a privately held corporation, limited liability company, partnership, or joint venture, comprised of privately-held entities, 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 contracting 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 project, and a financial statement that ensures that the bidder has the capacity to complete the project.
(C)The licenses, registration, and credentials required for 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 bidder 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)An acceptable safety record.Safety record means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidders 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.
(4)The information required under this subdivision shall be certified under penalty of perjury by the bidder and its general partners or joint venture members.
(c)A contracting entity shall not be prequalified or short-listed unless the entity provides an enforceable commitment to the local agency that the entity and its subcontractors 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)For work performed on or after January 1, 2017, at least 30 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)For work performed on or after January 1, 2018, at least 40 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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 work performed on or after January 1, 2019, at least 50 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)For work performed on or after January 1, 2020, at least 60 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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 chiefs 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)The apprenticeship graduation percentage requirements of subparagraph (B) of paragraph (1) are satisfied if, in a particular calendar month, either of the following is true:
(A)The required percentage of the skilled journeypersons employed by the contractor or subcontractor to perform work on the contract or project meet the graduation percentage requirement.
(B)For the hours of work performed by skilled journeypersons employed by the contractor or subcontractor on the contract or project, the percentage of hours performed by skilled journeypersons who met the graduation requirement meets or exceeds the required graduation percentage.
(3)A contractor or subcontractor need not meet the apprenticeship graduation requirements of subparagraph (B) of paragraph (1) if, during the calendar month, the contractor or subcontractor employs skilled journeypersons to perform fewer than 10 hours of work on the contract or project.
(4)A subcontractor need not meet the apprenticeship graduation requirements of subparagraph (B) of paragraph (1) if both of the following requirements are met:
(A)The subcontractor was not a listed subcontractor under Section 4104 or a substitute for a listed subcontractor.
(B)The subcontract does not exceed one-half of 1 percent of the price of the prime contract.
(5)(A)A contractor, bidder, or other entitys commitment that a skilled and trained workforce will be used to perform the project or contract shall be established by the contractor, bidder, or other entitys agreement with the local agency that the contractor, bidder, or other entity and its subcontractors at every tier will comply with this subdivision and that the contractor, bidder, or other entity will provide the local agency with a report on a monthly basis while the project or contract is being performed, as to whether the contractor, bidder, or other entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the contractor, bidder, or other entity fails to provide the monthly report required by this section, or provides a report that is incomplete, the local agency shall withhold further payments until a complete report is provided.
(C)If a monthly report does not demonstrate compliance with this chapter, the local agency shall withhold further payments until the contractor, bidder, or other entity provides a plan to achieve substantial compliance with this article, with respect to the relevant apprenticeable occupation, prior to completion of the contract or project.
(D)A monthly report provided to the public agency or other awarding body shall be 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) and shall be open to public inspection.
(6)This subdivision shall not apply if the contractor, bidder, or other entity has entered into a project labor agreement that will bind itself and all its subcontractors who perform construction work on the project, and the contractor, bidder, or other entity agrees to be bound by the project agreement.
(d)The local agency shall make the list of prequalified entities available to the public.
(e)Based on the documents prepared as described in subdivision (a), the local agency shall prepare a request for bids that invites prequalified or short-listed entities to submit competitive sealed bids in the manner prescribed by the local agency. The request for bids shall include, but need not be limited to, all of the following elements:
(1)Identification of the basic scope and needs of the project or contract, the estimated cost to perform the work being requested, the methodology that will be used by the local agency to evaluate bids, whether the contract will be awarded on the basis of best value or to the lowest responsible bidder, 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 bids, 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 bids.
(4)If a best value selection method is used, the local agency may reserve the right to request bid revisions and hold discussions and negotiations with responsive bidders, in which case the local agency shall so specify in the request for bids and shall publish separately or incorporate into the request for bids applicable procedures to be observed by the local agency to ensure that any discussions or negotiations are conducted in good faith.
(f)For those projects utilizing low bid as the final selection method, the competitive bidding process shall, if appropriate for the delivery method, result in lump-sum bids by the prequalified or short-listed entities, and awards shall be made to the bidder that is the lowest responsible bidder.
(g)For those projects utilizing best value as a selection method, the competition shall progress as follows:
(1)Competitive bids shall be evaluated by using only the criteria and selection procedures specifically identified in the request for bids. The following minimum factors, however, shall be included, if applicable to the delivery method and weighted as deemed appropriate by the local agency:
(A)Price, unless a stipulated sum is specified and including financial and bonding capacity requirements.
(B)Technical design, procurement, and construction expertise.
(C)Proposed construction approach, sequencing, and methods.
(D)Compliance with the requirements of the owner-provided performance specification.
(E)Ability to meet the milestone schedule dates and, if applicable, any liquidated damages.
(F)Ability to meet the quality requirements.
(G)Proposed risk allocation and sharing.
(H)Safety record.
(I)Warranty.
(J)Life-cycle costs over 15 or more years as specified by the local agency.
(2)Pursuant to subdivision (e), the local agency may hold discussions or negotiations with responsive bidders using the process articulated in the local agencys request for bids.
(3)When the evaluation is complete, the responsive bidders shall be ranked based on a determination of value provided by the local agency if no more than three bidders are required to be ranked.
(4)The award of the contract shall be made to the responsible bidder whose bid is determined by the local agency to have offered the best value to the public.
(5)Notwithstanding any provision of the Water Code, upon issuance of a contract award the local agency shall publicly announce its award, identifying the bidder to which the award is made, along with a statement regarding the basis of the award.
(6)The statement regarding the local agencys contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.
20928.3.(a)The local agency, in each request for proposals, may identify specific types of subcontractors that must be included in the entity statement of qualifications and proposal.
(b)Following award of the contract, the 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 qualification 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.
20928.4.Any project constructed pursuant to this article shall be subject to Part 1 (commencing with Section 6000) of Division 3 of the Water Code.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
The Legislature finds and declares that alternative project delivery, using the best value procurement methodology, has been authorized for various agencies that have reported benefits from those projects, including reduced project costs, expedited project start and completion, simplified project controls and accountability, and design features that are not achievable through the traditional design-bid-build method.
20928.1.(a)A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to Division 26.7 (commencing with Section 79700) of the Water Code may use, in addition to any other methods of project delivery otherwise allowable by irrigation districts districts, county water districts, or other similar water districts by law, the following methods of project delivery:
(1)Construction manager at-risk.
(2)Design-Build, including conventional, progressive, and target price.
(3)Design-build-operate.
(b)The contract shall be awarded on a best value basis or to the lowest responsible bidder.
20928.2.The procurement process for the project shall progress as follows:
(a)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 agencys needs. The performance specifications and any plans shall be prepared by a design professional who is duly licensed and registered in California.
(b)The local agency shall prepare and issue a request for qualifications in order to prequalify or short-list the entities, including subcontractors and suppliers, whose bids 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 bids, the procedure for final selection of the bidder, 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-related expertise, construction expertise, acceptable safety records, 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 all of the following information:
(A)If the bidder is a privately held corporation, limited liability company, partnership, or joint venture, comprised of privately-held entities, 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 contracting 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 project, and a financial statement that ensures that the bidder has the capacity to complete the project.
(C)The licenses, registration, and credentials required for 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 bidder 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)An acceptable safety record. A bidders 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 bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.Safety record means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidders 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.
(4)The information required under this subdivision shall be certified under penalty of perjury by the bidder and its general partners or joint venture members.
(c)A contracting entity shall not be prequalified or short-listed unless the entity provides an enforceable commitment to the local agency that the entity and its subcontractors 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)At the start of construction,For work performed on or after January 1, 2017, at least 20 30 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)By the second year of construction, and every year thereafter, the workforce requirements of subclause (I) shall increase by 10 percent until at least 60 percent ofFor work performed on or after January 1, 2018, at least 40 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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 work performed on or after January 1, 2019, at least 50 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)For work performed on or after January 1, 2020, at least 60 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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 chiefs 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)The apprenticeship graduation percentage requirements of subparagraph (B) of paragraph (1) are satisfied if, in a particular calendar month, either of the following is true:
(A)The required percentage of the skilled journeypersons employed by the contractor or subcontractor to perform work on the contract or project meet the graduation percentage requirement.
(B)For the hours of work performed by skilled journeypersons employed by the contractor or subcontractor on the contract or project, the percentage of hours performed by skilled journeypersons who met the graduation requirement meets or exceeds the required graduation percentage.
(3)A contractor or subcontractor need not meet the apprenticeship graduation requirements of subparagraph (B) of paragraph (1) if, during the calendar month, the contractor or subcontractor employs skilled journeypersons to perform fewer than 10 hours of work on the contract or project.
(4)A subcontractor need not meet the apprenticeship graduation requirements of subparagraph (B) of paragraph (1) if both of the following requirements are met:
(A)The subcontractor was not a listed subcontractor under Section 4104 or a substitute for a listed subcontractor.
(B)The subcontract does not exceed one-half of 1 percent of the price of the prime contract.
(5)(A)A contractor, bidder, or other entitys commitment that a skilled and trained workforce will be used to perform the project or contract shall be established by the contractor, bidder, or other entitys agreement with the local agency that the contractor, bidder, or other entity and its subcontractors at every tier will comply with this subdivision and that the contractor, bidder, or other entity will provide the local agency with a report on a monthly basis while the project or contract is being performed, as to whether the contractor, bidder, or other entity and its subcontractors are complying with the requirements of this subdivision.
(B)If the contractor, bidder, or other entity fails to provide the monthly report required by this section, or provides a report that is incomplete, the local agency shall withhold further payments until a complete report is provided.
(C)If a monthly report does not demonstrate compliance with this chapter, the local agency shall withhold further payments until the contractor, bidder, or other entity provides a plan to achieve substantial compliance with this article, with respect to the relevant apprenticeable occupation, prior to completion of the contract or project.
(D)A monthly report provided to the public agency or other awarding body shall be 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) and shall be open to public inspection.
(6)This subdivision shall not apply if the contractor, bidder, or other entity has entered into a project labor agreement that will bind itself and all its subcontractors who perform construction work on the project, and the contractor, bidder, or other entity agrees to be bound by the project agreement.
(d)The local agency shall make the list of prequalified entities available to the public.
(e)Based on the documents prepared as described in subdivision (a), the local agency shall prepare a request for bids that invites prequalified or short-listed entities to submit competitive sealed bids in the manner prescribed by the local agency. The request for bids shall include, but need not be limited to, all of the following elements:
(1)Identification of the basic scope and needs of the project or contract, the estimated cost to perform the work being requested, the methodology that will be used by the local agency to evaluate bids, whether the contract will be awarded on the basis of best value or to the lowest responsible bidder, 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 bids, 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 bids.
(4)If a best value selection method is used, the local agency may reserve the right to request bid revisions and hold discussions and negotiations with responsive bidders, in which case the local agency shall so specify in the request for bids and shall publish separately or incorporate into the request for bids applicable procedures to be observed by the local agency to ensure that any discussions or negotiations are conducted in good faith.
(f)For those projects utilizing low bid as the final selection method, the competitive bidding process shall, if appropriate for the delivery method, result in lump-sum bids by the prequalified or short-listed entities, and awards shall be made to the bidder that is the lowest responsible bidder.
(g)For those projects utilizing best value as a selection method, the competition shall progress as follows:
(1)Competitive bids shall be evaluated by using only the criteria and selection procedures specifically identified in the request for bids. The following minimum factors, however, shall be included, if applicable to the delivery method and weighted as deemed appropriate by the local agency:
(A)Price, unless a stipulated sum is specified and including financial and bonding capacity requirements.
(B)Technical design, procurement, and construction expertise.
(C)Proposed construction approach, sequencing, and methods.
(D)Compliance with the requirements of the owner-provided performance specification.
(E)Ability to meet the milestone schedule dates and, if applicable, any liquidated damages.
(F)Ability to meet the quality requirements.
(G)Proposed risk allocation and sharing.
(H)Safety record.
(I)Warranty.
(J)Life-cycle costs over 15 or more years as specified by the local agency.
(2)Pursuant to subdivision (e), the local agency may hold discussions or negotiations with responsive bidders using the process articulated in the local agencys request for bids.
(3)When the evaluation is complete, the responsive bidders shall be ranked based on a determination of value provided by the local agency if no more than three bidders are required to be ranked.
(4)The award of the contract shall be made to the responsible bidder whose bid is determined by the local agency to have offered the best value to the public.
(5)Notwithstanding any provision of the Water Code, upon issuance of a contract award the local agency shall publicly announce its award, identifying the bidder to which the award is made, along with a statement regarding the basis of the award.
(6)The statement regarding the local agencys contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.
20928.3.(a)The local agency, in each request for proposals, may identify specific types of subcontractors that must be included in the entity statement of qualifications and proposal.
(b)Following award of the contract, the 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 qualification 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.
20928.4.Any project constructed pursuant to this article shall be subject to Part 1 (commencing with Section 6000) of Division 3 of the Water Code.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
The Legislature finds and declares that alternative project delivery, using the best value procurement methodology, has been authorized for various agencies that have reported benefits from those projects, including reduced project costs, expedited project start and completion, simplified project controls and accountability, and design features that are not achievable through the traditional design-bid-build method.
20928.1.(a)A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to Division 26.7 (commencing with Section 79703) 79700) of the Water Code may use use, in addition to any other methods of project delivery otherwise allowable by irrigation districts by law, the following methods of project delivery:
(1)Construction manager at-risk.
(2)Design-build. Design-Build, including conventional, progressive, and target price.
(3)Design-build-operate.
(b)The contract shall be awarded on a best value basis or to the lowest responsible bidder.
20928.2.The procurement process for the project shall progress as follows:
(a)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 agencys needs. The performance specifications and any plans shall be prepared by a design professional who is duly licensed and registered in California.
(b)The local agency shall prepare and issue a request for qualifications in order to prequalify or short-list the entities entities, including subcontractors and suppliers, whose bids 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 bids, the procedure for final selection of the bidder, 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, design-related expertise, construction expertise, acceptable safety records, 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 all of the following information:
(A)If the bidder is a privately held corporation, limited liability company, partnership, or joint venture, comprised of privately-held entities, 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 contracting 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 project, and a financial statement that ensures that the bidder has the capacity to complete the project.
(C)The licenses, registration, and credentials required for 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 bidder 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)An acceptable safety record. A bidders 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 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 certified under penalty of perjury by the bidder and its general partners or joint venture members.
(c)A contracting entity shall not be prequalified or short-listed unless the entity provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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 effect at the time the request for qualifications is issued. 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)At the start of construction, at least 20 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)By the second year of construction, and every year thereafter, the workforce requirements of subclause (I) shall increase by 10 percent until at least 50 60 percent of skilled journeypersons employed to perform work on the contract or project by the bidder 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 chiefs 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)The apprenticeship graduation percentage requirements of subparagraph (B) of paragraph (1) are satisfied if, in a particular calendar month, either of the following is true:
(A)The required percentage of the skilled journeypersons employed by the contractor or subcontractor to perform work on the contract or project meet the graduation percentage requirement.
(B)For the hours of work performed by skilled journeypersons employed by the contractor or subcontractor on the contract or project, the percentage of hours performed by skilled journeypersons who met the graduation requirement meets or exceeds the required graduation percentage.
(3)A contractor or subcontractor need not meet the apprenticeship graduation requirements of subparagraph (B) of paragraph (1) if, during the calendar month, the contractor or subcontractor employs skilled journeypersons to perform fewer than 10 hours of work on the contract or project.
(4)A subcontractor need not meet the apprenticeship graduation requirements of subparagraph (B) of paragraph (1) if both of the following requirements are met:
(A)The subcontractor was not a listed subcontractor under Section 4104 or a substitute for a listed subcontractor.
(B)The subcontract does not exceed one-half of 1 percent of the price of the prime contract.
(2)An
(5)(A)A contractor, bidder, or other entitys commitment that a skilled and trained workforce will be used to perform the project or contract may shall be established by any of the following: the contractor, bidder, or other entitys agreement with the local agency that the contractor, bidder, or other entity and its subcontractors at every tier will comply with this subdivision and that the contractor, bidder, or other entity will provide the local agency with a report on a monthly basis while the project or contract is being performed, as to whether the contractor, bidder, or other entity and its subcontractors are complying with the requirements of this subdivision.
(A)The entitys agreement with the local agency that the entity and its subcontractors at every tier will comply with 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 entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement or equivalent document that includes the requirements of this subdivision and that will bind the bidder and all its subcontractors who performed construction work on the project.
(B)If the contractor, bidder, or other entity fails to provide the monthly report required by this section, or provides a report that is incomplete, the local agency shall withhold further payments until a complete report is provided.
(C)If a monthly report does not demonstrate compliance with this chapter, the local agency shall withhold further payments until the contractor, bidder, or other entity provides a plan to achieve substantial compliance with this article, with respect to the relevant apprenticeable occupation, prior to completion of the contract or project.
(D)A monthly report provided to the public agency or other awarding body shall be 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) and shall be open to public inspection.
(6)This subdivision shall not apply if the contractor, bidder, or other entity has entered into a project labor agreement that will bind itself and all its subcontractors who perform construction work on the project, and the contractor, bidder, or other entity agrees to be bound by the project agreement.
(d)The local agency shall make the list of prequalified entities available to the public.
(e)Based on the documents prepared as described in subdivision (a), the local agency shall prepare a request for bids that invites prequalified or short-listed entities to submit competitive sealed bids in the manner prescribed by the local agency. The request for bids shall include, but need not be limited to, all of the following elements:
(1)Identification of the basic scope and needs of the project or contract, the estimated cost of the project, to perform the work being requested, the methodology that will be used by the local agency to evaluate bids, whether the contract will be awarded on the basis of best value or to the lowest responsible bidder, 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 bids, 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 bids.
(4)If a best value selection method is used, the local agency may reserve the right to request bid revisions and hold discussions and negotiations with responsive bidders, in which case the local agency shall so specify in the request for bids and shall publish separately or incorporate into the request for bids applicable procedures to be observed by the local agency to ensure that any discussions or negotiations are conducted in good faith.
(f)For those projects utilizing low bid as the final selection method, the competitive bidding process shall shall, if appropriate for the delivery method, result in lump-sum bids by the prequalified or short-listed entities, and awards shall be made to the bidder that is the lowest responsible bidder.
(g)For those projects utilizing best value as a selection method, the competition shall progress as follows:
(1)Competitive bids shall be evaluated by using only the criteria and selection procedures specifically identified in the request for bids. The following minimum factors, however, shall be included, if applicable to the delivery method and weighted as deemed appropriate by the local agency:
(A)Price, unless a stipulated sum is specified and including financial and bonding capacity requirements.
(B)Technical design, procurement, and construction expertise.
(C)Proposed construction approach, sequencing, and methods.
(D)Compliance with the requirements of the owner-provided performance specification.
(E)Ability to meet the milestone schedule dates and, if applicable, any liquidated damages.
(F)Ability to meet the quality requirements.
(G)Proposed risk allocation and sharing.
(H)Safety record.
(I)Warranty.
(J)Life-cycle costs over 15 or more years as specified by the local agency.
(2)Pursuant to subdivision (e), the local agency may hold discussions or negotiations with responsive bidders using the process articulated in the local agencys request for bids.
(3)When the evaluation is complete, the responsive bidders shall be ranked based on a determination of value provided by the local agency if no more than three bidders are required to be ranked.
(4)The award of the contract shall be made to the responsible bidder whose bid is determined by the local agency to have offered the best value to the public.
(5)Notwithstanding any provision of the Water Code, upon issuance of a contract award the local agency shall publicly announce its award, identifying the bidder to which the award is made, along with a statement regarding the basis of the award.
(6)The statement regarding the local agencys contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.
20928.3.(a)The local agency, in each request for proposals, may identify specific types of subcontractors that must be included in the entity statement of qualifications and proposal.
(b)Following award of the contract, the 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 qualification 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.
20928.4.Any project constructed pursuant to this article shall be subject to Part 1 (commencing with Section 6000) of Division 3 of the Water Code.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
The Legislature finds and declares that alternative project delivery, using the best value procurement methodology, has been authorized for various agencies that have reported benefits from those projects, including reduced project costs, expedited project completion, and design features that are not achievable through the traditional design-bid-build method.
20928.1.(a)A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to Division 26.7 (commencing with Section 79703) of the Water Code may use the following methods of project delivery:
(1)Construction management manager at-risk.
(2)Design-build.
(3)Design-build-operate.
(b)The contract shall be awarded on a best value basis or to the lowest responsible bidder.
20928.2.The procurement process for the project shall progress as follows:
(a)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 agencys needs. The performance specifications and any plans shall be prepared by a design professional who is duly licensed and registered in California.
(b)The local agency shall prepare and issue a request for qualifications in order to prequalify or short-list the entities whose bids 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 bids, the procedure for final selection of the bidder, 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, construction expertise, acceptable safety records, 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 all of the following information:
(A)If the bidder 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 contracting 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 project, and a financial statement that ensures that the bidder has the capacity to complete the project.
(C)The licenses, registration, and credentials required for 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 bidder 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)An acceptable safety record. A bidders 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 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 certified under penalty of perjury by the bidder and its general partners or joint venture members.
(c)A contracting entity shall not be prequalified or short-listed unless the entity provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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 effect at the time the request for qualifications is issued.
(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)At the start of construction, at least 20 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)By the second year of construction, and every year thereafter, the workforce requirements of subclause (I) shall increase by 10 percent until at least 50 percent of skilled journeypersons employed to perform work on the contract or project by the bidder 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 chiefs 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 entitys 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 entitys agreement with the local agency that the entity and its subcontractors at every tier will comply with 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 entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement or equivalent document that includes the requirements of this subdivision and that will bind the bidder and all its subcontractors who performed construction work on the project.
(d)The local agency shall make the list of prequalified entities available to the public.
(e)Based on the documents prepared as described in subdivision (a), the local agency shall prepare a request for bids that invites prequalified or short-listed entities to submit competitive sealed bids in the manner prescribed by the local agency. The request for bids shall include, but need not be limited to, all of 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 bids, whether the contract will be awarded on the basis of best value or to the lowest responsible bidder, 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 bids, 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 bids.
(4)If a best value selection method is used, the local agency may reserve the right to request bid revisions and hold discussions and negotiations with responsive bidders, in which case the local agency shall so specify in the request for bids and shall publish separately or incorporate into the request for bids applicable procedures to be observed by the local agency to ensure that any discussions or negotiations are conducted in good faith.
(f)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 entities, and awards shall be made to the bidder that is the lowest responsible bidder.
(g)For those projects utilizing best value as a selection method, the competition shall progress as follows:
(1)Competitive bids shall be evaluated by using only the criteria and selection procedures specifically identified in the request for bids. The following minimum factors, however, shall be weighted as deemed appropriate by the local agency:
(A)Price, unless a stipulated sum is specified and including financial and bonding capacity requirements.
(B)Technical design, procurement, and construction expertise.
(C)Proposed construction approach, sequencing, and methods.
(D)Compliance with the requirements of the owner-provided performance specification.
(E)Ability to meet the milestone schedule dates and, if applicable, any liquidated damages.
(F)Ability to meet the quality requirements.
(G)Proposed risk allocation and sharing.
(H)Safety record.
(I)Warranty.
(J)Lifecycle Life-cycle costs over 15 or more years as specified by the local agency.
(2)Pursuant to subdivision (d), (e), the local agency may hold discussions or negotiations with responsive bidders using the process articulated in the local agencys request for bids.
(3)When the evaluation is complete, the responsive bidders shall be ranked based on a determination of value provided by the local agency if no more than three bidders are required to be ranked.
(4)The award of the contract shall be made to the responsible bidder whose bid is determined by the local agency to have offered the best value to the public.
(5)Notwithstanding any provision of the Water Code, upon issuance of a contract award the local agency shall publicly announce its award, identifying the bidder to which the award is made, along with a statement regarding the basis of the award.
(6)The statement regarding the local agencys contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.
20928.3.(a)The local agency, in each request for proposals, may identify specific types of subcontractors that must be included in the entity statement of qualifications and proposal.
(b)Following award of the contract, the 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 qualification 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.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
The Legislature finds and declares that alternative project delivery, using the best value procurement methodology, has been authorized for various agencies that have reported benefits from those projects, including reduced project costs, expedited project completion, and design features that are not achievable through the traditional design-bid-build method.
20928.1.(a)A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to Division 26.7 (commencing with Section 79703) of the Water Code may use the following methods of project delivery:
(1)Construction management at-risk.
(2)Design-build.
(3)Public-private partnership.
(4)
(3)Design-build-operate.
(b)The contract shall be awarded on a best value basis or to the lowest responsible bidder.
20928.2.The procurement process for the project shall progress as follows:
(a)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 agencys needs. The performance specifications and any plans shall be prepared by a design professional who is duly licensed and registered in California.
(b)The local agency shall prepare and issue a request for qualifications in order to prequalify or short-list the entities whose bids 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 bids, the procedure for final selection of the bidder, 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, construction expertise, acceptable safety records, 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 all of the following information:
(A)If the bidder 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 contracting 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 project, and a financial statement that ensures that the bidder has the capacity to complete the project.
(C)The licenses, registration, and credentials required for 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 bidder 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)An acceptable safety record. A bidders 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 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 certified under penalty of perjury by the bidder and its general partners or joint venture members.
(c)A contracting entity shall not be prequalified or shortlisted short-listed unless the entity provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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 effect at the time the request for qualifications is issued.
(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)At the start of construction, at least 20 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)By the second year of construction, and every year thereafter, the workforce requirements of subclause (I) shall increase by 10 percent until at least 50 percent of skilled journeypersons employed to perform work on the contract or project by the bidder 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 chiefs 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 entitys 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 entitys agreement with the local agency that the entity and its subcontractors at every tier will comply with 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 entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement or equivalent document that includes the requirements of this subdivision and that will bind the bidder and all its subcontractors who performed construction work on the project.
(d)The local agency shall make the list of prequalified entities available to the public.
(e)Based on the documents prepared as described in subdivision (a), the local agency shall prepare a request for bids that invites prequalified or short-listed entities to submit competitive sealed bids in the manner prescribed by the local agency. The request for bids shall include, but need not be limited to, all of 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 bids, whether the contract will be awarded on the basis of best value or to the lowest responsible bidder, 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 bids, 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 bids.
(4)If a best value selection method is used, the local agency may reserve the right to request bid revisions and hold discussions and negotiations with responsive bidders, in which case the local agency shall so specify in the request for bids and shall publish separately or incorporate into the request for bids applicable procedures to be observed by the local agency to ensure that any discussions or negotiations are conducted in good faith.
(f)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 entities, and awards shall be made to the bidder that is the lowest responsible bidder.
(g)For those projects utilizing best value as a selection method, the competition shall progress as follows:
(1)Competitive bids shall be evaluated by using only the criteria and selection procedures specifically identified in the request for bids. The following minimum factors, however, shall be weighted as deemed appropriate by the local agency:
(A)Price, unless a stipulated sum is specified and including financial and bonding capacity requirements.
(B)Technical design, procurement, and construction expertise.
(C)Proposed construction approach, sequencing, and methods.
(D)Compliance with the requirements of the owner-provided performance specification.
(E)Ability to meet the milestone schedule dates and, if applicable, any liquidated damages.
(F)Ability to meet the quality requirements.
(G)Proposed risk allocation and sharing.
(H)Safety record.
(I)Warranty.
(J)Lifecycle costs over 15 or more years as specified by the local agency.
(2)Pursuant to subdivision (d), the local agency may hold discussions or negotiations with responsive bidders using the process articulated in the local agencys request for bids.
(3)When the evaluation is complete, the responsive bidders shall be ranked based on a determination of value provided by the local agency if no more than three bidders are required to be ranked.
(4)The award of the contract shall be made to the responsible bidder whose bid is determined by the local agency to have offered the best value to the public.
(5)Notwithstanding any provision of the Water Code, upon issuance of a contract award the local agency shall publicly announce its award, identifying the bidder to which the award is made, along with a statement regarding the basis of the award.
(6)The statement regarding the local agencys contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.
20928.3.(a)The local agency, in each request for proposals, may identify specific types of subcontractors that must be included in the entity statement of qualifications and proposal.
(b)Following award of the contract, the 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 qualification 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.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
The Legislature finds and declares that alternative project delivery, using the best value procurement methodology, has been authorized for various agencies that have reported benefits from those projects, including reduced project costs, expedited project completion, and design features that are not achievable through the traditional design-bid-build method.
20928.1.(a)A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to Division 26.7 (commencing with Section 79703) of the Water Code may use the following methods of project delivery:
(1)Construction management at-risk.
(2)Design-build.
(3)Public-private partnership.
(4)Design-build-operate.
(b)The contract shall be awarded on a best value basis or to the lowest responsible bidder.
20928.2.The procurement process for the project shall progress as follows:
(a)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 agencys needs. The performance specifications and any plans shall be prepared by a design professional who is duly licensed and registered in California.
(b)The local agency shall prepare and issue a request for qualifications in order to prequalify or short-list the entities whose bids 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 bids, the procedure for final selection of the bidder, 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, construction expertise, acceptable safety records, 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 all of the following information:
(A)If the bidder 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 contracting 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 project, and a financial statement that ensures that the bidder has the capacity to complete the project.
(C)The licenses, registration, and credentials required for 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 bidder 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)An acceptable safety record. A bidders 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 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 certified under penalty of perjury by the bidder and its general partners or joint venture members.
(c)A contracting entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the local agency that the entity and its subcontractors who will be doing construction on the project 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 effect at the time the request for qualifications is issued.
(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)At the start of construction, at least 20 percent of the skilled journeypersons employed to perform work on the contract or project by the bidder 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)By the second year of construction, and every year thereafter, the workforce requirements of subclause (I) shall increase by 10 percent until at least 50 percent of skilled journeypersons employed to perform work on the contract or project by the bidder 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 chiefs 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 entitys 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 entitys agreement with the local agency that the entity and its subcontractors at every tier will comply with 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 entitys agreement that it will become a party to that project labor agreement.
(C)Evidence that the entity has entered into a project labor agreement or equivalent document that includes the requirements of this subdivision and that will bind the bidder and all its subcontractors who performed construction work on the project.
(d)The local agency shall make the list of prequalified entities available to the public.
(e)Based on the documents prepared as described in subdivision (a), the local agency shall prepare a request for bids that invites prequalified or short-listed entities to submit competitive sealed bids in the manner prescribed by the local agency. The request for bids shall include, but need not be limited to, all of 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 bids, whether the contract will be awarded on the basis of best value or to the lowest responsible bidder, 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 bids, 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 bids.
(4)If a best value selection method is used, the local agency may reserve the right to request bid revisions and hold discussions and negotiations with responsive bidders, in which case the local agency shall so specify in the request for bids and shall publish separately or incorporate into the request for bids applicable procedures to be observed by the local agency to ensure that any discussions or negotiations are conducted in good faith.
(f)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 entities, and awards shall be made to the bidder that is the lowest responsible bidder.
(g)For those projects utilizing best value as a selection method, the competition shall progress as follows:
(1)Competitive bids shall be evaluated by using only the criteria and selection procedures specifically identified in the request for bids. The following minimum factors, however, shall be weighted as deemed appropriate by the local agency:
(A)Price, unless a stipulated sum is specified and including financial and bonding capacity requirements.
(B)Technical design, procurement, and construction expertise.
(C)Proposed construction approach, sequencing, and methods.
(D)Compliance with the requirements of the owner-provided performance specification.
(E)Ability to meet the milestone schedule dates and, if applicable, any liquidated damages.
(F)Ability to meet the quality requirements.
(G)Proposed risk allocation and sharing.
(H)Safety record.
(I)Warranty.
(J)Lifecycle costs over 15 or more years as specified by the local agency.
(2)Pursuant to subdivision (d), the local agency may hold discussions or negotiations with responsive bidders using the process articulated in the local agencys request for bids.
(3)When the evaluation is complete, the responsive bidders shall be ranked based on a determination of value provided by the local agency if no more than three bidders are required to be ranked.
(4)The award of the contract shall be made to the responsible bidder whose bid is determined by the local agency to have offered the best value to the public.
(5)Notwithstanding any provision of the Water Code, upon issuance of a contract award the local agency shall publicly announce its award, identifying the bidder to which the award is made, along with a statement regarding the basis of the award.
(6)The statement regarding the local agencys contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit.
20928.3.(a)The local agency, in each request for proposals, may identify specific types of subcontractors that must be included in the entity statement of qualifications and proposal.
(b)Following award of the contract, the 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 qualification 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.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
SECTION 1.Section 79714.5 is added to the Water Code, to read:79714.5.A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to this division may use the design-build method of project delivery.
A surface storage project identified in the CALFED Bay-Delta Program Record of Decision, dated August 28, 2000, that receives funding pursuant to this division may use the design-build method of project delivery.
|
Date
|
Status
|
|---|---|
| May 23, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 73. Noes 1.) |
| Sep 9, 2016 | Enrolled and presented to the Governor at 2:30 p.m. |
| Aug 30, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 2. Page 6441.). |
| Aug 30, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Aug 25, 2016 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 28 pursuant to Assembly Rule 77. |
| Aug 23, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 36. Noes 1. Page 5313.). |
| Aug 23, 2016 | Read third time. Passed. Ordered to the Assembly. |
| Aug 22, 2016 | Read second time. Ordered to third reading. |
| Aug 19, 2016 | Read third time and amended. Ordered to second reading. |
| Aug 9, 2016 | Read second time. Ordered to third reading. |
| Aug 8, 2016 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8. |
| Aug 3, 2016 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR. |
| Aug 2, 2016 | Read second time and amended. Re-referred to Com. on APPR. |
| Aug 1, 2016 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (June 29). |
| Jun 9, 2016 | Referred to Com. on GOV. & F. |
| Feb 19, 2016 | Introduced. To print. |
| May 23, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 73. Noes 1. Page 4902.) |
| May 23, 2016 | Read third time. Passed. Ordered to the Senate. |
| May 23, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 19, 2016 | Read second time. Ordered to third reading. |
| May 18, 2016 | From committee: Do pass. (Ayes 20. Noes 0.) (May 18). |
| Apr 28, 2016 | Re-referred to Com. on APPR. |
| Apr 27, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended. |
| Apr 13, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 13. Noes 1.) (April 12). Re-referred to Com. on APPR. |
| Apr 6, 2016 | Re-referred to Com. on W., P., & W. |
| Apr 5, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on W., P., & W. Read second time and amended. |
| Mar 8, 2016 | Referred to Com. on W., P., & W. |
| Feb 22, 2016 | Read first time. |
| Feb 21, 2016 | From printer. May be heard in committee March 22. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 30, 2016 | AB 2551 GALLAGHER Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 23, 2016 | Assembly 3rd Reading AB2551 Gallagher By Nielsen | Senate Floor |
Passed |
|
| Jun 29, 2016 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Governance and Finance |
Passed |
|
| May 23, 2016 | AB 2551 GALLAGHER Assembly Third Reading | Assembly Floor |
Passed |
|
| May 18, 2016 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 12, 2016 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Water, Parks, and Wildlife |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Aaron Read and Associates | * Support | Jun 29, 2016 |
| Air Conditioning Trade Association | ** Against | Aug 23, 2016 |
| American Council of Engineering Companies, California | ** Support | Aug 23, 2016 |
| ASSEMBLY FLOOR: 73-1, 5 | ** Against | Aug 23, 2016 |
| Association Of California Water Agencies | ** Support | Aug 23, 2016 |
| California Chapters of the National Electrical Contractors Association | ** Support | Aug 23, 2016 |
| California Cotton Ginners and Growers Associations | ** Support | Aug 23, 2016 |
| California Fresh Fruit Association | ** Support | Aug 23, 2016 |
| California Rice Commission | ** Support | Aug 23, 2016 |
| California-Nevada Conference Of Operating Engineers | ** Support | Aug 23, 2016 |
| Far West Equipment Dealers Association | ** Support | Aug 23, 2016 |
| Five Counties Central Labor Council | ** Support | Aug 23, 2016 |
| International Brotherhood Of Electrical Workers, Local 659 | ** Support | Aug 23, 2016 |
| Marysville Central Labor Council, AFL-CIO | ** Support | Aug 23, 2016 |
| North Eastern California Building and Construction Trade Councils | * Support | Jun 29, 2016 |
| Northeastern California Building & Construction Trades Council | ** Support | Aug 23, 2016 |
| Northern California Water Association | ** Support | Aug 23, 2016 |
| Plumbing-Heating-Cooling Contractors Association | ** Against | Aug 23, 2016 |
| Sheet Metal Workers' Local Union No. 104 | ** Support | Aug 23, 2016 |
| Sierra Club California | ** Against | Aug 23, 2016 |
| Sites Project Authority | * Support | Jun 29, 2016 |
| Sites Project Joint Powers Authority | ** Support | Aug 23, 2016 |
| Tahama-Calusa Canal Authority | * Support | Jun 29, 2016 |
| Teamsters Local 137 | ** Support | May 18, 2016 |
| Valley Ag Water Coalition | ** Support | Aug 23, 2016 |
| Western Agricultural Processors Association | ** Support | Aug 23, 2016 |
| Western Electrical Contractors Association | ** Against | Aug 23, 2016 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 2551
Author:(Gallagher, et al.)
As Amended Ver:August 19, 2016
Majority vote
ASSEMBLY: | 73-1 | (May 23, 2016) | SENATE: | 36-1 | (August 23, 2016) |
Original Committee Reference: W., P., & W.
SUMMARY: Authorizes alternative contracting methods for surface storage projects that receive Proposition 1 funding and conditions the use of alternative project delivery methods on meeting specific solicitation, qualification, and selection requirements. Specifically, this bill:
- Authorizes the use of construction management at-risk, design-build, or design-build-operate (DBO), project delivery methods for Proposition 1 funded surface storage projects.
- Specifies the process by which a local agency will solicit bids on a project.
- Prohibits a bidder to prequalify unless they use a skilled and trained workforce, as defined.
- Requires the local agency to make a list of prequalified bidders available to the public.
- Specifies the bid selection process to be made from the pool of prequalified bidders.
The Senate amendments:
- Specify work force employment qualifications specifically conforming use of skilled workforce requirements to existing law.
- Specify the process to comply with the skilled labor requirements.
- Provide for the regulation and supervision by the state of any project constructed utilizing the provisions of this bill.
- Make other clarifying and technical changes.
EXISTING LAW:
- In various ways authorizes the use of alternative project delivery methods for state and local agencies. Expressly prohibits the use of design-build-operate (DBO) procurement.
- Makes surface storage projects identified in the CALFED Bay-Delta Program Record of Decision, except projects prohibited by the California Wild and Scenic Rivers Act, eligible for $2.7 billion funding continuously appropriated to the Water Commission under Proposition 1.
- Requires reservoir construction to be approved by the Department of Water Resources' Division of Dam Safety and requires reservoirs to be inspected by the Division.
FISCAL EFFECT: According to the Assembly Appropriations Committee there are unknown future costs or savings depending on the outcomes of the projects selected for alternative project delivery, as opposed to other procurement methods that might have been used on those projects. Any cost or benefit of a specific contracting method will depend on each individual project. Given that these are likely to be large, complex projects, the costs or savings could be significant.
COMMENTS: The traditional public works contracting method is known as design-bid-build, whereby project design is done under contract by an architectural/engineering firm, then upon completion of the design phase, the construction phase is put out to bid and the contract is awarded to the lowest responsible bidder.
Increasing use of alternative project delivery methods have been occurring in the public sector over the last 15 years. Research on alternative project delivery methods have shown these methods may lead to greater flexibility and accountability, higher quality, faster completion and lower overall project costs.
This bill authorizes the use of alternative methods of project delivery for surface storage projects that receive Proposition 1 funding. This bill does not alter the requirements currently required under Proposition 1. It lays out the specific process by which a project could utilize the alternative methods. Only after meeting the requirements of Proposition 1, receiving Proposition 1 funding, and meeting the solicitation and evaluation requirements in this bill, will a surface storage project be able to utilize alternative project delivery methods.
Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096 FN: 0004760
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 2551
:
SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/29/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach
NO VOTE RECORDED: Pavley
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 73-1, 5/23/16 - See last page for vote
DIGEST: This bill authorizes local agencies to use alternative procurement methods for reservoirs funded by Proposition 1 bond funds.
Senate Floor Amendments of 8/19/16 allow these reservoir projects to use procurement methods that county water districts and other similar water districts can already use, remove a threshold for what constitutes an acceptable safety record, and modify certain requirements that contracts for those projects must meet.
Existing law:
- Requires, generally, local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder (referred to as “design-bid-build”).
- Allows some state and local agencies, as defined, until January 1, 2025, to use the design-build method for contracts in excess of $1 million to procure both design and construction services from a single company before the development of complete plans and specifications, using a standardized process created by SB 785 (Wolk, Chapter 931, Statutes of 2014).
- Requires, among other things:
- Qualified bidders to have an acceptable safety record, defined as exceeding a specified threshold, and
- A design build contract to meet certain percentage requirements for the share of skilled work performed by graduates of an apprenticeship program.
- Prohibits design-build-operate procurement methods.
- Allows local agencies to use “construction manager at risk” contracting, which allows local officials to retain a construction manager, who provides pre-construction services during the design period, later becomes the general contractor during the construction process.
- Requires reservoir construction to be approved by the Department of Water Resources’ Division of Dam Safety and requires reservoirs to be inspected by the Division.
- Authorizes the sale of $3 billion in General Obligation bonds for the construction of water storage projects that provide public benefits (Proposition 1, 2014).
This bill:
- Allows any surface storage project that receives funding from the water storage funding allocation in Proposition 1 to use design-build (including conventional, progressive, and target price methods), design-bid-build, and construction manager at-risk alternative procurement methods, in addition to any methods currently authorized for irrigation districts, county water districts, and other similar water districts.
- Requires any entity using these methods to meet certain requirements, including the following:
- Authorizes design-build-operate agreements where existing law expressly prohibits this type of procurement.
- Requires at least 30 percent of the skilled workforce at every tier of the contract or project to be graduates of an apprenticeship program by January 1, 2017, increasing by 10 percent annually to at least 60 percent by January 1, 2020.
- Clarifies the process by which compliance with skilled labor requirements are met and enforced.
- Requires bidders to have an “acceptable safety record,” and defines “safety record” to include the prior history concerning the safe performance of construction contracts, based on specified criteria.
- Requires the contract to be awarded to the lowest responsible bidder or on a best-value basis.
- Requires any project procured under the bill to be subject to the approval and review by the Division of Dam Safety.
Background
Alternative procurement methods. The Local Agency Public Construction Act requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder. This design-bid-build method is the traditional, and most widely-used, approach to public works construction. This approach splits construction projects into two distinct phases: design and construction. During the design phase, the local agency prepares detailed project plans and specifications using its own employees or by hiring outside architects and engineers. Once project designs are complete, local officials invite bids from the construction community and award the contract to the lowest responsible bidder.
By contrast, state law allows state and local officials, until January 1, 2025, to use the design-build method for contracts in excess of $1 million to procure both design and construction services from a single company before the development of complete plans and specifications. Under design-build, the owner contracts with a single entity—which can be a single firm, a consortium, or a joint venture—to design and construct a project. Before inviting bids, the owner prepares documents that describe the basic concept of the project, as opposed to a complete set of drawings and specifications of the final product. In the bidding phase, the owner typically evaluates bids on a best-value basis, incorporating technical factors, such as qualifications and design quality, in addition to price. The Department of General Services, the California Department of Corrections and Rehabilitation, cities, counties, transit districts, special districts operating wastewater, water recycling, or solid waste management facilities, and certain health care districts may use design-build.
Originally the authorizations for state agencies and local governments to use design-build were dispersed throughout state law in separate code sections. In 2014, the Legislature consolidated these provisions into consistent, generally-applicable statutes (SB 785, Wolk, 2014).
CALFED surface storage projects. In response to increasing environmental concerns and water supply restrictions in the Sacramento-San Joaquin Delta (the Delta), state and federal agencies created CALFED in 1994. In 2000, the parties to CALFED signed the CALFED Record of Decision, which laid out the agencies’ commitment to water supply reliability, ecosystem restoration, water quality improvements, and levee system integrity. Constructing new dams upstream of the Delta was a cornerstone of CALFED. The Record of Decision identified numerous surface storage projects, including three that could potentially be built by local agencies, specifically Sites Reservoir, Temperance Flat Reservoir, and Los Vaqueros Expansion Project.
Proposition 1. Proposition 1, approved by voters in November 2014, authorized the sale of $7.5 billion in general obligation bonds for various types of water and environmental restoration projects. Of that amount, Proposition 1 allocates $2.7 billion to the Water Commission for competitive grants for water storage projects, including new reservoirs.
Some local agencies want to be able to use alternative procurement methods to construct and operate projects funded by Proposition 1.
Comments
- Purpose of the bill. Historically, water projects built by local agencies have been limited to the design-bid-build delivery method. While there are benefits to this process, such as an impartial design team and builders bidding on the same design, there are also several drawbacks. Unexpected costs may arise during construction due to change orders or other unanticipated complications. Alternative delivery methods, on the other hand, can be more cost effective when used to procure large, complex projects because these methods give contractors the freedom to develop clever solutions to problems and transfer the risk of overruns from the public agency to the contractor. Proposition 1 is expected to provide funding to several large surface storage projects identified by CALFED in 2000. These projects are expected to cost billions of dollars and often include complex geological studies, making them prime candidates for design-build or other procurement methods. AB 2551 provides local agencies the necessary authorization to use these methods, thereby ensuring timely construction of much-needed new dams and helping stretch taxpayer dollars to fund more projects.
- Local agency, multinational corporation. Critics of the use of design-build by public agencies note that the entities that typically design and construct these projects are large, sophisticated engineering companies that possess specialized expertise in this area. These companies may be in a better position than a local agency project proponent to understand the conditions of the contracts governing the agreement—and how those contracts allocate risks between the design-build entity and the local government. It is unclear whether the local agencies that might make use of the authority granted by AB 2551 have the competencies necessary to effectively structure a contract and oversee the project delivery.
Related Legislation
SB 693 (Hueso, 2016), currently pending on the Assembly Floor, deletes "skilled and trained workforce" requirements in various sections of existing law related to alternative procurement methods and enacts a new comprehensive section of the Public Contract Code applicable whenever a public entity is required to ensure that contractors use a “skilled and trained workforce.” AB 2551 includes changes that conform to these provisions.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
American Council of Engineering Companies, California
Association of California Water Agencies
California Chapters of the National Electrical Contractors Association
California Cotton Ginners and Growers Associations
California Fresh Fruit Association
California Legislative Conference of Plumbing, Heating and Piping Industry
California Rice Commission
California-Nevada Conference of Operating Engineers
Far West Equipment Dealers Association
Five Counties Central Labor Council
General Teamsters Professional, Heath Care and Public Employees Local 137
International Brotherhood of Electrical Workers, Local 659
Marysville Central Labor Council, AFL-CIO
Northeastern California Building & Construction Trades Council
Northern California Water Association
Sheet Metal Workers’ Local Union No. 104
Sites Project Joint Powers Authority
State Building and Construction Trades Council
United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry, Local 228
Valley Ag Water Coalition
Western Agricultural Processors Association
OPPOSITION: (Verified 8/22/16)
Air Conditioning Trade Association
Associated Builders and Contractors
Plumbing-Heating-Cooling Contractors Association
Sierra Club California
Western Electrical Contractors Association
AYES: Achadjian, Alejo, Travis Allen, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Quirk, Rodriguez, Salas, Santiago, Steinorth, Thurmond, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NOES: Mark Stone
NO VOTE RECORDED: Arambula, Eggman, Harper, Patterson, Ridley-Thomas, Ting
8/22/16 23:05:46
**** END ****
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 2551
:
SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/29/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach
NO VOTE RECORDED: Pavley
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 73-1, 5/23/16 - See last page for vote
DIGEST: This bill authorizes local agencies to use alternative procurement methods for reservoirs funded by Proposition 1 bond funds.
Existing law:
- Requires, generally, local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder (referred to as “design-bid-build”).
- Allows some state and local agencies, as defined, until January 1, 2025, to use the design-build method for contracts in excess of $1 million to procure both design and construction services from a single company before the development of complete plans and specifications, using a standardized process created by SB 785 (Wolk, Chapter 931, Statutes of 2014) that :
- Allows the awarding authority to prepare a list of qualified or short-listed entities, based on specified criteria.
- Allows the awarding authority to prepare a request for proposals (RFP) that invites prequalified or short-listed entities to submit competitive sealed proposals in the manner prescribed by the awarding authority.
- Requires, for projects utilizing low bid as the selection method, the competitive bidding process to involve lump-sum bids by the prequalified or short-listed design-build entities, and requires awards to be made to the design-build entity that is the lowest responsible bidder.
- Requires, for those projects utilizing best value as a selection method, proposals to be evaluated using only the criteria and selection procedures specifically identified in the RFP and requires the contract to be awarded to the responsible design-build entity whose proposal is determined by the authority to have offered the best value to the public.
- Requires the awarding authority, upon issuance of a contract award, to publicly announce its award, identifying the design-build entity to which the award is made, along with a written decision supporting its contract award and stating the basis of the award.
- Requires the use of skilled labor, the issuance of performance bonds, insurance coverage, and identification of subcontractors that will complete at least one-half of 1% of the value of a contract.
- Prohibits design-build-operate procurement methods.
- Allows local agencies to use “construction manager at risk” contracting, which allows local officials to retain a construction manager, who provides pre-construction services during the design period, later becomes the general contractor during the construction process.
- Requires reservoir construction to be approved by the Department of Water Resources’ Division of Dam Safety and requires reservoirs to be inspected by the Division.
This bill:
- Allows any surface storage project that is identified in the CALFED Record of Decision and receives funding from the water storage funding allocation in Proposition 1 to use design-build (including conventional, progressive, and target price methods), design-bid-build, and construction manager at-risk alternative procurement methods.
- Requires any entity using these methods to follow the process for procuring a design-build project in existing law, except that this bill:
- Authorizes design-build-operate agreements where existing law expressly prohibits this type of procurement.
- Requires at least 50 percent of the skilled workforce at every tier of the contract or project to be graduates of an apprenticeship program by the fourth year of project construction, where existing statute requires at least 60 percent by January 1, 2020.
- Omits a provision in existing law that prevents materials not subject to the California Public Records Act from being inspected by the public and further provides that a local agency must make the list of prequalified entities available to the public.
- Requires a local agency that evaluates bids to consider numerous additional factors as compared to existing law, such as financial and bonding capacity requirements, proposed construction approach and methods, ability to meet a schedule, proposed risk allocation and sharing, and safety record.
- Omits a requirement in existing law that any design-build project list and exclusively use subcontractors that will perform special services for more than one-half of one percent of the value of the prime contractor’s bid.
- Omits a requirement in existing law that limits the retention proceeds withheld by the agency from the design-build entity to no more than five percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
- Clarifies the process by which compliance with skilled labor requirements are met and enforced.
- Makes other technical and conforming changes to encompass construction manager at-risk and design-build-operate procurement methods.
- Requires the contract to be awarded to the lowest responsible bidder or on a best-value basis.
- Requires any project procured under the bill to be subject to the approval and review by the Division of Dam Safety.
Background
Alternative procurement methods. The Local Agency Public Construction Act requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder. This design-bid-build method is the traditional, and most widely-used, approach to public works construction. This approach splits construction projects into two distinct phases: design and construction. During the design phase, the local agency prepares detailed project plans and specifications using its own employees or by hiring outside architects and engineers. Once project designs are complete, local officials invite bids from the construction community and award the contract to the lowest responsible bidder.
By contrast, state law allows state and local officials, until January 1, 2025, to use the design-build method for contracts in excess of $1 million to procure both design and construction services from a single company before the development of complete plans and specifications. Under design-build, the owner contracts with a single entity—which can be a single firm, a consortium, or a joint venture—to design and construct a project. Before inviting bids, the owner prepares documents that describe the basic concept of the project, as opposed to a complete set of drawings and specifications of the final product. In the bidding phase, the owner typically evaluates bids on a best-value basis, incorporating technical factors, such as qualifications and design quality, in addition to price. The Department of General Services, the California Department of Corrections and Rehabilitation, cities, counties, transit districts, special districts operating wastewater, water recycling, or solid waste management facilities, and certain health care districts may use design-build.
Originally the authorizations for state agencies and local governments to use design-build were dispersed throughout state law in separate code sections. In 2014, the Legislature consolidated these provisions into consistent, generally-applicable statutes (SB 785, Wolk, 2014).
CALFED surface storage projects. In response to increasing environmental concerns and water supply restrictions in the Sacramento-San Joaquin Delta (the Delta), state and federal agencies created CALFED in 1994. In 2000, the parties to CALFED signed the CALFED Record of Decision, which laid out the agencies’ commitment to water supply reliability, ecosystem restoration, water quality improvements, and levee system integrity. Constructing new dams upstream of the Delta was a cornerstone of CALFED. The Record of Decision identified numerous surface storage projects, including three that could potentially be built by local agencies, specifically Sites Reservoir, Temperance Flat Reservoir, and Los Vaqueros Expansion Project.
Proposition 1. Proposition 1, approved by voters in November 2014, authorized the sale of $7.5 billion in general obligation bonds for various types of water and environmental restoration projects. Of that amount, Proposition 1 allocates $2.7 billion to the Water Commission for competitive grants for water storage projects, including new reservoirs.
Some local agencies want to be able to use alternative procurement methods to construct and operate projects funded by Proposition 1.
Comments
- Purpose of the bill. Historically, water projects built by local agencies have been limited to the design-bid-build delivery method. While there are benefits to this process, such as an impartial design team and builders bidding on the same design, there are also several drawbacks. Unexpected costs may arise during construction due to change orders or other unanticipated complications. Alternative delivery methods, on the other hand, can be more cost effective when used to procure large, complex projects because these methods give contractors the freedom to develop clever solutions to problems and transfer the risk of overruns from the public agency to the contractor. Proposition 1 is expected to provide funding to several large surface storage projects identified by CALFED in 2000. These projects are expected to cost billions of dollars and often include complex geological studies, making them prime candidates for design-build or other procurement methods. AB 2551 provides local agencies the necessary authorization to use these methods, thereby ensuring timely construction of much-needed new dams and helping stretch taxpayer dollars to fund more projects.
- Local agency, multinational corporation. Critics of the use of design-build by public agencies note that the entities that typically design and construct these projects are large, sophisticated engineering companies that possess specialized expertise in this area. These companies may be in a better position than a local agency project proponent to understand the conditions of the contracts governing the agreement—and how those contracts allocate risks between the design-build entity and the local government. It is unclear whether the local agencies that might make use of the authority granted by AB 2551 have the competencies necessary to effectively structure a contract and oversee the project delivery.
Related Legislation
SB 693 (Hueso, 2016), currently pending on the Assembly Floor, deletes "skilled and trained workforce" requirements in various sections of existing law related to alternative procurement methods and enacts a new comprehensive section of the Public Contract Code applicable whenever a public entity is required to ensure that contractors use a “skilled and trained workforce.” AB 2551 includes changes that conform to these provisions.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
American Council of Engineering Companies, California
Association of California Water Agencies
California Chapters of the National Electrical Contractors Association
California Cotton Ginners and Growers Associations
California Fresh Fruit Association
California Legislative Conference of Plumbing, Heating and Piping Industry
California Rice Commission
California-Nevada Conference of Operating Engineers
Far West Equipment Dealers Association
Five Counties Central Labor Council
General Teamsters Professional, Heath Care and Public Employees Local 137
International Brotherhood of Electrical Workers, Local 659
Marysville Central Labor Council, AFL-CIO
Northeastern California Building & Construction Trades Council
Northern California Water Association
Sheet Metal Workers’ Local Union No. 104
Sites Project Joint Powers Authority
State Building and Construction Trades Council
United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry, Local 228
Valley Ag Water Coalition
Western Agricultural Processors Association
OPPOSITION: (Verified 8/10/16)
Air Conditioning Trade Association
Associated Builders and Contractors
Plumbing-Heating-Cooling Contractors Association
Sierra Club California
Western Electrical Contractors Association
AYES: Achadjian, Alejo, Travis Allen, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Quirk, Rodriguez, Salas, Santiago, Steinorth, Thurmond, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NOES: Mark Stone
NO VOTE RECORDED: Arambula, Eggman, Harper, Patterson, Ridley-Thomas, Ting
8/10/16 15:34:57
**** END ****
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
Bill No: | AB 2551 | Hearing Date: | 6/29/16 |
Author: | Gallagher | Tax Levy: | No |
Version: | 4/27/16 | Fiscal: | Yes |
Consultant: | Favorini-Csorba | ||
Contract procurement: surface storage projects
Authorizes local agencies to use alternative procurement methods for reservoirs funded by Proposition 1 bond funds.
Background
Alternative Procurement Methods. The Local Agency Public Construction Act requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder. This design-bid-build method is the traditional, and most widely-used, approach to public works construction. This approach splits construction projects into two distinct phases: design and construction. During the design phase, the local agency prepares detailed project plans and specifications using its own employees or by hiring outside architects and engineers. Once project designs are complete, local officials invite bids from the construction community and award the contract to the lowest responsible bidder.
By contrast, state law allows state and local officials, until January 1, 2025, to use the design-build method for contracts in excess of $1 million to procure both design and construction services from a single company before the development of complete plans and specifications. Under design-build, the owner contracts with a single entity—which can be a single firm, a consortium, or a joint venture—to design and construct a project. Before inviting bids, the owner prepares documents that describe the basic concept of the project, as opposed to a complete set of drawings and specifications of the final product. In the bidding phase, the owner typically evaluates bids on a best-value basis, incorporating technical factors, such as qualifications and design quality, in addition to price. The Department of General Services, the California Department of Corrections and Rehabilitation, cities, counties, transit districts, special districts operating wastewater, water recycling, or solid waste management facilities, and certain health care districts may use design-build.
Originally the authorizations for state agencies and local governments to use design-build were dispersed throughout state law in separate code sections. In 2014, the Legislature consolidated these provisions into consistent, generally-applicable statutes (SB 785, Wolk, 2014). SB 785 outlines a standardized design-build procurement process in which the awarding authority may prepare a list of qualified or short-listed entities, based on specified criteria. Once a list of qualified or short-listed entities is complete, the awarding authority may prepare a request for proposals (RFP) that invites prequalified or short-listed entities to submit competitive sealed proposals in the manner prescribed by the awarding authority.
For projects utilizing low bid as the selection method, the competitive bidding process must involve lump-sum bids by the prequalified or short-listed design-build entities. Awards must be made to the design-build entity that is the lowest responsible bidder.
For those projects utilizing best value as a selection method, proposals must be evaluated using only the criteria and selection procedures specifically identified in the RFP. The awarding authority may reserve the right to request revisions and conduct negotiations with responsive proposers, if the authority specifies in the RFP how it will ensure that negotiations are conducted in good faith. The authority may hold discussions or negotiations with responsive proposers using the process specified in the RFP. Responsive proposers are ranked based on value provided. The contract must be awarded to the responsible design-build entity whose proposal is determined by the authority to have offered the best value to the public. Upon issuance of a contract award, the awarding authority shall publicly announce its award, identifying the design-build entity to which the award is made, along with a written decision supporting its contract award and stating the basis of the award.
The state’s design-build statutes also impose requirements for the use of skilled labor, the issuance of performance bonds, insurance coverage, and identification of subcontractors that will complete at least one-half of 1% of the value of a contract.
Local agencies may also use “construction manager at risk” contracting, which allows local officials to retain a construction manager, who provides pre-construction services during the design period, later becomes the general contractor during the construction process, and is responsible for delivering the project within an agreed upon price, potentially assuming the risk for cost-overruns (SB 328, Knight, 2013).
CALFED Surface Storage Projects. In response to increasing environmental concerns and water supply restrictions in the Sacramento-San Joaquin Delta (the Delta), state and federal agencies created CALFED in 1994. In 2000, the parties to CALFED signed the CALFED Record of Decision, which laid out the agencies’ commitment to water supply reliability, ecosystem restoration, water quality improvements, and levee system integrity. Constructing new dams upstream of the Delta was a cornerstone of CALFED. The Record of Decision identified numerous surface storage projects, including three that could potentially be built by local agencies, specifically:
- Sites Reservoir, off of the Sacramento River in Glenn and Colusa Counties. Sites Reservoir would be constructed by the Sites Joint Powers Authority, comprising the County of Colusa, County of Glenn, Glenn-Colusa Irrigation District, Maxwell Irrigation District, Reclamation District 108, Tehama-Colusa Canal Authority, and Yolo County Flood Control and Water Conservation District;
- Temperance Flat Reservoir, along the Upper San Joaquin River. Temperance Flat would be constructed by the San Joaquin Valley Water Infrastructure Authority, comprising the Counties of Fresno, Kern, Kings, Madera, Merced, and Tulare;
- Los Vaqueros Expansion Project, which would expand an existing reservoir in Contra Costa County that diverts water from the Delta. Contra Costa Water District currently operates Los Vaqueros.
Proposition 1. Proposition 1, approved by voters in November 2014, authorized the sale of $7.5 billion in general obligation bonds for various types of water and environmental restoration projects. Of that amount, Proposition 1 allocates $2.7 billion to the Water Commission for competitive grants for water storage projects, including any of the following:
- Surface storage projects identified in the CALFED Record of Decision, except projects prohibited by the California Wild and Scenic Rivers Act.
- Groundwater storage projects and groundwater contamination prevention or remediation projects that provide water storage benefits.
- Conjunctive use and reservoir reoperation projects.
- Local and regional surface storage projects that improve the operation of water systems in the state and provide public benefits.
Projects will be selected based on the magnitude of public benefits the projects provide, as defined by Proposition 1. Some local agencies want to be able to use alternative procurement methods to construct and operate projects funded by Proposition 1.
Proposed Law
Assembly Bill 2551 allows any surface storage project that is identified in the CALFED Record of Decision and receives funding from the water storage funding allocation in Proposition 1 to use design-build, design-bid-build, and construction manager at-risk alternative procurement methods. Specifically, AB 2551 reenacts, in a separate code section, the provisions of current law governing local agency authority to use design-build procurement, except that AB 2551:
- Authorizes design-build-operate agreements where existing law expressly prohibits this type of procurement.
- Requires at least 50 percent of the skilled workforce at every tier of the contract or project to be graduates of an apprenticeship program by the fourth year of project construction, where existing statute requires at least 60 percent by January 1, 2020.
- Omits a provision in existing law that prevents materials not subject to the California Public Records Act from being inspected by the public and further provides that a local agency must make the list of prequalified entities available to the public.
- Requires a local agency that evaluates bids to consider numerous additional factors as compared to existing law, such as financial and bonding capacity requirements, proposed construction approach and methods, ability to meet a schedule, proposed risk allocation and sharing, and safety record.
- Omits a requirement in existing law that any design-build project list and exclusively use subcontractors that will perform special services for more than one-half of one percent of the value of the prime contractor’s bid.
- Omits a requirement in existing law that limits the retention proceeds withheld by the agency from the design-build entity to no more than 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.
- Makes other technical and conforming changes to encompass construction manager at-risk and design-build-operate procurement methods.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill. Historically, water projects built by local agencies have been limited to the design-bid-build delivery method. While there are benefits to this process, such as an impartial design team and builders bidding on the same design, there are also several drawbacks. Unexpected costs may arise during construction due to change orders or other unanticipated complications. Alternative delivery methods, on the other hand, can be more cost effective when used to procure large, complex projects because these methods give contractors the freedom to develop clever solutions to problems and transfer the risk of overruns from the public agency to the contractor. Proposition 1 is expected to provide funding to several large surface storage projects identified by CALFED in 2000. These projects are expected to cost billions of dollars and often include complex geological studies, making them prime candidates for design-build or other procurement methods. AB 2551 provides local agencies the necessary authorization to use these methods, thereby ensuring timely construction of much-needed new dams and helping stretch taxpayer dollars to fund more projects.
2. Design-build, by design. SB 785 was enacted precisely to harmonize the state’s design-build authorizations that had been scattered across sections of code. The particulars of SB 785 were carefully negotiated to balance the interests of project proponents, labor unions, contractors, and subcontractors. AB 2551 upsets this balance by enacting similar—but not identical—design-build authority for certain surface storage projects. Although proponents may argue that these projects are unique and therefore warrant unique authority, AB 2551 sets a precedent for carving out exceptions to the generally applicable design-build statutes. Furthermore, by enacting a separate code section, AB 2551 makes it difficult to identify which entities may procure projects using design-build and to ensure that future changes to design-build authorization are enacted consistently for all entities. The Committee may wish to consider amending AB 2551 to add CALFED storage projects (or all projects that receive storage funding from Proposition 1) to the existing design-build statutes, instead of creating a parallel process.
3. Local agency, multinational corporation. Critics of the use of design-build by public agencies note that the entities that typically design and construct these projects are large, sophisticated engineering companies that possess specialized expertise in this area. These companies may be in a better position than a local agency project proponent to understand the conditions of the contracts governing the agreement—and how those contracts allocate risks between the design-build entity and the local government. It is unclear whether the local agencies that might make use of the authority granted by AB 2551 have the competencies necessary to effectively structure a contract and oversee the project delivery.
4. Level playing field. Several types of water storage projects are eligible for funding under Proposition 1, including groundwater storage projects that may be cheaper on a per-acre-foot basis than surface storage. But AB 2551 only allows CALFED projects procured by local agencies to use alternative procurement methods. To the extent that this authority reduces costs or increases the certainty and timeliness of project benefits for surface storage projects, AB 2551 may provide an advantage to CALFED surface projects constructed by local agencies over other projects that are also competing for Proposition 1 dollars. In order to ensure a level playing field for all potential projects, the Committee may wish to amend AB 2551 to apply to any projects that receive funding under the storage funding allocation in Proposition 1.
5. Technical amendments. The Committee may wish to consider the following technical amendments:
- On page 2, line 18, the bill authorizes the use of construction management at risk. Elsewhere in the Public Contract Code, this method of procurement is called construction manager at-risk. The Committee may wish to consider amending AB 2551 to correct “management” to “manager.”
- On page 7, line 30, the bill provides that “pursuant to subdivision (d), the local agency may hold discussions or negotiations with responsive bidders...” But in the bill subdivision (e) lays out the process for negotiations with bidders. The Committee may wish to consider amending AB 2551 to correct this cross-reference.
6. Related legislation. SB 693 (Hueso), currently pending in the Assembly Appropriations Committee, deletes "skilled and trained workforce" requirements in various sections of existing law related to alternative procurement methods and enacts a new comprehensive section of the Public Contract Code applicable whenever a public entity is required to ensure that contractors use a “skilled and trained workforce.”
7. Mandate. The California Constitution generally requires the state to reimburse local agencies for their costs when the state imposes new programs or additional duties on them. AB 2551 requires bidders to certify specified information under penalty of perjury. By expanding the crime of perjury, AB 2551 creates a new state-mandated program. But the bill disclaims the state's responsibility for reimbursing local governments for enforcing these new crimes. That's consistent with the California Constitution, which says that the state does not have to reimburse local governments for the costs of new crimes (Article XIIIB, 6[a][2]).
Assembly Actions
Assembly Water, Parks, and Wildlife Committee: 13-1
Assembly Appropriations Committee: 20-0
Assembly Floor: 73-1
Support and Opposition
(6/23/16)
Support: American Council of Engineering Companies, California; Association of California Water Agencies; California Chapters of the National Electrical Contractors Association; California Cotton Ginners and Growers Associations; California Fresh Fruit Association; California Legislative Conference of Plumbing, Heating and Piping Industry; California Rice Commission; California-Nevada Conference of Operating Engineers; Far West Equipment Dealers Association; Five Counties Central Labor Council; General Teamsters Professional, Heath Care and Public Employees Local 137; International Brotherhood of Electrical Workers, Local 659; Marysville Central Labor Council, AFL-CIO; Northern California Water Association; Northeastern California Building & Construction Trades Council; Sheet Metal Workers’ Local Union No. 104; Sites Project Joint Powers Authority; State Building and Construction Trades Council; United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry, Local 228; Valley Ag Water Coalition; Western Agricultural Processors Association.
Opposition: Air Conditioning Trade Association; Associated Builders and Contractors; Plumbing-Heating-Cooling Contractors Association; Professional Engineers in California Government; Sierra Club California; Western Electrical Contractors Association.
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 2551
Author:(Gallagher, et al.)
As Amended Ver:April 27, 2016
Majority vote
Committee | Votes | Ayes | Noes |
Water | 13-1 | Levine, Gallagher, Bigelow, Dodd, Eggman, Cristina Garcia, Eduardo Garcia, Gomez, Lopez, Mathis, Olsen, Salas, Williams | Medina |
Appropriations | 20-0 | Gonzalez, Bigelow, Bloom, Bonilla, Bonta, Calderon, Patterson, Daly, Eggman, Gallagher, Eduardo Garcia, Roger Hernández, Holden, Jones, Obernolte, Quirk, Santiago, Wagner, Weber, Wood |
SUMMARY: Authorizes alternative contracting methods for surface storage projects that receive Proposition 1 funding and conditions the use of alternative project delivery methods on meeting specific solicitation, qualification, and selection requirements. Specifically, this bill:
- Authorizes the use of construction management at-risk, design-build, or design-build-operate project delivery methods for Proposition 1 funded surface storage projects.
- Specifies the process by which a local agency will solicit bids on a project.
- Prohibits a bidder from prequalifying unless they use a skilled and trained workforce, as defined.
- Requires the local agency to make a list of prequalified bidders available to the public.
- Specifies the bid selection process to be made from the pool of prequalified bidders.
EXSITING LAW:
- Authorizes in various ways the use of alternative project delivery methods for state and local agencies.
- Makes the surface storage projects identified in the CALFED Bay-Delta Program Record of Decision, except projects prohibited by the California Wild and Scenic Rivers Act, eligible for $2.7 billion in funding continuously appropriated to the California Water Commission (CWC) under Proposition 1.
FISCAL EFFECT: According to the Assembly Appropriations Committee, there are unknown future costs or savings depending on the outcomes of the projects selected for alternative project delivery. Given that these are likely to be large, complex projects, the costs or savings could be significant.
COMMENTS: The traditional public works contracting method is known as design-bid-build, whereby project design is done under contract by an architectural/engineering firm, then upon completion of the design phase, the construction phase is put out to bid and the contract is awarded to the lowest responsible bidder.
Increasing use of alternative project delivery methods have been occurring in the public sector over the last 15 years. Research on alternative project delivery methods have shown these methods can lead to greater flexibility and accountability, higher quality, faster completion and lower overall project costs.
This bill authorizes the use of alternative methods of project delivery for surface storage projects that receive Proposition 1 funding. This bill does not alter the requirements currently required under Proposition 1. It lays out the specific process by which a project could utilize the alternative methods. Only after meeting the requirements of Proposition 1, receiving Proposition 1 funding, and meeting the solicitation and evaluation requirements in this bill, will a surface storage project be able to utilize alternative project delivery methods.
Proposition 1 authorizes the CWC to pay up to half of the cost of new water storage projects, including dams and projects that replenish groundwater. This funding can only be used to cover costs related to the "public benefits" associated with water storage projects, including restoring habitats, improving water quality, reducing damage from floods, responding to emergencies, and improving recreation.
Concerns have been raised by opponents that water storage projects are particularly complex, expensive projects that are not appropriate for alternative procurement. The potential failure of a large storage project could have catastrophic public safety and economic consequences. There is the potential that this bill eliminates competitive bidding, allows a private contractor or consortium to inspect and sign off on their own work, and could increase project delivery costs in some circumstances.
Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096 FN: 0003039
Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 2551
Author:(Gallagher) – As Amended Ver:April 27, 2016
Policy Committee: | Water, Parks and Wildlife | Vote: | 13 - 1 |
Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill authorizes alternative contracting methods for surface storage projects that receive Proposition 1 funding and conditions the use of alternative project delivery methods on meeting specific solicitation, qualification, and selection requirements. Specifically, this bill:
- Authorizes the use of construction management at-risk (CMAR), design-build, or design-build-operate (DBO) project delivery methods for Proposition 1 funded surface storage projects.
- Specifies the process by which a local agency will solicit bids on a project.
- Prohibits a bidder to prequalify unless they use a skilled and trained workforce, as defined.
- Requires the local agency to make a list of prequalified bidders available to the public.
- Specifies the bid selection process to be made from the pool of prequalified bidders.
FISCAL EFFECT:
Unknown future costs or savings depending on the outcomes of the projects selected for alternative project delivery, as opposed to other procurement methods that might have been used on those projects. Any cost or benefit of a specific contracting method will depend on each individual project. Given that these are likely to be large, complex projects, the costs or savings could be significant.
COMMENTS:
- Purpose. The traditional public works contracting method is known as design-bid-build, whereby project design is done under contract by an architectural/engineering firm, then upon completion of the design phase, the construction phase is put out to bid and the contract is awarded to the lowest responsible bidder.
Increasing use of alternative project delivery methods have been occurring in the public sector over the last 15 years. Research on alternative project delivery methods have shown these methods can lead to greater flexibility and accountability, higher quality, faster completion and lower overall project costs.
This bill authorizes the use of three alternative methods of project delivery for surface storage projects that receive Proposition 1 funding. The bill does not alter the requirements currently required under Proposition 1. It lays out the specific process by which a project could utilize the alternative methods. Only after meeting the requirements of Proposition 1, receiving Proposition 1 funding, and meeting the solicitation and evaluation requirements in this bill, will a surface storage project be able to utilize alternative project delivery methods.
- Background on alternative project delivery. Design-build has become a more widely used alterative to the traditional design-bid-build model. Under design-build, the public agency enters into a single contract with an entity responsible for both project design and construction. In 2014, state law enacted uniform provisions for the Department of General Services, the California Department of Corrections and Rehabilitation, and specified local agencies using the design-build method.
Design-build-operate (DBO) grants a single contract agreement to a private entity that is chosen to design, construct and operate the project while the municipality retains ownership. In a DBO, the private entity must focus on both short-term and long-term cost savings and efficiencies because the company will ultimately be responsible for the project over the next 10 to 20 years.
Construction Management At-Risk (CMAR) is a delivery method where the construction manager acts as the consultant in the development and design phases and acts as the equivalent of a general contractor during the construction phase. Under CMAR, the construction manager commits to deliver the project within a Guaranteed Maximum Price (GMP). The CMAR must manage and control construction costs because any costs exceeding the GMP that are not change orders are the financial liability of the CMAR.
- Background on surface storage projects. AB 1471 (Rendon), Chapter 188, Statutes of 2014, placed Proposition 1, a $7.545 billion general obligation bond for water-related projects and programs on the November 4, 2014, ballot where it passed with 67% of the vote.
Proposition 1 continuously appropriates $2.7 billion to the California Water Commission (CWC) to pay up to half of the cost of new water storage projects, including dams and projects that replenish groundwater. This funding can only be used to cover costs related to the “public benefits” associated with water storage projects, including restoring habitats, improving water quality, reducing damage from floods, responding to emergencies, and improving recreation. Local governments and other entities that rely on the water storage project would be responsible for paying the remaining project costs. These costs would generally be associated with private benefits (such as water provided to their customers). The CWC is currently developing guidelines and investment strategies for the water storage funds.
- Opposition. The Professional Engineers in California Government (PECG) are opposed to this bill. According to PECG, water storage projects are particularly complex, expensive projects. The potential failure of a large storage project could have catastrophic public safety and economic consequences. PECG is concerned the bill eliminates competitive bidding, allows the private contractor or consortium to inspect and sign off on their own work, and greatly increases project delivery costs in many circumstances. PECG states these are risky alternative procurement methodologies and are not appropriate for water storage projects.
Analysis Prepared by: Misty Feusahrens / APPR. / (916) 319-2081
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
ABPCA Bill Id:AB 2551 (
Author:Gallagher) – As Introduced Ver:April 5, 2016
SUBJECT: Surface storage: contracts
SUMMARY: Authorizes alternative contracting methods for surface storage projects that receive Proposition 1funding. Conditions the use of alternative project delivery methods on meeting specific solicitation, qualification, and selection requirements. Specifically, this bill:
- Authorizes the use of construction management at-risk, design-build, public-private partnership or design-build-operate project delivery methods for Proposition 1 funded surface storage projects.
- Specifies the process by which a local agency will solicit bids on a project.
- Prohibits a bidder to prequalify unless they use a skilled and trained workforce, as defined.
- Requires the local agency to make a list of prequalified bidders available to the public.
- Specifies the bid selection process to be made from the pool of prequalified bidders.
EXISTING LAW:
- In various ways authorizes the use of alternative project delivery methods for state and local agencies.
- Establishes a Sacramento-San Joaquin Delta policy that among other things lists expanded statewide water storage as an objective.
- Makes surface storage projects identified in the CALFED Bay-Delta Program Record of Decision, except projects prohibited by the California Wild and Scenic Rivers Act, eligible for $2.7 billion funding continuously appropriated to the Water Commission under Proposition 1.
FISCAL EFFECT: Unknown
COMMENTS: Authorizes alternative contracting methods for surface storage projects that receive Proposition 1 funding.
- Author’s Statement: This bill would allow eligible projects, including Sites Reservoir, expanding Los Vaqueros Reservoir, Temperance Flat dam, and in-delta storage projects to utilize alternative delivery methods. Authorizing these water storage projects to utilize alternative delivery methods will help expedite these projects and increase our water storage capacity. Authorizing alternative methods of contracting also gives these projects the needed flexibility to ensure the best possible use of the public’s money.
- Background:
Alternative delivery methods
Increasing use of alternative project delivery methods have been occurring in the public sector over the last 15 years. The adoption of alternative project delivery has been driven by benefits that the private sector has achieved from these methods. Any benefit or downside of a specific contracting method is going to be realized on a case by case basis. Research on alternative project delivery methods have shown those methods to have all of the following benefits:
- Greater flexibility in the contracting process
- Greater accountability
- Higher quality
- Faster project completion
- Lower project costs
- Greater cost certainty
- More opportunity for innovation
It remains an open question as to what delivery method is best for a given project, but it seems that expanding project delivery methods with parameters can be beneficial.
Status of Surface Storage
Proposition 1 appropriated $2.7 billion to the Water Commission for storage. Those funds are available for all of the following projects:
- Surface storage projects identified in the CALFED Bay-Delta Program Record of Decision, except projects prohibited by the California Wild and Scenic Rivers Act.
- Groundwater storage projects and groundwater contamination prevention or remediation projects that provide water storage benefits.
- Conjunctive use and reservoir reoperation projects.
- Local and regional surface storage projects that improve the operation of water systems in the state and provide public benefits.
In addition to providing funding for storage, Proposition 1 conditioned funding on several requirements being met. Among those requirements a project must:
- Provide measurable improvement to the Delta ecosystem or to the tributaries to the Delta.
- Create ecosystem improvements that contribute to restoration of aquatic ecosystems and native fish and wildlife, including those ecosystems and fish and wildlife in the Delta.
- Create water quality improvements that provide significant public trust resources, or that clean up and restore groundwater resources.
Development of storage is tied to improved operations in the Delta. Surface water storage for the State Water Project and Central Valley Project is directly tied to the Delta. The origins of surface storage projects currently before the Water Commission come from CALFED Bay-Delta recommendations.
In 1994 after years of uncoordinated efforts to improve fish restoration and reliability of Delta water, state and federal agencies joined together to coordinate activities. This coordination became the CALFED Bay-Delta Program (CALFED). CALFED initiated a long-term planning process. As part of that process, CALFED considered surface storage that would allow for improved operations for water quality and water flows. In an August 28, 2000, Record of Decision CALFED identified several storage projects for further evaluation. Those identified projects were ultimately made eligible for funding under Proposition 1.
This Legislation would provide for the use of several alternative methods of project delivery for surface storage projects that receive Proposition 1 funding. The bill does not alter the requirements currently required under Proposition 1. It lays out the specific process by which a project could utilize the alternative methods. Only after meeting the requirements of Proposition 1, receiving Proposition 1 funding, and meeting the solicitation and evaluation requirements in this bill will a surface storage project be able to utilize alternative project delivery methods.
- Prior and Related Legislation:
- AB 1649 (Salas) 2016, establishes a state policy to prioritize funding surface storage. AB 1649 is currently pending in this committee.
- AB 1471 (Rendon), Chapter 188, Statutes of 2014, placed Proposition 1, a $7.545 billion general obligation bond for water-related projects and programs on the November 4, 2014, ballot where it passed with 67% of the vote.
- SB 785 (Wolk) Chapter 931, Statues of 2014, authorized the use of design-build contracting methods for state and local agencies under specific circumstances.
- AB 1329 (Wolk) Chapter 228, Statues of 2005, authorized the use of design-build contracting methods for state and local agencies under specific circumstances.
- Supporting Arguments:
Allowing public agencies to be able to consider delivery methods other than the traditional design-bid-build method, allows greater flexibility. For large complex projects multiple procurements will be needed, each having a distinct set of performance requirements and requiring different and diverse skill sets. Being allowed to use alternative delivery will allow the procurement to be tailored to achieve greater efficiencies.
- Opposing Arguments:
Projects eligible for Water Bond funding must be able to deliver public benefits. Alternative delivery methods involve beginning construction before a design is finalized. This cannot guarantee public benefits will accrue, and may lead to impacts not included in an Environmental Impact Report (EIR) required under the California Environmental Quality Act (CEQA). Under CEQA, a project must account for its impacts and mitigate those effects before a project can be approved. Alternative delivery methods feature vague planning. Such vague planning may mask impacts during the EIR process, and changes after approval may lead to unmitigated impacts.
REGISTERED SUPPORT / OPPOSITION:
Support
Sites Project Joint Powers Authority
Teamsters Local 137
Opposition
Sierra Club California
Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096
