AB 427: Otay Mesa East Toll Facility Act: alternative project delivery method.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2023-09-08
Current Status:
Passed
(2023-09-08: Chaptered by Secretary of State - Chapter 163, Statutes of 2023.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
The Otay Mesa East Toll Facility Act authorizes the San Diego Association of Governments (SANDAG) to carry out a construction project for the State Highway Route 11 corridor, including, among other things, highway improvements and international border crossing facilities, to be operated as a toll facility. Existing law authorizes the use of alternative bidding and building procedures for a project or components of a project after SANDAG commences a comparison of the traditional design-bid-build process of construction with the proposed alternative project delivery method in a public meeting and if the governing board of SANDAG makes written findings that use of an alternative project delivery method on the specific project or project component under consideration will accomplish at least one of 3 specified objectives. Existing law requires the design-bid-build method of project construction for the project or project components if these conditions are not met.
This bill would provide that SANDAG is no longer required to use the design-bid-build delivery method for construction of a project if specified conditions for utilizing an alternative delivery method are not met. This bill would authorize SANDAG to use the Construction Manager/General Contractor method (CMGC), as defined, as an additional alternative project delivery method. The bill would impose specified requirements on SANDAG and a construction manager, as defined, if they enter into a CMGC contract for alternative project delivery.
This bill would declare that it is to take effect immediately as an urgency statute.
The Otay Mesa East Toll Facility Act authorizes the San Diego Association of Governments (SANDAG) to carry out a construction project for the State Highway Route 11 corridor, including, among other things, highway improvements and international border crossing facilities, to be operated as a toll facility. Existing law authorizes the use of alternative bidding and building procedures for a project or components of a project after SANDAG commences a comparison of the traditional design-bid-build process of construction with the proposed alternative project delivery method in a public meeting and if the governing board of SANDAG makes written findings that use of an alternative project delivery method on the specific project or project component under consideration will accomplish at least one of 3 specified objectives. Existing law requires the design-bid-build method of project construction for the project or project components if these conditions are not met.
This bill would provide that SANDAG is no longer required to use the design-bid-build delivery method for construction of a project if specified conditions for utilizing an alternative delivery method are not met. This bill would authorize SANDAG to use the Construction Manager/General Contractor method (CMGC), as defined, as an additional alternative project delivery method. The bill would impose specified requirements on SANDAG and a construction manager, as defined, if they enter into a CMGC contract for alternative project delivery.
This bill would declare that it is to take effect immediately as an urgency statute.
The Otay Mesa East Toll Facility Act authorizes the San Diego Association of Governments (SANDAG) to carry out a construction project for the State Highway Route 11 corridor, including, among other things, highway improvements and international border crossing facilities, to be operated as a toll facility. Existing law authorizes the use of alternative bidding and building procedures for a project or components of a project after SANDAG commences a comparison of the traditional design-bid-build process of construction with the proposed alternative project delivery method in a public meeting and if the governing board of SANDAG makes written findings that use of an alternative project delivery method on the specific project or project component under consideration will accomplish at least one of 3 specified objectives. Existing law requires the design-bid-build method of project construction for the project or project components if these conditions are not met.
This bill would provide that SANDAG is no longer required to use the design-bid-build delivery method for construction of a project if specified conditions for utilizing an alternative delivery method are not met. This bill would authorize SANDAG to use the Construction Manager/General Contractor method (CMGC), as defined, as an additional alternative project delivery method. The bill would impose specified requirements on SANDAG and a construction manager, as defined, if they enter into a CMGC contract for alternative project delivery.
This bill would declare that it is to take effect immediately as an urgency statute.
The Otay Mesa East Toll Facility Act authorizes the San Diego Association of Governments (SANDAG) to carry out a construction project for the State Highway Route 11 corridor, including, among other things, highway improvements and international border crossing facilities, to be operated as a toll facility. Existing law authorizes the use of alternative bidding and building procedures for a project or components of a project after SANDAG commences a comparison of the traditional design-bid-build process of construction with the proposed alternative project delivery method in a public meeting and if the governing board of SANDAG makes written findings that use of an alternative project delivery method on the specific project or project component under consideration will accomplish at least one of 3 specified objectives. Existing law requires the design-bid-build method of project construction for the project or project components if these conditions are not met.
This bill would provide that SANDAG is no longer required to use the design-bid-build delivery method for construction of a project if specified conditions for utilizing an alternative delivery method are not met. This bill would authorize SANDAG to use the Construction Manager/General Contractor method (CMGC), as defined, as an additional alternative project delivery method. The bill would impose specified requirements on SANDAG and a construction manager, as defined, if they enter into a CMGC contract for alternative project delivery.
For purposes of this chapter, the following definitions shall apply:
(a)Best value means a value determined by evaluation of objective criteria that relate to price, features, functions, life-cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the interests of the local agency and meeting the objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors.
(b)Board means the board of directors of SANDAG.
(c)Bonds means any bonds, notes, variable rate and variable maturity securities, and any other evidence of indebtedness issued pursuant to this chapter.
(d)Construction Manager/General Contractor method or CMGC means a project delivery method using a best value procurement process in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.
(e)Construction manager means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a CMGC contract.
(f)Corridor means State Route 11 in the County of San Diego, as defined in Section 311.
(g)Costs includes the cost of construction or acquisition; the cost of the acquisition of all land, rights-of-way, property, rights, easements, and interests acquired by SANDAG for the construction; the cost of demolishing or removing any buildings or structures on land acquired, including the cost of acquiring any lands to which buildings or structures may be moved; the cost of all machinery and equipment, financing charges, interest before and during construction and, if considered advisable by SANDAG, costs of accounting, consulting, printing, advertising, and travel, cost of traffic estimates and of engineering and legal services, plans, specifications, surveys, estimates of cost and of revenues, and other expenses necessary or incident to determining the feasibility or practicability of constructing, repairing, or improving a project; administrative expenses; and such other expenses as may be necessary or incident to the construction, repair, or improvement of a project, the financing of the project, the placing and maintaining of a project in operation, and any payments to an entity to cover all or a portion of the costs described in this chapter. Any money paid or advanced to SANDAG with its approval for traffic surveys, borings, preparation of plans and specifications, and other engineering services in connection with the construction, repair, or improvement of a project shall be regarded as a part of the cost of a project and may be reimbursed out of the proceeds of the revenue bonds issued for a project as authorized in this chapter. Cost includes the cost to operate, maintain, repair, or improve a project.
(h)Department means the Department of Transportation.
(i)Design-build means a procurement process in which both the design and construction of a project are procured in a single phase.
(j)Design sequencing means a procurement process that enables the sequencing of design activities to permit each construction phase to commence when design for that phase is complete, instead of requiring the design for the entire project to be completed before commencing construction.
(k)Entity means the United States or any agency or department of the United States, any State of California agency, department or political subdivision of the state, or any public or private corporation, company, partnership, joint venture, foundation, trust, estate, individual, or other legal business organization.
(l)Federal agency means any agency or department of the United States.
(m)Project or projects means any property and related facilities, whether or not now in existence, acquired or constructed to facilitate the movement of goods and people along the corridor or at the Otay Mesa East Port of Entry, including property suitable for any of the following purposes:
(1)International ports of entry.
(2)International border crossing facilities.
(3)Transportation facilities, including highway and roadway, public transit, and nonmotorized facilities, and other projects supporting any transportation facility.
(4)A bridge or tunnel, overpasses, underpasses, entrance plazas, toll houses, administration, storage and other buildings and facilities, and all equipment therefor, and may include terminal facilities, customs and immigration facilities, and such approaches and approach highways as may be determined by SANDAG to be necessary to facilitate the flow of traffic or to connect a project with the existing highway systems, together with all property, rights, easements, and interests acquired by SANDAG for the construction or operation of a project, including, but not limited to, energy and communication lines.
(n)Property means land, improvements to land, buildings, improvements to buildings, machinery and equipment of any kind, operating capital, and any other real or personal property necessary for a project.
(o)SANDAG means the San Diego Association of Governments, as referenced in the San Diego Regional Transportation Consolidation Act, Chapter 3 (commencing with Section 132350) of Division 12.7 of the Public Utilities Code.
(p)Toll means a toll, fee, or other charge for entrance to or use of the corridor and such toll, fee, or other charge as may be governed by an agreement under Section 31483.
(q)Trustee means any financial institution or trust company actually doing business in this state.
SEC. 2.Section 31468 of the Streets and Highways Code is amended to read:31468.(a)The Legislature has recognized the merits of alternative project delivery methods in the past by authorizing their use for projects undertaken by school districts, the University of California, specified local government projects, state office buildings, and public transit projects.
(b)It is the intent of the Legislature to provide optional, alternative procedures for delivering the project and its components pursuant to this act. SANDAG may enter into an alternative project delivery method contract authorized in this section on a project or any project component, after comparison of the traditional design, bid, and build process of construction with the proposed alternative project delivery method in a public meeting, if the governing board makes written findings that use of an alternative project delivery method on the specific project or project component under consideration will accomplish at least one of the following objectives: reduce comparable project costs, expedite a projects completion, or provide features not achievable through the traditional design-bid-build method.
(c)SANDAG may utilize the following alternative project delivery methods if the conditions in this section are met:
(1)Design-build.
(2)Design sequencing.
(3)Construction Manager/General Contractor (CMGC).
(d)(1)If a contract for CMGC services is entered into pursuant to this chapter and includes preconstruction services by the construction manager, SANDAG shall enter into a written contract with the construction manager for the preconstruction services, under which SANDAG shall pay the construction manager a fee for preconstruction services in an amount agreed upon by SANDAG and the construction manager. The preconstruction services contract may include fees for services to be performed during the contract period, provided that SANDAG shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after SANDAG has entered into a services contract. A preconstruction services contract shall provide for the subsequent negotiation for construction of all or any discrete phase or phases of the project and shall provide for SANDAG to own the design plans and other preconstruction services work products.
(2)A contract for construction services may be awarded after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. In the event that a fixed price or a guaranteed maximum price is not successfully negotiated, SANDAG may award the contract for construction services utilizing any other procurement method authorized by law.
(3)The construction manager shall perform not less than 30 percent of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors pursuant to Section 6955 of the Public Contract Code.
(e)It is the intent of the Legislature that alternative project delivery methods as authorized in this section shall not be construed to extend, limit, or change in any manner the legal responsibility of public agencies and contractors to comply with existing laws.
SEC. 3.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order for state and local governments to meet critical deadlines and stakeholder agreements on a project of regional, statewide, and national significance in partnership with the federal government, while protecting worker and public safety, it is necessary that this act take effect immediately.
For purposes of this chapter, the following definitions shall apply:
(a)Best value means a value determined by evaluation of objective criteria that relate to price, features, functions, life-cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the interests of the local agency and meeting the objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors.
(b)Board means the board of directors of SANDAG.
(c)Bonds means any bonds, notes, variable rate and variable maturity securities, and any other evidence of indebtedness issued pursuant to this chapter.
(d)Construction Manager/General Contractor method or CMGC means a project delivery method using a best value procurement process in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.
(e)Construction manager means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a CMGC contract.
(f)Corridor means State Route 11 in the County of San Diego, as defined in Section 311.
(g)Costs includes the cost of construction or acquisition; the cost of the acquisition of all land, rights-of-way, property, rights, easements, and interests acquired by SANDAG for the construction; the cost of demolishing or removing any buildings or structures on land acquired, including the cost of acquiring any lands to which buildings or structures may be moved; the cost of all machinery and equipment, financing charges, interest before and during construction and, if considered advisable by SANDAG, costs of accounting, consulting, printing, advertising, and travel, cost of traffic estimates and of engineering and legal services, plans, specifications, surveys, estimates of cost and of revenues, and other expenses necessary or incident to determining the feasibility or practicability of constructing, repairing, or improving a project; administrative expenses; and such other expenses as may be necessary or incident to the construction, repair, or improvement of a project, the financing of the project, the placing and maintaining of a project in operation, and any payments to an entity to cover all or a portion of the costs described in this chapter. Any money paid or advanced to SANDAG with its approval for traffic surveys, borings, preparation of plans and specifications, and other engineering services in connection with the construction, repair, or improvement of a project shall be regarded as a part of the cost of a project and may be reimbursed out of the proceeds of the revenue bonds issued for a project as authorized in this chapter. Cost includes the cost to operate, maintain, repair, or improve a project.
(h)Department means the Department of Transportation.
(i)Design-build means a procurement process in which both the design and construction of a project are procured in a single phase.
(j)Design sequencing means a procurement process that enables the sequencing of design activities to permit each construction phase to commence when design for that phase is complete, instead of requiring the design for the entire project to be completed before commencing construction.
(k)Entity means the United States or any agency or department of the United States, any State of California agency, department or political subdivision of the state, or any public or private corporation, company, partnership, joint venture, foundation, trust, estate, individual, or other legal business organization.
(l)Federal agency means any agency or department of the United States.
(m)Project or projects means any property and related facilities, whether or not now in existence, acquired or constructed to facilitate the movement of goods and people along the corridor or at the Otay Mesa East Port of Entry, including property suitable for any of the following purposes:
(1)International ports of entry.
(2)International border crossing facilities.
(3)Transportation facilities, including highway and roadway, public transit, and nonmotorized facilities, and other projects supporting any transportation facility.
(4)A bridge or tunnel, overpasses, underpasses, entrance plazas, toll houses, administration, storage and other buildings and facilities, and all equipment therefor, and may include terminal facilities, customs and immigration facilities, and such approaches and approach highways as may be determined by SANDAG to be necessary to facilitate the flow of traffic or to connect a project with the existing highway systems, together with all property, rights, easements, and interests acquired by SANDAG for the construction or operation of a project, including, but not limited to, energy and communication lines.
(n)Property means land, improvements to land, buildings, improvements to buildings, machinery and equipment of any kind, operating capital, and any other real or personal property necessary for a project.
(o)SANDAG means the San Diego Association of Governments, as referenced in the San Diego Regional Transportation Consolidation Act, Chapter 3 (commencing with Section 132350) of Division 12.7 of the Public Utilities Code.
(p)Toll means a toll, fee, or other charge for entrance to or use of the corridor and such toll, fee, or other charge as may be governed by an agreement under Section 31483.
(q)Trustee means any financial institution or trust company actually doing business in this state.
SEC. 2.Section 31468 of the Streets and Highways Code is amended to read:31468.(a)The Legislature has recognized the merits of alternative project delivery methods in the past by authorizing their use for projects undertaken by school districts, the University of California, specified local government projects, state office buildings, and public transit projects.
(b)It is the intent of the Legislature to provide optional, alternative procedures for delivering the project and its components pursuant to this act. SANDAG may enter into an alternative project delivery method contract authorized in this section on a project or any project component, after comparison of the traditional design, bid, and build process of construction with the proposed alternative project delivery method in a public meeting, if the governing board makes written findings that use of an alternative project delivery method on the specific project or project component under consideration will accomplish at least one of the following objectives: reduce comparable project costs, expedite a projects completion, or provide features not achievable through the traditional design-bid-build method.
(c)SANDAG may utilize the following alternative project delivery methods if the conditions in this section are met:
(1)Design-build.
(2)Design sequencing.
(3)Construction Manager/General Contractor (CMGC).
(d)(1)If a contract for CMGC services is entered into pursuant to this chapter and includes preconstruction services by the construction manager, SANDAG shall enter into a written contract with the construction manager for the preconstruction services, under which SANDAG shall pay the construction manager a fee for preconstruction services in an amount agreed upon by SANDAG and the construction manager. The preconstruction services contract may include fees for services to be performed during the contract period, provided that SANDAG shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after SANDAG has entered into a services contract. A preconstruction services contract shall provide for the subsequent negotiation for construction of all or any discrete phase or phases of the project and shall provide for SANDAG to own the design plans and other preconstruction services work products.
(2)A contract for construction services may be awarded after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. In the event that a fixed price or a guaranteed maximum price is not successfully negotiated, SANDAG may award the contract for construction services utilizing any other procurement method authorized by law.
(3)The construction manager shall perform not less than 30 percent of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors pursuant to Section 6955 of the Public Contract Code.
(e)It is the intent of the Legislature that alternative project delivery methods as authorized in this section shall not be construed to extend, limit, or change in any manner the legal responsibility of public agencies and contractors to comply with existing laws.
SEC. 3.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order for state and local governments to meet critical deadlines and stakeholder agreements on a project of regional, statewide, and national significance in partnership with the federal government, while protecting worker and public safety, it is necessary that this act take effect immediately.
For purposes of this chapter, the following definitions shall apply:
(a)Best value means a value determined by evaluation of objective criteria that relate to price, features, functions, life-cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the interests of the local agency and meeting the objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors.
(b)Board means the board of directors of SANDAG.
(c)Bonds means any bonds, notes, variable rate and variable maturity securities, and any other evidence of indebtedness issued pursuant to this chapter.
(d)Construction Manager/General Contractor method or CMGC means a project delivery method using a best value procurement process in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.
(e)Construction manager means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a CMGC contract.
(f)Corridor means State Route 11 in the County of San Diego, as defined in Section 311.
(g)Costs includes the cost of construction or acquisition; the cost of the acquisition of all land, rights-of-way, property, rights, easements, and interests acquired by SANDAG for the construction; the cost of demolishing or removing any buildings or structures on land acquired, including the cost of acquiring any lands to which buildings or structures may be moved; the cost of all machinery and equipment, financing charges, interest before and during construction and, if considered advisable by SANDAG, costs of accounting, consulting, printing, advertising advertising, and travel, cost of traffic estimates and of engineering and legal services, plans, specifications, surveys, estimates of cost and of revenues, and other expenses necessary or incident to determining the feasibility or practicability of constructing, repairing, or improving a project; administrative expenses; and such other expenses as may be necessary or incident to the construction, repair, or improvement of a project, the financing of the project, the placing and maintaining of a project in operation, and any payments to an entity to cover all or a portion of the costs described in this chapter. Any money paid or advanced to SANDAG with its approval for traffic surveys, borings, preparation of plans and specifications, and other engineering services in connection with the construction, repair, or improvement of a project shall be regarded as a part of the cost of a project and may be reimbursed out of the proceeds of the revenue bonds issued for a project as authorized in this chapter. Cost includes the cost to operate, maintain, repair, or improve a project.
(h)Department means the Department of Transportation.
(i)Design-build means a procurement process in which both the design and construction of a project are procured in a single phase.
(j)Design sequencing means a procurement process that enables the sequencing of design activities to permit each construction phase to commence when design for that phase is complete, instead of requiring the design for the entire project to be completed before commencing construction.
(k)Entity means the United States or any agency or department of the United States, any State of California agency, department or political subdivision of the state, or any public or private corporation, company, partnership, joint venture, foundation, trust, estate, individual, or other legal business organization.
(l)Federal agency means any agency or department of the United States.
(m)Project or projects means any property and related facilities, whether or not now in existence, acquired or constructed to facilitate the movement of goods and people along the corridor or at the Otay Mesa East Port of Entry, including property suitable for any of the following purposes:
(1)International ports of entry.
(2)International border crossing facilities.
(3)Transportation facilities, including highway and roadway, public transit, and nonmotorized facilities, and other projects supporting any transportation facility.
(4)A bridge or tunnel, overpasses, underpasses, entrance plazas, toll houses, administration, storage and other buildings and facilities, and all equipment therefor, and may include terminal facilities, customs and immigration facilities, and such approaches and approach highways as may be determined by SANDAG to be necessary to facilitate the flow of traffic or to connect a project with the existing highway systems, together with all property, rights, easements, and interests acquired by SANDAG for the construction or operation of a project, including, but not limited to, energy and communication lines.
(n)Property means land, improvements to land, buildings, improvements to buildings, machinery and equipment of any kind, operating capital, and any other real or personal property necessary for a project.
(o)SANDAG means the San Diego Association of Governments, as referenced in the San Diego Regional Transportation Consolidation Act, Chapter 3 (commencing with Section 132350) of Division 12.7 of the Public Utilities Code.
(p)Toll means a toll, fee, or other charge for entrance to or use of the corridor and such toll, fee, or other charge as may be governed by an agreement under Section 31483.
(q)Trustee means any financial institution or trust company actually doing business in this state.
SEC. 2.Section 31468 of the Streets and Highways Code is amended to read:31468.(a)The Legislature has recognized the merits of alternative project delivery methods in the past by authorizing their use for projects undertaken by school districts, the University of California, specified local government projects, state office buildings, and public transit projects.
(b)It is the intent of the Legislature to provide optional, alternative procedures for delivering the project and its components pursuant to this act. SANDAG may enter into an alternative project delivery method contract authorized in this section on a project or any project component, after comparison of the traditional design, bid, and build process of construction with the proposed alternative project delivery method in a public meeting, if the governing board makes written findings that use of an alternative project delivery method on the specific project or project component under consideration will accomplish at least one of the following objectives: reduce comparable project costs, expedite a projects completion, or provide features not achievable through the traditional design-bid-build method.
(c)SANDAG may utilize the following alternative project delivery methods if the conditions in this section are met:
(1)Design-build.
(2)Design sequencing.
(3)Construction Manager/General Contractor (CMGC).
(d)(1)If a contract for CMGC services is entered into pursuant to this chapter and includes preconstruction services by the construction manager, SANDAG shall enter into a written contract with the construction manager for the preconstruction services, under which SANDAG shall pay the construction manager a fee for preconstruction services in an amount agreed upon by SANDAG and the construction manager. The preconstruction services contract may include fees for services to be performed during the contract period, provided that SANDAG shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after SANDAG has entered into a services contract. A preconstruction services contract shall provide for the subsequent negotiation for construction of all or any discrete phase or phases of the project and shall provide for SANDAG to own the design plans and other preconstruction services work products.
(2)A contract for construction services may be awarded after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. In the event that a fixed price or a guaranteed maximum price is not successfully negotiated, SANDAG may award the contract for construction services utilizing any other procurement method authorized by law.
(3)The construction manager shall perform not less than 30 percent of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors pursuant to Section 6955 of the Public Contract Code.
(e)It is the intent of the Legislature that alternative project delivery methods as authorized in this section shall not be construed to extend, limit, or change in any manner the legal responsibility of public agencies and contractors to comply with existing laws.
SEC. 3.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order for state and local governments to meet critical deadlines and stakeholder agreements on a project of regional, statewide, and national significance in partnership with the federal government, while protecting worker and public safety, it is necessary that this act take effect immediately.
For purposes of this chapter, the following definitions shall apply:
(a)Best value means a value determined by evaluation of objective criteria that relate to price, features, functions, life-cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the interests of the local agency and meeting the objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors.
(a)(b)Board means the board of directors of SANDAG.
(b)(c)Bonds means any bonds, notes, variable rate and variable maturity securities, and any other evidence of indebtedness issued pursuant to this chapter.
(d)Construction Manager/General Contractor method or CMGC means a project delivery method using a best value procurement process in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.
(e)Construction manager means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a CMGC contract.
(c)(f)Corridor means State Route 11 in the County of San Diego, as defined in Section 311.
(d)(g)Costs includes the cost of construction or acquisition; the cost of the acquisition of all land, rights-of-way, property, rights, easements, and interests acquired by SANDAG for the construction; the cost of demolishing or removing any buildings or structures on land acquired, including the cost of acquiring any lands to which buildings or structures may be moved; the cost of all machinery and equipment, financing charges, interest before and during construction and, if considered advisable by SANDAG, costs of accounting, consulting, printing, advertising and travel, cost of traffic estimates and of engineering and legal services, plans, specifications, surveys, estimates of cost and of revenues, and other expenses necessary or incident to determining the feasibility or practicability of constructing, repairing, or improving a project; administrative expenses; and such other expenses as may be necessary or incident to the construction, repair, or improvement of a project, the financing of the project, the placing and maintaining of a project in operation, and any payments to an entity to cover all or a portion of the costs described in this chapter. Any money paid or advanced to SANDAG with its approval for traffic surveys, borings, preparation of plans and specifications, and other engineering services in connection with the construction, repair, or improvement of a project shall be regarded as a part of the cost of a project and may be reimbursed out of the proceeds of the revenue bonds issued for a project as authorized in this chapter. Cost includes the cost to operate, maintain, repair, or improve a project.
(e)(h)Department means the Department of Transportation.
(f)(i)Design-build means a procurement process in which both the design and construction of a project are procured in a single phase.
(g)(j)Design sequencing means a procurement process that enables the sequencing of design activities to permit each construction phase to commence when design for that phase is complete, instead of requiring the design for the entire project to be completed before commencing construction.
(h)(k)Entity means the United States or any agency or department of the United States, any State of California agency, department or political subdivision of the state, or any public or private corporation, company, partnership, joint venture, foundation, trust, estate, individual, or other legal business organization.
(i)(l)Federal agency means any agency or department of the United States.
(j)(m)Project or projects means any property and related facilities, whether or not now in existence, acquired or constructed to facilitate the movement of goods and people along the corridor or at the Otay Mesa East Port of Entry, including property suitable for any of the following purposes:
(1)International ports of entry.
(2)International border crossing facilities.
(3)Transportation facilities, including highway and roadway, public transit, and nonmotorized facilities, and other projects supporting any transportation facility.
(4)A bridge or tunnel, overpasses, underpasses, entrance plazas, toll houses, administration, storage and other buildings and facilities, and all equipment therefor, and may include terminal facilities, customs and immigration facilities, and such approaches and approach highways as may be determined by SANDAG to be necessary to facilitate the flow of traffic or to connect a project with the existing highway systems, together with all property, rights, easements, and interests acquired by SANDAG for the construction or operation of a project, including, but not limited to, energy and communication lines.
(k)(n)Property means land, improvements to land, buildings, improvements to buildings, machinery and equipment of any kind, operating capital, and any other real or personal property necessary for a project.
(l)(o)SANDAG means the San Diego Association of Governments, as referenced in the San Diego Regional Transportation Consolidation Act, Chapter 3 (commencing with Section 132350) of Division 12.7 of the Public Utilities Code.
(m)(p)Toll means a toll, fee, or other charge for entrance to or use of the corridor and such toll, fee, or other charge as may be governed by an agreement under Section 31483.
(n)(q)Trustee means any financial institution or trust company actually doing business in this state.
SEC. 2.Section 31468 of the Streets and Highways Code is amended to read:31468.(a)The Legislature has recognized the merits of alternative project delivery methods in the past by authorizing their use for projects undertaken by school districts, the University of California, specified local government projects, state office buildings, and public transit projects.
(b)It is the intent of the Legislature to provide optional, alternative procedures for delivering the project and its components pursuant to this act. SANDAG may utilize enter into an alternative project delivery method contract authorized in this section on a project or any project component, after comparison of the traditional design, bid, and build process of construction with the proposed alternative project delivery method in a public meeting, if the governing board makes written findings that use of an alternative project delivery method on the specific project or project component under consideration will accomplish at least one of the following objectives: reduce comparable project costs, expedite a projects completion, or provide features not achievable through the traditional design-bid-build method.
(c)SANDAG may utilize the following alternative project delivery methods if the conditions in this section are met:
(1)Design-build.
(2)Design sequencing.
(3)Construction Manager/General Contractor (CMGC).
(d)If the conditions in this section for utilizing an alternative delivery method are not met, SANDAG shall use the design-bid-build delivery method for construction of a project.(d)(1)If a contract for CMGC services is entered into pursuant to this chapter and includes preconstruction services by the construction manager, SANDAG shall enter into a written contract with the construction manager for the preconstruction services, under which SANDAG shall pay the construction manager a fee for preconstruction services in an amount agreed upon by SANDAG and the construction manager. The preconstruction services contract may include fees for services to be performed during the contract period, provided that SANDAG shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after SANDAG has entered into a services contract. A preconstruction services contract shall provide for the subsequent negotiation for construction of all or any discrete phase or phases of the project and shall provide for SANDAG to own the design plans and other preconstruction services work products.
(2)A contract for construction services may be awarded after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. In the event that a fixed price or a guaranteed maximum price is not successfully negotiated, SANDAG may award the contract for construction services utilizing any other procurement method authorized by law.
(3)The construction manager shall perform not less than 30 percent of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors pursuant to Section 6955 of the Public Contract Code.
(e)It is the intent of the Legislature that alternative project delivery methods as authorized in this section shall not be construed to extend, limit, or change in any manner the legal responsibility of public agencies and contractors to comply with existing laws.
|
Date
|
Status
|
|---|---|
| Sep 8, 2023 | Chaptered by Secretary of State - Chapter 163, Statutes of 2023. |
| Sep 8, 2023 | Approved by the Governor. |
| Aug 30, 2023 | Enrolled and presented to the Governor at 2:15 p.m. |
| Aug 24, 2023 | Urgency clause adopted. Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 76. Noes 0. Page 2782.). |
| Jul 6, 2023 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after July 8 pursuant to Assembly Rule 77. |
| Jul 6, 2023 | Read third time. Urgency clause adopted. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 1915.). |
| Jun 29, 2023 | Read second time. Ordered to Consent Calendar. |
| Jun 28, 2023 | From committee: Do pass. To Consent Calendar. (Ayes 16. Noes 0.) (June 27). |
| Jun 8, 2023 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on TRANS. |
| Jun 6, 2023 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| May 24, 2023 | Referred to Com. on TRANS. |
| May 11, 2023 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 11, 2023 | Read third time. Passed. Ordered to the Senate. (Ayes 66. Noes 0. Page 1522.) |
| May 4, 2023 | Read second time. Ordered to Consent Calendar. |
| May 3, 2023 | From committee: Do pass. To Consent Calendar. (Ayes 16. Noes 0.) (May 3). |
| Apr 26, 2023 | In committee: Hearing postponed by committee. |
| Mar 21, 2023 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 15. Noes 0.) (March 20). Re-referred to Com. on APPR. |
| Feb 17, 2023 | Referred to Com. on TRANS. |
| Feb 7, 2023 | From printer. May be heard in committee March 9. |
| Feb 6, 2023 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 24, 2023 | AB 427 Alvarez Concurrence - Urgency Added | Assembly Floor |
Passed |
|
| Jul 6, 2023 | Consent Calendar AB427 Alvarez Urgency Clause | Senate Floor |
Passed |
|
| Jun 27, 2023 | Do pass and be ordered to the Consent Calendar | Senate Standing Committee on Transportation |
Passed |
|
| May 11, 2023 | AB 427 Alvarez Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 3, 2023 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Mar 20, 2023 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Transportation |
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
|
|---|---|---|
| San Diego Association Of Governments | ** Support | |
| State Building And Construction Trades Council Of Ca | ** Support |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 427
Author:(Alvarez)
As Amended Ver:June 8, 2023
2/3 vote. Urgency
SUMMARY
Authorizes the San Diego Association of Governments (SANDAG) to use the Construction Manager/General Contractor (CMGC) project delivery method on the State Route 11/ Otay Mesa East Port of Entry project if specified conditions are met.
Senate Amendments
Add an urgency clause stating that this act is necessary for the immediate preservation of the public peace, health, or safety within the meaning of California Constitution Article IV and shall go into immediate effect. The facts constituting the necessity are: In order for state and local governments to meet critical deadlines and stakeholder agreements on a project of regional, statewide, and national significance in partnership with the federal government, while protecting worker and public safety, it is necessary that this act take effect immediately.
COMMENTS
As the United States (U.S.)-Mexico border region grows, there is a need to improve the commercial movement of goods, services, and passengers through an efficient, integrated system to bolster the local, state, federal, and international economies. In 2019, the Otay Mesa and Tecate ports of entry processed a combined $48.3 billion in total bilateral trade, and that number is expected to grow in coming years. Currently, more than 90% of California-Mexico trade is moved by truck. The State Route 11/Otay Mesa East Port of Entry project will facilitate job growth and new economic opportunities for private sectors on both sides of the border.
The project is a joint venture between SANDAG and Caltrans, in collaboration with state and federal partners in the U.S. and Mexico, to create a 21st century border crossing for the San Diego-Baja California region that will enhance regional mobility and fuel economic growth and binational trade. These improvements will provide a direct connection to the new port of entry, helping to enable fast, predictable, and secure border crossings. Reducing vehicle wait times and building in smart technologies will also help to reduce greenhouse gas (GHG) emissions and improve air quality in the border region.
SB 985 (Hueso) Chapter 422, Statutes of 2022 made various changes to the Otay Mesa East Toll Facility Act, including authorizing SANDAG to enter into an agreement and contracts, as specified, with the government of Mexico or a government agency for the purposes of imposing and collecting tolls; and acquiring, operating, and maintaining tolling facilities at the Otay Mesa East Port of Entry.
Current law allows SANDAG to use design-build and design sequencing as alternative project delivery methods if certain conditions are met. This bill would authorize SANDAG to also use the CMGC as an alternative project delivery method if specified conditions are met.
CMGC allows the project manager to select a contractor early in the project development process to act in an advisory role. The CMGC contractor provides constructability reviews, value engineering suggestions, construction estimates, and other construction-related recommendations. When design is significantly completed, the CMGC contractor will provide a price to construct the project. If the price is acceptable, the CMGC contractor will become the general contractor and will construct the project. Engaging the construction contractor during the design phase can provide the opportunity to reduce the number and cost of change orders during construction and help to mitigate schedule risks for the construction phase.
In 2012, the California Legislature passed, and the Governor signed, AB 2498 (Gordon), Chapter 752, authorizing Caltrans to use the CMGC delivery method. The 2012 law authorized Caltrans to use CMGC on up to six projects as a pilot program. Subsequent legislation provided additional authority in 2016 for six additional projects and in 2017 legislation provided authority to 10 additional projects. In 2018, SB 1262 (Beall), Chapter 465, provided general authority for use of the CMGC delivery method on projects over $10 million construction capital cost. At the local level, CMGC has been used to deliver various transit projects statewide.
SANDAG currently employs the CMGC contracting method on large infrastructure projects in San Diego County utilizing its own governing statute, as amended by SB 1549 (Vargas) Chapter 767, Statutes of 2012. Most recently, SANDAG utilized CMGC to successfully complete the $2.2 billion Mid-Coast trolley line extension, which connected UCSD, Scripps Memorial Hospital, and two large employment centers to the blue line, which extends to the San Ysidro border.
Caltrans has used CMGC authority on toll projects and is currently using CMGC on a $73 million project to convert toll plazas at the Antioch, Benicia, Carquinez, Dumbarton, San Mateo-Hayward, Richmond-San Rafael, and the San Francisco-Oakland Bay bridges to Open Road Tolling in Contra Costa, Solano, and Alameda counties. Similarly, Caltrans authorized the use of CMGC project delivery method for the San Mateo US 101 express lanes which include tolling.
Committee comments:
This bill clarifies SANDAG's authority to use CMGC on the Otay Mesa East Toll Facility.
Previous legislation. SB 985 (Hueso) Chapter 422, Statutes of 2022, makes various changes to the Otay Mesa East Toll Facility Act (Act), including authorizing the SANDAG to enter into an agreement and contracts, as specified, with the government of Mexico or a government agency for the purposes of imposing and collecting tolls; and acquiring, operating, and maintaining tolling facilities at the Otay Mesa East Port of Entry.
SB 1262 (Beall), Chapter 465, Statutes of 2018, provided general authority for use of the CMGC delivery method on projects over $10 million construction capital cost.
AB 115 (Budget Committee), Chapter 20, Statutes of 2017, provided authority for 12 additional projects, at least 10 of which shall have construction costs greater than $10 million.
AB 2126 (Mullin), Chapter 750, Statutes of 2016, authorized Caltrans to use CMGC on 12 projects and required eight out of the 12 projects to use department employees or consultants under contract with the department to perform all project design and engineering services.
SB 1549 (Vargas), Chapter 767, Statutes of 2012 allows SANDAG to use alternative project delivery methods, including CMGC, for public transit projects within its jurisdiction.
AB 2498 (Gordon), Chapter 752, Statutes of 2012, authorized Caltrans to use CMGC on up to six projects as a pilot program.
SB 1486 (Ducheny), Chapter 720, Statutes of 2008, (Otay Mesa East Port of Entry Act) allowed for the construction and operation of State Highway Route 11 and a new federal Otay Mesa East Port of Entry Corridor.
According to the Author
According to the author, "AB 427 clarifies that the SANDAG can use the Construction Manager/General Contractor (CMGC) contracting method on the SR11/Otay Mesa East Port of Entry Project (POE). The Otay Mesa East Port of Entry Act is a joint effort between SANDAG and Caltrans in collaboration with state and federal partners between the United States and Mexican governments. The project is expected to reduce the border-crossing wait time up to 1-2 hours to 20 minutes. It also serves as a relief valve for other border crossings in the area, decreasing peak wait times at regional existing land ports of entry by 50% on opening day. This clarification ensures the SR11/Otay Mesa East Port of Entry Project (POE) meets critical timelines."
Arguments in Support
The San Diego Association of Governments writing in support states "AB 427 will ensure that this essential infrastructure project achieves its goal of significantly reduced wait times at the border, decreased greenhouse gas emissions, and robust economic benefit and job-creation throughout the region and the nation."
Arguments in Opposition
None on file
FISCAL COMMENTS
None
VOTES:
ASM TRANSPORTATION: 15-0-0
YES: Friedman, Vince Fong, Berman, Juan Carrillo, Davies, Gipson, Hart, Jackson, Kalra, Lowenthal, Stephanie Nguyen, Sanchez, Wallis, Ward, Wicks
ASM APPROPRIATIONS: 16-0-0
YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Robert Rivas, Sanchez, Weber, Wilson
ASSEMBLY FLOOR: 66-0-14
YES: Addis, Aguiar-Curry, Alanis, Bains, Bennett, Berman, Boerner, Bryan, Calderon, Wendy Carrillo, Chen, Connolly, Megan Dahle, Davies, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Low, Lowenthal, Maienschein, Mathis, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Weber, Wicks, Wilson, Zbur, Rendon
ABS, ABST OR NV: Alvarez, Arambula, Bauer-Kahan, Bonta, Juan Carrillo, Cervantes, Dixon, Hart, Lee, McCarty, Ortega, Jim Patterson, Ward, Wood
SENATE FLOOR: 40-0-0
YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk
UPDATED
VERSION: June 8, 2023
CONSULTANT: Farra Bracht / TRANS. / (916) 319-2093 FN: 0001202
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 427 |
CONSENT
Bill No: AB 427
Author: Alvarez (D)
Amended: 6/8/23 in Senate
Vote: 27 - Urgency
SENATE TRANSPORTATION COMMITTEE: 16-0, 6/27/23
AYES: Gonzalez, Niello, Allen, Archuleta, Becker, Blakespear, Cortese, Dahle, Dodd, Limón, McGuire, Newman, Nguyen, Seyarto, Umberg, Wahab
ASSEMBLY FLOOR: 66-0, 5/11/23 (Consent) - See last page for vote
SUBJECT: Otay Mesa East Toll Facility Act: alternative project delivery method
SOURCE: San Diego Association of Governments
DIGEST:
This bill authorizes the San Diego Association of Governments (SANDAG) to use the Construction Manager/General Contractor (CMGC) project delivery method on the State Route 11/ Otay Mesa East Port of Entry project if specified conditions are met.
ANALYSIS:
Existing law:
- Establishes SANDAG as the transportation planning agency for the San Diego County region.
- Authorizes, pursuant to the Otay Mesa East Toll Facility Act (Act), SANDAG to carry out a construction project for the State Route (SR) 11 corridor, including, among other things, highway improvements and international border crossing facilities, to be operated as a toll facility.
- Authorizes SANDAG to utilize the alternative project delivery methods of design-build and design sequencing on the Otay Mesa East Toll Facility if certain conditions are met.
- Authorizes SANDAG to use alternative project delivery methods, including CMGC, for public transit projects within its jurisdiction.
This bill:
- Defines “best value” to mean a value determined by evaluation of objective criteria that relate to price, features, functions, life-cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the interests of the local agency and meeting the objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors.
- Defines CMGC to mean a project delivery method using a best value procurement process in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.
- Defines a “construction manager” as a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a CMGC contract.
- Provides that SANDAG is no longer required to use design-bid-build delivery method if specified conditions for utilizing an alternative delivery method are not met.
- Authorizes the use of CMGC as an alternative project delivery method if specified conditions are met.
- Establishes that if a contract for CMGC services is entered into that includes preconstruction services by the construction manager, SANDAG shall enter into a written contract with the construction manager for the preconstruction services, under which SANDAG shall pay the construction manager a fee for preconstruction services in an amount agreed upon by SANDAG and the construction manager.
- Authorizes a preconstruction services contract to include fees for services to be performed during the contract period, provided that SANDAG shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after SANDAG has entered into a services contract.
- Requires a preconstruction services contract to provide for the subsequent negotiation for construction of all or any discrete phase or phases of the project and shall provide for SANDAG to own the design plans and other preconstruction services work products.
- Authorizes SANDAG to award a contract for construction services after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. In the event that a fixed price or a guaranteed maximum price is not successfully negotiated, SANDAG may award the contract for construction services utilizing any other procurement method authorized by law.
- Requires the construction manager to perform not less than 30% of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors, as specified.
- Contains an urgency clause. Declares that an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. Declares that the facts constituting the necessity are: In order for state and local governments to meet critical deadlines and stakeholder agreements on a project of regional, statewide, and national significance in partnership with the federal government, while protecting worker and public safety, it is necessary that this act take effect immediately.
Comments
- Purpose of the bill. According to the author, “AB 427 clarifies that the San Diego Association of Governments (SANDAG) can use the Construction Manager/General Contractor (CM/GC) contracting method on the SR11/Otay Mesa East Port of Entry Project (POE). The Otay Mesa East Port of Entry Act is a joint effort between SANDAG and Caltrans in collaboration with state and federal partners between the United States and Mexican governments. The project is expected to reduce the border-crossing wait time up to 1-2 hours to 20 minutes. It also serves as a relief valve for other border crossings in the area, decreasing peak wait times at regional existing land ports of entry by 50% on opening day. This clarification ensures the SR11/Otay Mesa East Port of Entry Project (POE) meets critical timelines.”
- SR 11 and Otay Mesa East Port of Entry. The State Route 11 -- Otay Mesa East Port of Entry (POE) project is a joint venture between the SANDAG and the California Department of Transportation, (Caltrans), in collaboration with state and federal partners in the United States (U.S.) and Mexico, to create a new border crossing for the San Diego-Baja California region that will help enhance regional mobility and fuel economic growth and binational trade.
SB 1486 (Ducheny, Chapter 720, Statutes of 2008), originally authorized SANDAG to construct and operate the SR 11 and a new federal POE by charging tolls, and issuing bonds secured by those toll revenues to finance the cost of acquiring or operating transportation facilities, international ports of entry, international border crossing facilities and other necessary and related facilities.
Last year, SB 985 (Hueso, Chapter 422, Statutes of 2022), made various changes to the Act, including authorizing SANDAG to enter into an agreement and contracts with the government of Mexico or a government agency for the purposes of imposing and collecting tolls; and acquiring, operating, and maintaining tolling facilities at POE.
As the U.S.-Mexico border region grows, there is a need to improve the commercial movement of goods, services, and passengers through an efficient, integrated system to support the local, state, federal, and international economies. For example, in 2019, the existing Otay Mesa and Tecate ports of entry processed a combined $48.3 billion in total bilateral trade, and that number is expected to grow over the coming years. Additionally, wait times for personal and commercial vehicles to cross the border is an average of 2-4 hours.
According to the SANDAG Business Case for the new POE, this back up contributes to $3.4 billion in lost economic output due to delays experienced by the 1.3 million trucks that cross the border annually; 88,000 jobs lost in the U.S. due to border delays; and over 19,000 tons of GHG emissions are released annually due to idling vehicles. According to SANDAG, the new POE will help accommodate growing demands on border crossings by increasing capacity. The new capacity will help to reduce wait times at all regional POEs, improving air quality and mobility throughout the cross border region. The new SR 11/POE is expected to reduce wait times to a 20-minute average.
- What’s the current status? According to SANDAG, Caltrans construction on the final segment of the future SR 11 toll road, which terminates at the future POE site, is complete. Additionally, in December 2021, Caltrans and SANDAG celebrated the opening of the SR 125 and SR 905/SR 11 southbound connectors. The POE officially broke ground in August 2022 to begin design and construction.
On the U.S. side, a combination of federal, state, and local funds totaling $592 million have already been secured to construct the roadway facilities leading to the POE and acquire the right-of-way needed for the site. Additionally, Mexico has committed approximately 800 million pesos or $42.5 million to acquire the right-of-way needed in Mexico. Approximately $468 million in capital costs remain to be funded, which SANDAG anticipates to be funded primarily through the use of toll revenue bonds and, possibly, a federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan. The debt obligations will be secured by future toll revenues.
Most recently, in October of 2022, a toll agreement was reached between the U.S., Mexico, and SANDAG. Additionally, the project was awarded $150 million from the U.S. Department of Transportation's Infrastructure for Rebuilding America (INFRA) program, the largest INFRA grant award in the country.
- What is CMGC? CMGC allows the project manager to select a contractor early in the project development process to act in an advisory role. The CMGC contractor provides constructability reviews, value engineering suggestions, construction estimates, and other construction-related recommendations. When design is significantly completed, the CMGC contractor will provide a price to construct the project. If the price is acceptable, the CMGC contractor will become the general contractor and will construct the project. Engaging the construction contractor during the design phase can provide the opportunity to reduce the number and cost of change orders during construction and help to mitigate schedule risks for the construction phase.
In 2012, the California Legislature passed, and Governor Brown signed into law, AB 2498 (Gordon, Chapter 752, Statutes of 2012), authorizing Caltrans to use the CMGC delivery method on up to six projects as a pilot program. Subsequent legislation provided additional authority for six additional projects and in 2017 legislation provided authority to 10 additional projects. In 2018, SB 1262 (Beall, Chapter 465, Statutes of 2018), provided Caltrans general authority for use of the CMGC delivery method on projects over $10 million construction capital cost. At the local level, CMGC has been used to deliver various transit projects statewide.
Caltrans has used CMGC authority on toll projects and is currently using CMGC on a $73 million project to convert toll plazas at the Antioch, Benicia, Carquinez, Dumbarton, San Mateo-Hayward, Richmond-San Rafael, and the San Francisco-Oakland Bay bridges to Open Road Tolling in Contra Costa, Solano, and Alameda counties. Similarly, Caltrans authorized the use of CMGC project delivery method for the San Mateo US 101 express lanes, which include tolling.
- AB 427 clarifies SANDAG’s authority to use CMGC. SANDAG currently employs the CMGC contracting method on public transit projects in San Diego County utilizing its own governing statute. Most recently, SANDAG utilized CMGC to successfully complete the $2.2 billion Mid-Coast trolley line extension, which connected UC San Diego, Scripps Memorial Hospital, and two large employment centers to the blue line, which extends to the San Ysidro border.
The Act authorizes SANDAG to use other alternative project delivery methods on the Otay Mesa East POE project, including design-build and design sequencing if certain conditions are met. AB 427 would authorize SANDAG to also use the CMGC as an alternative project delivery method if specified conditions are met. Additionally, the bill contains an urgency clause. SANDAG notes that it needs the authority prior to commencing the Request for Proposals (RPF) process for the project. To continue to meet SANDAG’s timelines with Mexico and the federal government, it would like to have a contractor in place by January 2024.
Related/Prior Legislation
SB 985 (Hueso, Chapter 422, Statutes of 2022) made various changes to the Act, including authorizing the SANDAG to enter into an agreement and contracts, as specified, with the government of Mexico or a government agency for the purposes of imposing and collecting tolls; and acquiring, operating, and maintaining tolling facilities at the Otay Mesa East Port of Entry.
SB 1262 (Beall, Chapter 465, Statutes of 2018) provided authority for Caltrans to use CMGC delivery method on projects over $10 million construction capital cost for state highway projects.
AB 115 (Committee on Budget, Chapter 20, Statutes of 2017) provided authority for Caltrans for 12 additional projects, at least 10 of which shall have construction costs greater than $10 million.
AB 2126 (Mullin, Chapter 750, Statutes of 2016) authorized Caltrans to use CMGC on 12 projects and required eight out of the 12 projects to use department employees or consultants under contract with the department to perform all project design and engineering services.
SB 1549 (Vargas, Chapter 767, Statutes of 2012) allowed SANDAG to use alternative project delivery methods, including CMGC, for public transit projects within its jurisdiction.
AB 2498 (Gordon, Chapter 752, Statutes of 2012) authorized Caltrans to use CMGC on up to six projects as a pilot program.
SB 1486 (Ducheny, Chapter 720, Statutes of 2008) authorized SANDAG to construct and operate the SR 11 and a new federal Otay Mesa East Port of Entry by charging tolls, and issuing bonds secured by those toll revenues to finance the cost of acquiring or operating transportation facilities, international ports of entry, international border crossing facilities and other necessary and related facilities.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT: (Verified 6/28/23)
San Diego Association of Governments (source)
State Building and Construction Trades Council of CA
OPPOSITION: (Verified 6/28/23)
None received
ARGUMENTS IN SUPPORT: According to the State Building and Construction Trades Council of CA, writing in support, “AB 427 ensures that this essential infrastructure project is fully funded, meets critical timelines agreed upon with the federal government and Mexico, and achieves its goals of significantly reducing wait times at the border. The POE will decrease greenhouse gas emissions and ensure robust economic benefits through the creation of jobs.”
ASSEMBLY FLOOR: 66-0, 5/11/23
AYES: Addis, Aguiar-Curry, Alanis, Bains, Bennett, Berman, Boerner, Bryan, Calderon, Wendy Carrillo, Chen, Connolly, Megan Dahle, Davies, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Low, Lowenthal, Maienschein, Mathis, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Weber, Wicks, Wilson, Zbur, Rendon
NO VOTE RECORDED: Alvarez, Arambula, Bauer-Kahan, Bonta, Juan Carrillo, Cervantes, Dixon, Hart, Lee, McCarty, Ortega, Jim Patterson, Ward, Wood
Prepared by: Melissa White / TRANS. / (916) 651-4121
6/30/23 13:34:26
**** END ****
SENATE COMMITTEE ON TRANSPORTATION
Senator Lena Gonzalez, Chair
2023 - 2024 Regular
Bill No: Hearing Date: 6/27/2023
Author: | Alvarez | ||
Version: | 6/8/23 Amended | ||
Urgency: | Yes | Fiscal: | No |
Consultant: | Melissa White | ||
SUBJECT:
DIGEST: This bill authorizes the San Diego Association of Governments (SANDAG) to use the Construction Manager/General Contractor (CMGC) project delivery method on the State Route 11/ Otay Mesa East Port of Entry project if specified conditions are met.
ANALYSIS:
Existing law:
- Establishes SANDAG as the transportation planning agency for the San Diego County region.
- The Otay Mesa East Toll Facility Act (Act), authorizes SANDAG to carry out a construction project for the State Route (SR) 11 corridor, including, among other things, highway improvements and international border crossing facilities, to be operated as a toll facility.
- Authorizes SANDAG to utilize the alternative project delivery methods of design-build and design sequencing on the Otay Mesa East Toll Facility if certain conditions are met.
- Authorizes SANDAG to use alternative project delivery methods, including CMGC, for public transit projects within its jurisdiction.
This bill:
- Defines “best value” to mean a value determined by evaluation of objective criteria that relate to price, features, functions, life-cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the interests of the local agency and meeting the objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors.
- Defines CMGC to mean a project delivery method using a best value procurement process in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.
- Defines a “construction manager” as a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a CMGC contract.
- Provides that SANDAG is no longer required to use design-bid-build delivery method if specified conditions for utilizing an alternative delivery method are not met.
- Authorizes the use of CMGC as an alternative project delivery method if specified conditions are met.
- Establishes that if a contract for CMGC services is entered into that includes preconstruction services by the construction manager, SANDAG shall enter into a written contract with the construction manager for the preconstruction services, under which SANDAG shall pay the construction manager a fee for preconstruction services in an amount agreed upon by SANDAG and the construction manager.
- Authorizes a preconstruction services contract to include fees for services to be performed during the contract period, provided that SANDAG shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after SANDAG has entered into a services contract.
- Requires a preconstruction services contract to provide for the subsequent negotiation for construction of all or any discrete phase or phases of the project and shall provide for SANDAG to own the design plans and other preconstruction services work products.
- Authorizes SANDAG to award a contract for construction services after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. In the event that a fixed price or a guaranteed maximum price is not successfully negotiated, SANDAG may award the contract for construction services utilizing any other procurement method authorized by law.
- Requires the construction manager to perform not less than 30% of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors, as specified.
- Contains an urgency clause. Declares that an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. Declares that the facts constituting the necessity are: In order for state and local governments to meet critical deadlines and stakeholder agreements on a project of regional, statewide, and national significance in partnership with the federal government, while protecting worker and public safety, it is necessary that this act take effect immediately.
COMMENTS:
- Purpose of the bill. According to the author, “AB 427 clarifies that the San Diego Association of Governments (SANDAG) can use the Construction Manager/General Contractor (CM/GC) contracting method on the SR11/Otay Mesa East Port of Entry Project (POE). The Otay Mesa East Port of Entry Act is a joint effort between SANDAG and Caltrans in collaboration with state and federal partners between the United States and Mexican governments. The project is expected to reduce the border-crossing wait time up to 1-2 hours to 20 minutes. It also serves as a relief valve for other border crossings in the area, decreasing peak wait times at regional existing land ports of entry by 50% on opening day. This clarification ensures the SR11/Otay Mesa East Port of Entry Project (POE) meets critical timelines.”
- SR 11 and Otay Mesa East Port of Entry. The State Route 11 -- Otay Mesa East Port of Entry (POE) project is a joint venture between the SANDAG and the California Department of Transportation, (Caltrans), in collaboration with state and federal partners in the United States (U.S.) and Mexico, to create a new border crossing for the San Diego-Baja California region that will help enhance regional mobility and fuel economic growth and binational trade.
SB 1486 (Ducheny, Chapter 720, Statutes of 2008), originally authorized SANDAG to construct and operate the SR 11 and a new federal POE by charging tolls, and issuing bonds secured by those toll revenues to finance the cost of acquiring or operating transportation facilities, international ports of entry, international border crossing facilities and other necessary and related facilities.
Last year, SB 985 (Hueso, Chapter 422, Statutes of 2022), made various changes to the Act, including authorizing SANDAG to enter into an agreement and contracts with the government of Mexico or a government agency for the purposes of imposing and collecting tolls; and acquiring, operating, and maintaining tolling facilities at POE.
As the U.S.-Mexico border region grows, there is a need to improve the commercial movement of goods, services, and passengers through an efficient, integrated system to support the local, state, federal, and international economies. For example, in 2019, the existing Otay Mesa and Tecate ports of entry processed a combined $48.3 billion in total bilateral trade, and that number is expected to grow over the coming years. Additionally, wait times for personal and commercial vehicles to cross the border is an average of 2-4 hours.
According to the SANDAG Business Case for the new POE, this back up contributes to $3.4 billion in lost economic output due to delays experienced by the 1.3 million trucks that cross the border annually; 88,000 jobs lost in the U.S. due to border delays; and over 19,000 tons of GHG emissions are released annually due to idling vehicles. According to SANDAG, the new POE will help accommodate growing demands on border crossings by increasing capacity. The new capacity will help to reduce wait times at all regional POEs, improving air quality and mobility throughout the cross border region. The new SR 11/POE is expected to reduce wait times to a 20-minute average.
- What’s the current status? According to SANDAG, Caltrans construction on the final segment of the future SR 11 toll road, which terminates at the future POE site, is complete. Additionally, in December 2021, Caltrans and SANDAG celebrated the opening of the SR 125 and SR 905/SR 11 southbound connectors. The POE officially broke ground in August 2022 to begin design and construction.
On the U.S. side, a combination of federal, state, and local funds totaling $592 million have already been secured to construct the roadway facilities leading to the POE and acquire the right-of-way needed for the site. Additionally, Mexico has committed approximately 800 million pesos or $42.5 million to acquire the right-of-way needed in Mexico. Approximately $468 million in capital costs remain to be funded, which SANDAG anticipates to be funded primarily through the use of toll revenue bonds and, possibly, a federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan. The debt obligations will be secured by future toll revenues.
Most recently, in October of 2022, a toll agreement was reached between the U.S., Mexico, and SANDAG. Additionally, the project was awarded $150 million from the U.S. Department of Transportation's Infrastructure for Rebuilding America (INFRA) program, the largest INFRA grant award in the country.
- What is CMCG? CMGC allows the project manager to select a contractor early in the project development process to act in an advisory role. The CMGC contractor provides constructability reviews, value engineering suggestions, construction estimates, and other construction-related recommendations. When design is significantly completed, the CMGC contractor will provide a price to construct the project. If the price is acceptable, the CMGC contractor will become the general contractor and will construct the project. Engaging the construction contractor during the design phase can provide the opportunity to reduce the number and cost of change orders during construction and help to mitigate schedule risks for the construction phase.
In 2012, the California Legislature passed, and Governor Brown signed into law, AB 2498 (Gordon, Chapter 752, Statutes of 2012), authorizing Caltrans to use the CMGC delivery method on up to six projects as a pilot program. Subsequent legislation provided additional authority for six additional projects and in 2017 legislation provided authority to 10 additional projects. In 2018, SB 1262 (Beall, Chapter 465, Statutes of 2018), provided Caltrans general authority for use of the CMGC delivery method on projects over $10 million construction capital cost. At the local level, CMGC has been used to deliver various transit projects statewide.
Caltrans has used CMGC authority on toll projects and is currently using CMGC on a $73 million project to convert toll plazas at the Antioch, Benicia, Carquinez, Dumbarton, San Mateo-Hayward, Richmond-San Rafael, and the San Francisco-Oakland Bay bridges to Open Road Tolling in Contra Costa, Solano, and Alameda counties. Similarly, Caltrans authorized the use of CMGC project delivery method for the San Mateo US 101 express lanes, which include tolling.
- AB 427 clarifies SANDAG’s authority to use CMCG. SANDAG currently employs the CMGC contracting method on public transit projects in San Diego County utilizing its own governing statute. Most recently, SANDAG utilized CMGC to successfully complete the $2.2 billion Mid-Coast trolley line extension, which connected UC San Diego, Scripps Memorial Hospital, and two large employment centers to the blue line, which extends to the San Ysidro border.
The Act authorizes SANDAG to use other alternative project delivery methods on the Otay Mesa East POE project, including design-build and design sequencing if certain conditions are met. AB 427 would authorize SANDAG to also use the CMGC as an alternative project delivery method if specified conditions are met. Additionally, the bill contains an urgency clause. SANDAG notes that it needs the authority prior to commencing the Request for Proposals (RPF) process for the project. To continue to meet SANDAG’s timelines with Mexico and the federal government, it would like to have a contractor in place by January 2024.
According to the State Building and Construction Trades Council of CA, writing in support, “AB 427 ensures that this essential infrastructure project is fully funded, meets critical timelines agreed upon with the federal government and Mexico, and achieves its goals of significantly reducing wait times at the border. The POE will decrease greenhouse gas emissions and ensure robust economic benefits through the creation of jobs.”
Related/PREVIOUS Legislation:
SB 985 (Hueso, Chapter 422, Statutes of 2022) -- Made various changes to the Act, including authorizing the SANDAG to enter into an agreement and contracts, as specified, with the government of Mexico or a government agency for the purposes of imposing and collecting tolls; and acquiring, operating, and maintaining tolling facilities at the Otay Mesa East Port of Entry.
SB 1262 (Beall, Chapter 465, Statutes of 2018) -- Provided authority for Caltrans to use CMGC delivery method on projects over $10 million construction capital cost for state highway projects.
AB 115 (Committee on Budget, Chapter 20, Statutes of 2017) -- Provided authority for Caltrans for 12 additional projects, at least 10 of which shall have construction costs greater than $10 million.
AB 2126 (Mullin, Chapter 750, Statutes of 2016) -- Authorized Caltrans to use CMGC on 12 projects and required eight out of the 12 projects to use department employees or consultants under contract with the department to perform all project design and engineering services.
SB 1549 (Vargas, Chapter 767, Statutes of 2012) -- Allowed SANDAG to use alternative project delivery methods, including CMGC, for public transit projects within its jurisdiction.
AB 2498 (Gordon, Chapter 752, Statutes of 2012) -- Authorized Caltrans to use CMGC on up to six projects as a pilot program.
SB 1486 (Ducheny, Chapter 720, Statutes of 2008) – Authorized SANDAG to construct and operate the SR 11 and a new federal Otay Mesa East Port of Entry by charging tolls, and issuing bonds secured by those toll revenues to finance the cost of acquiring or operating transportation facilities, international ports of entry, international border crossing facilities and other necessary and related facilities.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
POSITIONS: (Communicated to the committee before noon on Wednesday,
June 21, 2023.)
SUPPORT:
San Diego Association of Governments (sponsor)
State Building and Construction Trades Council of CA
OPPOSITION:
None received
-- END --
Date of Hearing: May 3, 2023
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
ABPCA Bill Id:AB 427
Author:(Alvarez) – As Introduced Ver:February 6, 2023
Policy Committee: | Transportation | Vote: | 15 - 0 |
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill authorizes the San Diego Association of Governments (SANDAG), in implementing the Otay Mesa East Toll Facility Act, to use the Construction Manager/General Contractor (CMGC) project delivery method, if specified conditions are met.
The bill defines the CMGC method as a project delivery method using a best value procurement process in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project.
The bill also defines “best value” as a value determined by evaluation of objective criteria that relates to price, features, functions, life-cycle costs, experience and past performance that may involve the selection of the lowest cost proposal meeting the interests of the local agency and objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors.
FISCAL EFFECT:
No state costs.
COMMENTS:
Background and Purpose. A tremendous flow of traffic and trade cross the border between California and Mexico each day, mostly by truck. Oftentimes, that flow is less than fluid.
To address the regular backlog, SANDAG and California Department of Transportation (Caltrans), in collaboration with state and federal partners in the U.S. and Mexican governments, are working on the State Route (SR) 11/Otay Mesa East Port of Entry (POE) Project to create what SANDAG describes as “a 21st century border crossing for the San Diego-Baja California region.” According to SANDAG, the project, complemented by Mesa de Otay II on the Mexican side, will use “variable tolls to manage traffic demand…resulting in decreased congestion and wait times at the other San Diego land ports of entry.” Again according to SANDAG, construction is underway on the final segment of SR 11, the future toll road and southbound connector ramps, and work is to begin on the Otay Mesa East POE in summer 2022, with a goal completion by 2024. Current law authorizes SANDAG, pursuant to the Otay Mesa East Toll Facility Act, to carry out a construction project for the SR 11 corridor, including, among other things, highway improvements and international border crossing facilities, to be operated as a toll facility.
Existing law authorizes use of CMGC. In the early parts of the last decade, statute allowed Caltrans to use of CMGC on a pilot basis. SB 1262 (Beall), Chapter 465, Statutes of 2018, generally authorized Caltrans to use the method on projects with more than $10 million in capital costs. Caltrans has used CMGC on several projects and, currently, is using the method on a major toll plaza conversion project in the Bay Area.
Statute also provides SANDAG authority to use CMGC and SANGAG has acted on this authority. Specifically, SB 1549 (Vargas), Chapter 767, Statutes of 2012, among other things, authorized SANDAG to use CMGC, as well as other alternative specified project delivery methods, for public transit projects within its jurisdiction. As noted in the policy analysis of this bill, SANDAG has used the method on several projects, including the $2.2 billion Mid-Coast trolley line extension.
Existing law explicitly authorizes SANDAG to use alternative project delivery methods—design build and design sequencing—for the Otay Mesa project. However, existing law says nothing about whether SANDAG may use CMGC for project delivery on the Otay Mesa project. For this reason, the author describes the bill as clarifying SANDAG’s authority, relative to Otay Mesa. According to the author, this bill:
Clarifies that the SANDAG can use the Construction Manager/General Contractor (CMGC) contracting method on the SR11/Otay Mesa East Port of Entry Project (POE)… [ensuring] the SR11/Otay Mesa East Port of Entry Project (POE) meets critical timelines.”
Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081
Date of Hearing: March 20, 2023
ASSEMBLY COMMITTEE ON TRANSPORTATION
Laura Friedman, Chair
ABPCA Bill Id:AB 427 (
Author:Alvarez) – As Introduced Ver:February 6, 2023
SUBJECT: Otay Mesa East Toll Facility Act: alternative project delivery method
SUMMARY: Authorizes the San Diego Association of Governments (SANDAG) to use the Construction Manager/General Contractor (CMGC) project delivery method on the State Route 11/ Otay Mesa East Port of Entry project if specified conditions are met. Specifically, this bill:
- Defines “best value” to mean a value determined by evaluation of objective criteria that relate to price, features, functions, life-cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the interests of the local agency and meeting the objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors.
- Defines CMGC to mean a project delivery method using a best value procurement process in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.
- Defines a “construction manager” as a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a CMGC contract.
- Provides that SANDAG is no longer required to use design-bid-build delivery method if specified conditions for utilizing an alternative delivery method are not met.
- Authorizes the use of CMGC as an alternative project delivery method if specified conditions are met.
- Establishes that if a contract for CMGC services is entered into that includes preconstruction services by the construction manager, SANDAG shall enter into a written contract with the construction manager for the preconstruction services, under which SANDAG shall pay the construction manager a fee for preconstruction services in an amount agreed upon by SANDAG and the construction manager. The preconstruction services contract may include fees for services to be performed during the contract period, provided that SANDAG shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after SANDAG has entered into a services contract. A preconstruction services contract shall provide for the subsequent negotiation for construction of all or any discrete phase or phases of the project and shall provide for SANDAG to own the design plans and other preconstruction services work products.
- A contract for construction services may be awarded after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. In the event that a fixed price or a guaranteed maximum price is not successfully negotiated, SANDAG may award the contract for construction services utilizing any other procurement method authorized by law.
- The construction manager shall perform not less than 30% of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors pursuant to Section 6955 of the Public Contract Code.
EXISTING LAW:
- Establishes SANDAG as the transportation planning agency for the San Diego County region. (Public Utilities Code Section 132005)
- Authorizes SANDAG, pursuant to the Otay Mesa East Toll Facility Act, to carry out a construction project for the State Route (SR) 11 corridor, including, among other things, highway improvements and international border crossing facilities, to be operated as a toll facility. (Streets and Highways Code (SHC) beginning with Section 31460)
- Authorizes SANDAG to utilize the alternative project delivery methods of design-build and design sequencing on the Otay Mesa East Toll Facility if certain conditions are met. (SHC 31468)
FISCAL EFFECT: Unknown
COMMENTS:
As the United States (U.S.)-Mexico border region grows, there is a need to improve the commercial movement of goods, services, and passengers through an efficient, integrated system to bolster the local, state, federal, and international economies. In 2019, the Otay Mesa and Tecate ports of entry processed a combined $48.3 billion in total bilateral trade, and that number is expected to grow in coming years. Currently, more than 90% of California-Mexico trade is moved by truck. The State Route 11/Otay Mesa East Port of Entry project will facilitate job growth and new economic opportunities for private sectors on both sides of the border.
The project is a joint venture between SANDAG and Caltrans, in collaboration with state and federal partners in the U.S. and Mexico, to create a 21st century border crossing for the San Diego-Baja California region that will enhance regional mobility and fuel economic growth and binational trade. These improvements will provide a direct connection to the new port of entry, helping to enable fast, predictable, and secure border crossings. Reducing vehicle wait times and building in smart technologies will also help to reduce greenhouse gas (GHG) emissions and improve air quality in the border region.
SB 985 (Hueso) Chapter 422, Statutes of 2022 made various changes to the Otay Mesa East Toll Facility Act, including authorizing SANDAG to enter into an agreement and contracts, as specified, with the government of Mexico or a government agency for the purposes of imposing and collecting tolls; and acquiring, operating, and maintaining tolling facilities at the Otay Mesa East Port of Entry.
Current law allows SANDAG to use design-build and design sequencing as alternative project delivery methods if certain conditions are met. This bill would authorize SANDAG to also use the CMGC as an alternative project delivery method if specified conditions are met.
CMGC allows the project manager to select a contractor early in the project development process to act in an advisory role. The CMGC contractor provides constructability reviews, value engineering suggestions, construction estimates, and other construction-related recommendations. When design is significantly completed, the CMGC contractor will provide a price to construct the project. If the price is acceptable, the CMGC contractor will become the general contractor and will construct the project. Engaging the construction contractor during the design phase can provide the opportunity to reduce the number and cost of change orders during construction and help to mitigate schedule risks for the construction phase.
According to the author, “AB 427 clarifies that the SANDAG can use the Construction Manager/General Contractor (CMGC) contracting method on the SR11/Otay Mesa East Port of Entry Project (POE). The Otay Mesa East Port of Entry Act is a joint effort between SANDAG and Caltrans in collaboration with state and federal partners between the United States and Mexican governments. The project is expected to reduce the border-crossing wait time up to 1-2 hours to 20 minutes. It also serves as a relief valve for other border crossings in the area, decreasing peak wait times at regional existing land ports of entry by 50% on opening day. This clarification ensures the SR11/Otay Mesa East Port of Entry Project (POE) meets critical timelines.”
In 2012, the California Legislature passed, and the Governor signed, AB 2498 (Gordon), authorizing Caltrans to use the CMGC delivery method. The 2012 law authorized Caltrans to use CMGC on up to six projects as a pilot program. Subsequent legislation provided additional authority in 2016 for six additional projects and in 2017 legislation provided authority to 10 additional projects. In 2018, SB 1262 (Beall) Chapter 465, provided general authority for use of the CMGC delivery method on projects over $10 million construction capital cost. At the local level, CMGC has been used to deliver various transit projects statewide.
SANDAG currently employs the CMGC contracting method on large infrastructure projects in San Diego County utilizing its own governing statute, as amended by SB 1549 (Vargas) Chapter 767, Statutes of 2012. Most recently, SANDAG utilized CMGC to successfully complete the $2.2 billion Mid-Coast trolley line extension, which connected UCSD, Scripps Memorial Hospital, and two large employment centers to the blue line, which extends to the San Ysidro border.
Caltrans has used CMGC authority on toll projects and is currently using CMGC on a $73 million project to convert toll plazas at the Antioch, Benicia, Carquinez, Dumbarton, San Mateo-Hayward, Richmond-San Rafael, and the San Francisco-Oakland Bay bridges to Open Road Tolling in Contra Costa, Solano, and Alameda counties. Similarly, Caltrans authorized the use of CMGC project delivery method for the San Mateo US 101 express lanes which include tolling.
Committee comments:
This bill clarifies SANDAG’s authority to use CMGC on the Otay Mesa East Toll Facility.
Previous legislation. SB 985 (Hueso) Chapter 422, Statutes of 2022, makes various changes to the Otay Mesa East Toll Facility Act (Act), including authorizing the SANDAG to enter into an agreement and contracts, as specified, with the government of Mexico or a government agency for the purposes of imposing and collecting tolls; and acquiring, operating, and maintaining tolling facilities at the Otay Mesa East Port of Entry.
SB 1262 (Beall) Chapter 465, Statutes of 2018 provided general authority for use of the CMGC delivery method on projects over $10 million construction capital cost.
AB 115 (Committee on Budget) Chapter 20, Statutes of 2017 provided authority for 12 additional projects, at least 10 of which shall have construction costs greater than $10 million.
AB 2126 (Mullin) Chapter 750, Statutes of 2016 authorized Caltrans to use CMGC on 12 projects and required eight out of the 12 projects to use department employees or consultants under contract with the department to perform all project design and engineering services.
SB 1549 (Vargas) Chapter 767, Statutes of 2012 allows SANDAG to use alternative project delivery methods, including CMGC, for public transit projects within its jurisdiction.
AB 2498 (Gordon) Chapter 752, Statutes of 2012 authorized Caltrans to use CMGC on up to six projects as a pilot program.
SB 1486 (Ducheny) Chapter 720, Statutes of 2008) (Otay Mesa East Port of Entry Act) allowed for the construction and operation of State Highway Route 11 and a new federal Otay Mesa East Port of Entry Corridor.
REGISTERED SUPPORT / OPPOSITION:
Support
San Diego Association of Governments
State Building and Construction Trades Council of California, AFL-CIO
Opposition
None on file
Analysis Prepared by: Farra Bracht / TRANS. / (916) 319-2093
Bill Author
Bill Co-Author(s):