SECTIONS 20160-20175.2 - California Statutes

PUBLIC CONTRACT CODE

SECTION 20160-20175.2

20160. The provisions of this article shall apply to contracts
awarded by cities subject to Title 4 (commencing with Section 34000)
of the Government Code.

20161. As used in this chapter, "public project" means:
(a) A project for the erection, improvement, painting, or repair
of public buildings and works.
(b) Work in or about streams, bays, waterfronts, embankments, or
other work for protection against overflow.
(c) Street or sewer work except maintenance or repair.
(d) Furnishing supplies or materials for any such project,
including maintenance or repair of streets or sewers.

20162. When the expenditure required for a public project exceeds
five thousand dollars ($5,000), it shall be contracted for and let to
the lowest responsible bidder after notice.

20163. It shall be unlawful to split or separate into smaller work
orders or projects any public work project for the purpose of evading
the provisions of this article requiring public work to be done by
contract after competitive bidding. Every person who willfully
violates this provision of this section is guilty of a misdemeanor.

20164. The notice inviting bids shall set a date for the opening of
bids. The first publication or posting of the notice shall be at
least 10 days before the date of opening the bids. Notice shall be
published at least twice, not less than five days apart, in a
newspaper of general circulation, printed and published in the city,
or if there is none, it shall be posted in at least three public
places in the city that have been designated by ordinance as the
places for posting public notices. The notice shall distinctly state
the project to be done.

20165. Any notice inviting bids, which specifies locations of
possible materials, such as a borrow pit or gravel bed, for use in
the proposed construction project which would be subject to Section
1602 of the Fish and Game Code, shall include any conditions or
modifications established pursuant to Section 1603 of the Fish and
Game Code.

20166. In its discretion, the legislative body may reject any bids
presented and readvertise. If two or more bids are the same and the
lowest, the legislative body may accept the one it chooses. If no
bids are received, the legislative body may have the project done
without further complying with this chapter.

20167. After rejecting bids, the legislative body may pass a
resolution by a four-fifths vote of its members declaring that the
project can be performed more economically by day labor, or the
materials or supplies furnished at a lower price in the open market.
Upon adoption of the resolution, it may have the project done in the
manner stated without further complying with this chapter.

20168. In case of an emergency, the legislative body may pass a
resolution by a four-fifths vote of its members declaring that the
public interest and necessity demand the immediate expenditure of
public money to safeguard life, health, or property. Upon adoption of
the resolution, it may expend any sum required in the emergency
without complying with this chapter. If notice for bids to let
contracts will not be given, the legislative body shall comply with
Chapter 2.5 (commencing with Section 22050).

20168.5. In any city that has agreed to permit the transfer of
prisoners or parole violators under Section 2910 or 2910.5 of the
Penal Code, or of wards under Section 1753.3 of the Welfare and
Institutions Code, the city council may contract for the construction
or expansion of facilities to be used for that purpose without the
formality of obtaining bids, adopting plans and specifications, or
complying with other requirements of this article, except as required
by this section. The person to whom the contract is awarded shall
execute a bond for faithful performance. The award of the contract
shall be made after a public hearing on the basis of a request for
proposals advertised in accordance with Section 6062 or 6062a of the
Government Code. The contract may be awarded only to a contractor who
has responded to the request for proposals and who is licensed to do
the work in accordance with Chapter 9 (commencing with Section 7000)
of Division 3 of the Business and Professions Code. The contract
shall be upon terms which the city council determines are necessary
for the expeditious completion of the work. A contract shall not be
entered into unless at least three proposals to do the work have been
evaluated by a competitive process established by the city council
and the lowest bid is selected.

20169. Annually before the beginning of the fiscal year, in cities
where there is more than one newspaper of general circulation printed
and published, the legislative body shall publish a notice inviting
bids and contract for the publication of legal notices required to be
published in such a newspaper. The contract shall include the
printing and publishing of all such legal notices during the fiscal
year.
If there is only one such newspaper, the legislative body may
contract with it without advertising for bids.

20170. All bids shall be presented under sealed cover and
accompanied by one of the following forms of bidder's security:
(a) Cash.
(b) Cashier's check made payable to the city.
(c) A certified check made payable to the city.
(d) A bidder's bond executed by an admitted surety insurer, made
payable to the city.

20171. The security shall be in an amount equal to at least 10
percent of the amount bid. A bid shall not be considered unless one
of the forms of bidder's security is enclosed with it.

20172. If the successful bidder fails to execute the contract, the
amount of the bidder's security shall be forfeited to the city except
as hereinafter provided.

20173. The cash or proceeds shall be deposited in the fund out of
which the expenses of preparation and printing of the plans and
specifications, estimates of cost, and publication of notice are
paid.

20174. The city council may, on refusal or failure of the
successful bidder to execute the contract, award it to the next
lowest responsible bidder. If the legislative body awards the
contract to the second lowest bidder, the amount of the lowest bidder'
s security shall be applied by the city to the difference between the
low bid and the second lowest bid, and the surplus, if any, shall be
returned to the lowest bidder if cash or a check is used, or to the
surety on the bidder's bond if a bond is used.

20175.2. (a) (1) A city, with approval of the appropriate city
council, may utilize an alternative procedure for bidding on building
construction projects in the city in excess of one million dollars
($1,000,000), except as provided in subdivision (p).
(2) Cities may award the project using either the lowest
responsible bidder or by best value.
(b) (1) It is the intent of the Legislature to enable cities to
utilize cost-effective options for building and modernizing public
facilities. The Legislature also recognizes the national trend,
including authorization in California, to allow public entities to
utilize design-build contracts as a project delivery method. It is
not the intent of the Legislature to authorize this procedure for
transportation facilities, including, but not limited to, roads and
bridges.
(2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles and
responsibilities of each participant in the design-build process.
The Legislature also finds that the cost-effective benefits to cities
are achieved by shifting the liability and risk for cost containment
and project completion to the design-build entity.
(3) It is the intent of the Legislature to provide an alternative
and optional procedure for bidding and building construction projects
for cities.
(4) The design-build approach may be used, but is not limited to
use, when it is anticipated that it will: reduce project cost,
expedite project completion, or provide design features not
achievable through the design-bid-build method.
(5) (A) For contracts awarded prior to the effective date of
either the regulations adopted by the Department of Industrial
Relations pursuant to subdivision (b) of Section 1771.55 of the Labor
Code or the fees established by the department pursuant to
subparagraph (B), if a city council elects to proceed under this
section, the city council shall establish and enforce, for
design-build projects, a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code, or it
shall contract with a third party to operate a labor compliance
program containing the requirements outlined in Section 1771.5 of the
Labor Code. This requirement shall not apply to any project where
the city or the design-build entity has entered into any collective
bargaining agreement or agreements that bind all of the contractors
performing work on the projects.
(B) For contracts awarded on or after the effective date of both
the regulations adopted by the Department of Industrial Relations
pursuant to subdivision (b) of Section 1771.55 of the Labor Code and
the fees established by the department pursuant to this subparagraph,
the city council shall pay a fee to the department, in an amount
that the department shall establish, and as it may from time to time
amend, sufficient to support the department's costs in ensuring
compliance with and enforcing prevailing wage requirements on the
project, and labor compliance enforcement as set forth in subdivision
(b) of Section 1771.55. All fees collected pursuant to this
paragraph shall be deposited in the State Public Works Enforcement
Fund created by Section 1771.3 of the Labor Code, and shall be used
only for enforcement of prevailing wage requirements on those
projects.
(C) The Department of Industrial Relations may waive the fee set
forth in subparagraph (2) if the city council has previously been
granted approval by the director to initiate and operate a labor
compliance program on its projects and requests to continue to
operate that labor compliance program on its projects in lieu of
labor compliance by the department pursuant to subdivision (b) of
Section 1771.55. The fee shall not be waived for the city council if
it contracts with a third party to initiate and enforce labor
compliance programs on its projects.
(c) As used in this section:
(1) "Best value" means a value determined by objectives relative
to price, features, functions, and life-cycle costs.
(2) "Design-build" means a procurement process in which both the
design and construction of a project are procured from a single
entity.
(3) "Design-build entity" means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services, as needed,
pursuant to a design-build contract.
(4) "Project" means the construction of a building and
improvements directly related to the construction of a building, but
does not include streets and highways, public rail transit, or water
resource facilities and infrastructure.
(d) Design-build projects shall progress in a four-step process,
as follows:
(1) (A) The city shall prepare a set of documents setting forth
the scope of the project. The documents may include, but are not
limited to, the size, type, and desired design character of the
buildings and site, performance specifications covering the quality
of materials, equipment, and workmanship, preliminary plans or
building layouts, or any other information deemed necessary to
describe adequately the city's needs. The performance specifications
and any plans shall be prepared by a design professional who is duly
licensed and registered in California.
(B) Any architect or engineer retained by the city to assist in
the development of the project-specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.
(2) (A) Based on the documents prepared in paragraph (1), the city
shall prepare a request for proposals that invites interested
parties to submit competitive sealed proposals in the manner
prescribed by the city. The request for proposals shall include, but
is not limited to, the following elements:
(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the city to inform interested parties of the contracting
opportunity, to include the methodology that will be used by the
city to evaluate proposals, and specifically if the contract will be
awarded to the lowest responsible bidder.
(ii) Significant objective factors which the city reasonably
expects to consider in evaluating proposals, including cost or price
and all nonprice related factors.
(iii) The relative importance or weight assigned to each of the
factors identified in the request for proposals.
(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors, other than cost or price, when
combined are:
(i) Significantly more important than cost or price.
(ii) Approximately equal in importance to cost or price.
(iii) Significantly less important than cost or price.
(C) If the city chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately, or incorporate
into the request for proposal, applicable rules and procedures to be
observed by the city to ensure that any discussions or negotiations
are conducted in good faith.
(3) (A) The city shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by the
city. In preparing the questionnaire, the city shall consult with
the construction industry, including representatives of the building
trades and surety industry. This questionnaire shall require
information including, but not limited to, all of the following:
(i) If the design-build entity is a partnership, limited
partnership, or other association, a listing of all of the partners,
general partners, or association members known at the time of bid
submission who will participate in the design-build contract,
including, but not limited to, mechanical subcontractors.
(ii) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the design
and construction of the project, as well as a financial statement
that assures the city that the design-build entity has the capacity
to complete the project.
(iii) The licenses, registration, and credentials required to
design and construct the project, including information on the
revocation or suspension of any license, credential, or registration.
(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance bonding,
liability insurance, and errors and omissions insurance.
(v) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code or the
federal Occupational Safety and Health Act of 1970 (Public Law
91-596) settled against any member of the design-build entity, and
information concerning workers' compensation experience history and
worker safety program.
(vi) Information concerning any debarment, disqualification, or
removal from a federal, state, or local government public works
project. Any instance where an entity, its owners, officers, or
managing employees submitted a bid on a public works project and were
found to be nonresponsive, or were found by an awarding body not to
be a responsible bidder.
(vii) Any instance where the entity, its owners, officers, or
managing employees defaulted on a construction contract.
(viii) Any violations of the Contractors State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), excluding alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding, or
of Federal Insurance Contribution Act (FICA) withholding requirements
settled against any member of the design-build entity.
(ix) Information concerning the bankruptcy or receivership of any
member of the design-build entity, including information concerning
any work completed by a surety.
(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build entity during the five years preceding
submission of a bid pursuant to this section, in which the claim,
settlement, or judgment exceeds fifty thousand dollars ($50,000).
Information shall also be provided concerning any work completed by a
surety during this period.
(xi) In the case of a partnership or an association that is not a
legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be fully liable for the performance under the design-build
contract.
(xii) (I) Any instance in which the entity, or any of its members,
owners, officers, or managing employees was, during the five years
preceding submission of a bid pursuant to this section, determined by
a court of competent jurisdiction to have submitted, or legally
admitted for purposes of a criminal plea to have submitted either of
the following:
(ia) Any claim to any public agency or official in violation of
the federal False Claims Act (31 U.S.C. Sec. 3729 et seq.).
(ib) Any claim to any public official in violation of the
California False Claims Act (Article 9 (commencing with Section
12650) of Chapter 6 of Part 2 of Division 3 of the Government Code).
(II) Information provided pursuant to this subdivision shall
include the name and number of any case filed, the court in which it
was filed, and the date on which it was filed. The entity may also
provide further information regarding any such instance, including
any mitigating or extenuating circumstances that the entity wishes
the city to consider.
(B) The information required pursuant to this subdivision shall be
verified under oath by the entity and its members in the manner in
which civil pleadings in civil actions are verified. Information that
is not a public record pursuant to the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code) shall not be open to public inspection.
(4) The city shall establish a procedure for final selection of
the design-build entity. Selection shall be based on either of the
following criteria:
(A) A competitive bidding process resulting in lump-sum bids by
the prequalified design-build entities. Awards shall be made to the
lowest responsible bidder.
(B) The city may use a design-build competition based upon best
value and other criteria set forth in paragraph (2) of subdivision
(d). The design-build competition shall include the following
elements:
(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors shall
each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.
(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous to
the least.
(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.
(iv) Notwithstanding any provision of this code, upon issuance of
a contract award, the city shall publicly announce its award,
identifying the contractor to whom the award is made, along with a
written decision supporting its contract award and stating the basis
of the award. The notice of award shall also include the city's
second and third ranked design-build entities.
(v) For purposes of this paragraph, "skilled labor force
availability" shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the California
Apprenticeship Council, which has graduated apprentices in each of
the preceding five years. This graduation requirement shall not apply
to programs providing apprenticeship training for any craft that has
been deemed by the Department of Labor and the Department of
Industrial Relations to be an apprenticeable craft in the five years
prior to enactment of this act.
(vi) For purposes of this paragraph, a bidder's "safety record"
shall be deemed "acceptable" if its experience modification rate for
the most recent three-year period is an average of 1.00 or less, and
its average total recordable injury/illness rate and average lost
work rate for the most recent three-year period does not exceed the
applicable statistical standards for its business category, or if the
bidder is a party to an alternative dispute resolution system, as
provided for in Section 3201.5 of the Labor Code.
(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services and errors and omissions insurance coverage sufficient to
cover all design and architectural services provided in the contract.
This section does not prohibit a general or engineering contractor
from being designated the lead entity on a design-build entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.
(2) Any payment or performance bond written for the purposes of
this section shall be written using a bond form developed by the
city.
(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of paragraph
(3) of subdivision (d) shall be awarded by the design-build entity
in accordance with the design-build process set forth by the city in
the design-build package. All subcontractors bidding on contracts
pursuant to this section shall be afforded the protections contained
in Chapter 4 (commencing with Section 4100) of Part 1. The
design-build entity shall do both of the following:
(1) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the city.
(2) Provide a fixed date and time on which the subcontracted work
will be awarded in accordance with the procedure established pursuant
to this section.
(g) Lists of subcontractors, bidders, and bid awards relating to
the project shall be submitted by the design-build entity to the
awarding body within 14 days of the award. These documents are deemed
to be public records and shall be available for public inspection
pursuant to this chapter and Article 1 (commencing with Section 6250)
of Chapter 3.5 of Division 7 of the Government Code.
(h) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the city.
(i) The city may retain the services of a design professional or
construction project manager, or both, throughout the course of the
project in order to ensure compliance with this section.
(j) Contracts awarded pursuant to this section shall be valid
until the project is completed.
(k) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.
(l) (1) If the city elects to award a project pursuant to this
section, retention proceeds withheld by the city from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.
(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the city and the design-build entity. If the design-build
entity provides written notice to any subcontractor who is not a
member of the design-build entity, prior to or at the time the bid is
requested, that a bond may be required and the subcontractor
subsequently is unable or refuses to furnish a bond to the
design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the city and the design-build entity from any
payment made by the design-build entity to the subcontractor.
(m) Each city that elects to proceed under this section and uses
the design-build method on a public works project shall submit to the
Legislative Analyst's Office before December 1, 2014, a report
containing a description of each public works project procured
through the design-build process that is completed after January 1,
2011, and before November 1, 2014. The report shall include, but
shall not be limited to, all of the following information:
(1) The type of project.
(2) The gross square footage of the project.
(3) The design-build entity that was awarded the project.
(4) The estimated and actual project costs.
(5) The estimated and actual length of time to complete the
project.
(6) A description of any written protests concerning any aspect of
the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.
(7) An assessment of the prequalification process and criteria.
(8) An assessment of the effect of retaining 5 percent retention
on the project.
(9) A description of the Labor Force Compliance Program and an
assessment of the project impact, where required.
(10) A description of the method used to award the contract. If
the best value method was used, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor and
an assessment of the effectiveness of the methodology.
(11) An assessment of the project impact of "skilled labor force
availability."
(12) An assessment of the most appropriate uses for the
design-build approach.
(n) Any city that elects not to use the authority granted by this
section may submit a report to the Legislative Analyst's Office
explaining why the city elected not to use the design-build method.
(o) On or before January 1, 2015, the Legislative Analyst's Office
shall report to the Legislature on the use of the design-build
method by cities pursuant to this section, including the information
listed in subdivision (m). The report may include recommendations for
modifying or extending this section.
(p) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.
(q) Before January 1, 2011, the project limitation of one million
dollars ($1,000,000), as set forth in subdivision (a), shall not
apply to any city in the Counties of Solano and Yolo, or to the
Cities of Stanton and Victorville.
(r) This section shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.