SECTIONS 20193-20195 - California Statutes

PUBLIC CONTRACT CODE

SECTION 20193-20195

20193. (a) (1) Notwithstanding any other law and subject to the
limitations of this article, a qualified entity, with approval of its
governing body, may utilize an alternative procedure on bidding on
projects in excess of two million five hundred thousand dollars
($2,500,000).
(2) Only 20 design-build projects shall be authorized under this
article.
(3) A qualified entity may award a project using either the lowest
responsible bidder or by best value.
(4) For purposes of this article, "qualified entity" means an
entity that meets both of the following:
(A) The entity is any of the following:
(i) A city.
(ii) A county.
(iii) A city and county.
(iv) A special district.
(B) The entity operates wastewater facilities, solid waste
management facilities, or water recycling facilities.
(b) (1) 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 paragraph
(2), if a qualified entity elects to proceed under this section, the
qualified entity 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 qualified entity
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.
(2) 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 paragraph,
the qualified entity 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
subdivision 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.
(3) The Department of Industrial Relations may waive the fee set
forth in paragraph (2) if the qualified entity 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 qualified entity
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 objective criteria
related to price, features, functions, small business contracting
plans, past performance, 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 regional and local
wastewater treatment facilities, regional and local solid waste
facilities, or regional and local water recycling facilities.
(d) Design-build projects shall progress in a four-step process,
as follows:
(1) (A) The qualified entity 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 project and site, performance specifications covering the
quality of materials, equipment, and workmanship, preliminary plans
or project layouts, or any other information deemed necessary to
describe adequately the qualified entity'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 qualified entity 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
qualified entity shall prepare a request for proposals that invites
interested parties to submit competitive sealed proposals in the
manner prescribed by the qualified entity. 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 qualified entity to inform interested parties of the
contracting opportunity, to include the methodology that will be
used by the qualified entity to evaluate proposals and specifically
if the contract will be awarded to the lowest responsible bidder.
(ii) Significant factors that the qualified entity reasonably
expects to consider in evaluating proposals, including cost or price
and all nonprice related factors.
(iii) The relative importance of 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 qualified entity 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 qualified entity 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 qualified entity to ensure that any
discussions or negotiations are conducted in good faith.
(3) (A) The qualified entity shall establish a procedure to
prequalify design-build entities using a standard questionnaire
developed by the qualified entity. In preparing the questionnaire,
the qualified entity 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 special district 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 owner, 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 other association, that is
not a legal entity, a copy of the agreement creating the partnership
or association and specifying that all partners or association
members agree to be fully liable for the performance under the
design-build contract.
(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 qualified entity 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) A qualified entity 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 qualified entity shall publicly announce its
award, identifying the contractor to which 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
qualified entity'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 their experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and their average total recordable injury/illness rate and average
lost work rate for the most recent three-year period does not exceed
the applicable statistical standards for its business category, 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
qualified entity.
(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
qualified entity 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 qualified
entity.
(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) 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 qualified
entity.
(h) The qualified entity 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.
(i) Contracts awarded pursuant to this section shall be valid
until the project is completed.
(j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.
(k) (1) If the qualified entity elects to award a project pursuant
to this section, retention proceeds withheld by the qualified entity
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 qualified entity 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 qualified entity and the design-build entity
from any payment made by the design-build entity to the
subcontractor.
(l) Each qualified entity that elects to proceed under this
section and uses the design-build method on a public works project
shall do both of the following:
(1) Notify the Legislative Analyst's Office upon initiation of the
project and upon completion of the project.
(2) Submit to the Legislative Analyst's Office, upon completion of
the project, a report containing a description of the public works
project procured through the design-build process pursuant to this
section and completed after January 1, 2009. The report shall
include, but shall not be limited to, all of the following
information:
(A) The type of project.
(B) The gross square footage of the project.
(C) The design-build entity that was awarded the project.
(D) The estimated and actual project costs.
(E) 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.
(F) An assessment of the prequalification process and criteria.
(G) An assessment of the effect of retaining 5-percent retention
on the project.
(H) A description of the Labor Force Compliance Program and an
assessment of the project impact, where required.
(I) A description of the method used to award the contract. If
best value was the method, 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.
(J) An assessment of the project impact of "skilled labor force
availability."
(K) An assessment of the most appropriate uses for the
design-build approach.
(m) Any qualified entity that elects not to use the authority
granted by this section may submit a report to the Legislative
Analyst's Office explaining why the qualified entity elected to not
use the design-build method.
(n) (1) In order to comply with paragraph (2) of subdivision (a),
the Office of Planning and Research is required to maintain the list
of entities that have applied and are eligible to be qualified for
this authority.
(2) Each entity that is interested in proceeding under the
authority in this section must apply to the Office of Planning and
Research.
(A) The application to proceed must be in writing.
(B) An entity must have complied with the California Environmental
Quality Act review process pursuant to Division 13 (commencing with
Section 21000) of the Public Resources Code prior to its application,
and must include its approved notice of determination or notice of
completion in its application.
(3) The Office of Planning and Research must approve or deny an
application, in writing, within 30 days. The authority to deny an
application shall only be exercised if the conditions set forth in
either or both paragraph (2) of subdivision (a) and subparagraph (B)
of paragraph (2) of this subdivision have not been satisfied.
(4) An entity utilizing this section must, after it determines it
no longer is interested in using this authority, notify the Office of
Planning and Research in writing within 30 days of its
determination. Upon notification, the Office of Planning and Research
may contact any previous applicants, denied pursuant to paragraph
(2) of subdivision (a), to inform them of the availability to proceed
under this section.
(o) The Legislative Analyst shall report to the Legislature on the
use of the design-build method by qualified entities pursuant to
this section, including the information listed in subdivision (l).
The report may include recommendations for modifying or extending
this section, and shall be submitted on either of the following
dates, whichever occurs first:
(1) Within one year of the completion of the 20 projects, if the
projects are completed prior to January 1, 2019.
(2) No later than January 1, 2020.

20194. (a) The authority for design-build projects contained in
this article is a new and independent authorization and shall not
supersede, limit, or restrict any other statutory design-build
authorization.
(b) It is the intent of the Legislature in enacting this article
to establish a pilot project for cities, counties, cities and
counties, and special districts to utilize the design-build
procurement method for regional or local water or wastewater
treatment facilities, regional or local solid waste facilities, and
regional and local water recycling facilities, and to assess the
effectiveness of the use of the design-build procurement method. It
is not the intent of the Legislature by enacting this measure to
authorize the design-build procurement method for other
infrastructure, including, but not limited to, streets and highways,
public rail transit, or other types of water resource facilities.
(c) Nothing in this article shall be construed to change the
authority of a state department, agency, board, or commission.
(d) A qualified entity may use state funds for projects utilizing
the design-build procedure.
(e) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.

20195. This article shall remain in effect until January 1, 2020,
or until the date upon which the Legislative Analyst has submitted
the report required pursuant to this article to the Legislature,
whichever occurs first, and as of the date is repealed, unless a
later enacted statute, that is enacted before either of the dates
specified in this section, deletes or extends those dates.