SECTIONS 20688.1-20688.6 - California Statutes

PUBLIC CONTRACT CODE

SECTION 20688.1-20688.6

20688.1. The provisions of this article shall apply to contracts
awarded by entities as provided in Part 1 (commencing with Section
33000) of Division 24 of the Health and Safety Code.

20688.2. Any work of grading, clearing, demolition, or construction
undertaken by the agency shall be done by contract after competitive
bids if the cost of that work exceeds the amount specified in
Section 20162, as that section presently exists or may be hereafter
amended. With respect to work of grading, clearing, demolition, or
construction that is not in excess of that amount, the agency may
contract the work without competitive bids, and in contracting the
work may give priority to the residents of the redevelopment project
areas and to persons displaced from those areas as a result of
redevelopment activities.

20688.25. All bids for construction work shall be presented under
sealed cover and shall be accompanied by one of the following forms
of bidder's security:
(a) Cash.
(b) A cashier's check made payable to the local agency.
(c) A certified check made payable to the local agency.
(d) A bidder's bond executed by an admitted surety insurer, made
payable to the agency.
Upon an award to the lowest bidder, the security of an
unsuccessful bidder shall be returned in a reasonable period of time,
but in no event shall that security be held by the local agency
beyond 60 days from the time the award is made.

20688.3. (a) To the greatest extent feasible, opportunities for
training and employment arising from any contract for work to be
performed in connection with any redevelopment project shall be given
to the lower income residents of the project area.
(b) An agency with a resident population of less than 1,000
persons in its territorial jurisdiction, and with a secured assessed
valuation of not more than thirty million dollars ($30,000,000) as
shown on the 1978-79 assessment roll, may, by contract, obligate
lessees and purchasers of real property acquired in a redevelopment
project and owners of property improved as part of a redevelopment
project to give preference to training and employment, in businesses
to be conducted on the property, to residents of the project area
upon such terms and conditions as may be mutually agreed upon. In the
event that there is an agreement between the employer and a labor
organization which restricts the employer's ability to employ project
area residents, then such labor organization shall give preference
as to entry into the particular labor organization, and with respect
to employment in a business on the property, to residents of the
project area otherwise qualified.

20688.4. An agency shall require each successful bidder to file
with it good and sufficient bonds, to be approved by it. The bonds
shall be conditioned upon the faithful performance of the contract
and upon the payment of all claims for labor and material in
connection with the contract. The bonds shall contain the terms and
conditions set forth in Chapter 7 (commencing with Section 3247) of
Title 15 of Part 4 of Division 3 of the Civil Code and are subject to
the provisions of that chapter.

20688.4. An agency shall require each successful bidder to file
with it good and sufficient bonds, to be approved by it. The bonds
shall be conditioned upon the faithful performance of the contract
and upon the payment of all claims for labor and material in
connection with the contract. The bonds shall contain the terms and
conditions set forth in Chapter 5 (commencing with Section 9550) of
Title 3 of Part 6 of Division 4 of the Civil Code and are subject to
the provisions of that chapter.

20688.6. (a) (1) Notwithstanding any other law, an agency, with
approval of its duly constituted board in a public hearing, may
utilize an alternative procedure for bidding on projects in the
community in excess of one million dollars ($1,000,000) and may award
the project using either the lowest responsible bidder or by best
value.
(2) Only 10 design-build projects shall be authorized under this
section.
(b) (1) It is the intent of the Legislature to enable entities as
provided in Part 1 (commencing with Section 33000) of Division 24 of
the Health and Safety Code to utilize design-build for those
infrastructure improvements authorized in Sections 33421, 33445, and
33445.1 of the Health and Safety Code and subject to the limitations
on that authority described in Section 33421.1 of the Health and
Safety Code.
(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.
(3) (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 the board elects to proceed under this section,
the board 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 agency 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,
if the board elects to proceed under this section it 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 of the
Labor Code. 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.
(C) The Department of Industrial Relations may waive the fee set
forth in subdivision (b) for a board that has previously been granted
approval by the director to initiate and operate a labor compliance
program on its projects, and that requests to continue to operate the
labor compliance program on its projects in lieu of labor compliance
by the department pursuant to subdivision (b) of Section 1771.55.
This fee shall not be waived for a board that contracts with a third
party to initiate and enforce labor compliance programs on the board'
s projects.
(c) As used in this section:
(1) "Best value" means a value determined by objective criteria
related 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 those infrastructure improvements authorized
in Sections 33421, 33445, and 33445.1 of the Health and Safety Code
and subject to the limitations and conditions on that authority
described in Article 10 (commencing with Section 33420) and Article
11 (commencing with Section 33430) of Chapter 4 of Part 1 of Division
24 of the Health and Safety Code.
(d) Design-build projects shall progress in a four-step process,
as follows:
(1) (A) The agency 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
public improvement, 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 agency'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 agency 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 as described in paragraph
(1), the agency shall prepare a request for proposals that invites
interested parties to submit competitive sealed proposals in the
manner prescribed by the agency. 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 agency to inform interested parties of the
contracting opportunity, to include the methodology that will be used
by the agency to evaluate proposals and specifically if the contract
will be awarded to the lowest responsible bidder.
(ii) Significant factors that the agency reasonably expects to
consider in evaluating proposals, including cost or price and all
nonprice-related factors.
(iii) The relative importance of the 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 agency 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 agency to ensure that any discussions or negotiations
are conducted in good faith.
(3) (A) The agency shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by the
agency. In preparing the questionnaire, the agency 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 agency 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 (P.L. 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 in which 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 in which the entity, or 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), including alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding, or
of Federal Insurance Contributions 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, joint venture, or an
association that is not a legal entity, a copy of the agreement
creating the partnership or association and specifying that all
general partners, joint venturers, 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 agency 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) An agency may use a design-build competition based upon best
value and other criteria set forth in paragraph (2). 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 agency 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 agency'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 omission 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
agency.
(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 agency
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 agency.
(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 agency.
(h) The agency 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 agency elects to award a project pursuant to this
section, retention proceeds withheld by the agency 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 shall not exceed the percentage specified in the contract
between the agency 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 agency and the design-build entity from any
payment made by the design-build entity to the subcontractor.
(l) Each agency 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 after January 1, 2010, 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) Where appropriate, the estimated and actual length of time to
complete the project.
(5) The estimated and actual project costs.
(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
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.
(11) An assessment of the project impact of skilled labor force
availability.
(12) An assessment of the design-build dollar limits on agency
projects. This assessment shall include projects where the agency
wanted to use design-build and was precluded by the dollar
limitation. This assessment shall also include projects where the
best value method was not used due to dollar limitations.
(13) An assessment of the most appropriate uses for the
design-build approach.
(m) (1) In order to comply with paragraph (2) of subdivision (a),
the State Public Works Board is required to maintain the list of
agencies that have applied and are eligible to be qualified for this
authority.
(2) Each agency that is interested in proceeding under the
authority in this section must apply to the State Public Works Board.
The application to proceed shall be in writing and contain such
information that the State Public Works Board may require.
(3) The State Public Works Board shall approve or deny an
application, in writing, within 90 days of the submission of a
complete application. The authority to deny an application shall only
be exercised if the condition set forth in paragraph (2) of
subdivision (a) has been satisfied.
(4) An agency that has applied for this authorization shall, after
it determines it no longer is interested in using this authority,
notify the State Public Works Board in writing within 30 days of its
determination. Upon notification, the State Public Works Board may
contact any previous applicants, denied pursuant to paragraph (2) of
subdivision (a), to inform them of the availability to proceed under
this section.
(5) The State Public Works Board may authorize no more than 10
projects. The board shall not authorize or approve more than two
projects for any one eligible redevelopment agency that submits a
completed application.
(6) The State Public Works Board shall notify the Legislative
Analyst's Office when 10 projects have been approved.
(n) On or before January 1, 2015, the Legislative Analyst shall
report to the Legislature on the use of the design-build method by
agencies pursuant to this section, including the information listed
in subdivision (l). The report may include recommendations for
modifying or extending this section.
(o) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.
(p) 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.