HomeMy WebLinkAboutLegislative Review - AB 222 (Bogh) - Labor ComplianceCITY OF PALM DESERT
COMMUNITY SERVICES DEPARTMENT
STAFF REPORT
REQUEST: CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE
ACTION ON AB 222 (BOGH) AT ITS MEETING OF FEBRUARY 22,
2005
DATE: March 10, 2005
CONTENTS: AB 222 Language
Recommendation:
By Minute Motion, concur with the action taken by the Legislative Review Committee at its
meeting of February 22, 2005, and direct staff to prepare a letter of opposition for the
Mayor's signature with regard to AB 222 (Bogh) relative to labor compliance.
Executive Summary:
Passage of AB 222 would require local agencies to post notification on public works
projects where prevailing wages are not being paid.
Background:
Existing law requires the payment of prevailing wages to per diem workers employed on
public works projects and requires local agencies to initiate and enforce labor compliance
but does allow awarding bodies to enter into contracts with third parties to initiate and
enforce labor compliance programs.
AB 222 would eliminate current legislative provisions that authorize local entities to enter
into contracts with a third party to initiate and enforce labor compliance programs. It
would, instead, require the awarding body of a public works project to post a notice
advising per diem workers that do not receive prevailing wages on public works projects
to contact the Division of Labor Standards Enforcement.
entities contracting for public works projects and the benefit and/or need of local
governments assuming this responsibility is not outlined in the bill's language. In addition,
its passage would create an unfunded State mandate, which Palm Desert would be
required to enforce, thereby removing local control over the manner in which the City
conducts its day -to -day business. Therefore, the Legislative Review Committee
recommends that the City Council oppose AB 222 and direct staff to prepare of a letter
stating that position to appropriate legislators for the Mayor's signature.
PATRICIA SCULLY, CFEE
SENIOR MANAGEMENT ANAL
HEILA R. GL GAN
PAUL S. GIBSON
DIR OF FINANCE/CITY TREASURER
CARLOS L. ORTI A
ASSISTANT CITY MA LII R/PIO CITY MANAGE
AB 222 Assembly Bill - INTRODUCED Page 1 of 22
BILL NUMBER: AB 222 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Bogh
FEBRUARY 3, 2005
An act to amend Sections 17250.30 and 81704 of the Education Code,
to amend Section 6531 of, and to repeal Section 61620.1 of, the
Government Code, to add Section 1771.3 to, and to repeal Sections
1771.5, 1771.7, 1771.8, and 1771.9 of, the Labor Code, and to amend
Sections 20133, 20175.1, 20209.7, and 20919.3 of the Public Contract
Code, relating to public contracts.
LEGISLATIVE COUNSEL'S DIGEST
AB 222, as introduced, Bogh. Public works: labor compliance:
prevailing wages.
(1) Existing law generally requires the payment of the general
prevailing rate of per diem wages to workers employed on public works
projects costing over $1,000, unless the awarding body, as defined,
elects to initiate and enforce a labor compliance program, as
defined, for every public works project under the authority of that
awarding body. Existing law, for specified programs and public works
projects, as a condition of that program or public works project,
requires an awarding body to initiate and enforce a labor compliance
program. Existing law generally authorizes an awarding body to enter
into a contract with a third party to initiate and enforce a labor
compliance program.
This bill would eliminate the provisions that authorize and
require the initiation and enforcement of a labor compliance program,
and instead, would require an awarding body to post a notice, as
specified, advising workers that do not receive the prevailing rate
of per diem wages for work performed on a public works project to
contact the Division of Labor Standards Enforcement.
(2) The California Constitution prohibits the passage of a law
that would impair the obligation of contracts.
This bill would provide that its provisions shall not be construed
or applied in a manner that would impair the obligations of
contracts in violation of the California Constitution.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State -mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17250.30 of the Education Code is amended to
read:
17250.30. (a) Any design -build entity that is selected to design
and build a project pursuant to this chapter 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 chapter does not prohibit a general or engineering contractor
from being designated the lead entity on a design -build entity for
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AB 222 Assembly Bill - INTRODUCED Page 2 of 22
the purposes of purchasing necessary bonding to cover the activities
of the design -build entity.(b) Any payment or performance bond
written for the purposes of this chapter shall use a bond form
developed by the Department of General Services pursuant to
subdivision (i) of Section 14661 of the Government Code. The purpose
of this subdivision is to promote uniformity of bond forms to be used
on school district design -build projects throughout the state.
(c) (1) All subcontracts that were not listed by the design -build
entity in accordance with Section 17250.25 shall be awarded by the
design -build entity.
(2) The design -build entity shall do all of the following:
(A) Provide public notice of the availability of work to be
subcontracted.
(B) Provide a fixed date and time on which the subcontracted work
will be awarded.
(3) Subcontractors bidding on contracts pursuant to this
subdivision shall be afforded the protections contained in Chapter 4
(commencing with Section 4100) of Part 1 of Division 2 of the Public
Contract Code.
(4) In a contract between the design -build entity and a
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 school district 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 school district and the design -build entity from
any payment made by the design -build entity to the subcontractor.
(5) In accordance with the provisions of applicable state law, the
design -build entity may be permitted to substitute securities in
lieu of the withholding from progress payments. Substitutions shall
be made in accordance with Section 22300 of the Public Contract Code.
(d) Th sch 1 district shall stsblish and of re a lab r
c mplianc pr gram c ntaining the r quir m ntE utlin d in S cti n
laTi =._n btiT nIQQ,- C'x'e or shall contract with a third party to
outlin d in S cti n 1771.5 f th Lab r C d . ThiE r quir m nt Ehall
--Lu_ -vbe contractor£ porforming -pork on tho prof oct _
SEC. 2. Section 81704 of the Education Code is amended to read:
81704. (a) Any design -build entity that is selected to design and
build a project pursuant to this chapter 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 chapter 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.(b) Any payment or performance bond
written for the purposes of this chapter shall use a bond form
developed by the Department of General Services pursuant to
subdivision (i) of Section 14661 of the Government Code. The purpose
of this subdivision is to promote uniformity of bond forms to be used
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AB 222 Assembly Bill - INTRODUCED Page 3 of 22
on community college district design -build projects throughout the
state.
(c) (1) All subcontracts that were not listed by the design -build
entity in accordance with Section 81703 shall be awarded by the
design -build entity in accordance with the design -build process set
forth by the community college district in the design -build package.
(2) The design -build entity shall do all of the following:
(A) Provide public notice of the availability of work to be
subcontracted.
(B) Provide a fixed date and time on which the subcontracted work
will be awarded.
(3) Subcontractors bidding on contracts pursuant to this
subdivision shall be afforded the protections contained in Chapter 4
(commencing with Section 4100) of Part 1 of Division 2 of the Public
Contract Code.
(4) In a contract between the design -build entity and a
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 community college district 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 community college district and the design
-build entity from any payment made by the design -build entity to the
subcontractor.
(5) In accordance with the provisions of applicable state law, the
design -build entity may be permitted to substitute securities in
lieu of the withholding from progress payments. Substitutions shall
be made in accordance with Section 22300 of the Public Contract Code.
(d) The c mmunity c llege district shall establish and enf rce a
]aor complianco program containing the requirements outlinod in
r ch111 c ntract with +r;rd rty
to Dporilto o labor oomplionoo ?v a.n.g. 6F1; 46.=ntc
r rk r the design -build
agr m nt that binds
SEC. 3. Section 6531 of the Government Code is amended to read:
6531. (a) The Legislature finds and declares all of the
following:(1) It is in the best interests of communities located
within the City of San Diego for the local public agencies that have
jurisdiction within the city to form a joint powers agency to provide
for the orderly and coordinated acquisition, construction, and
development of model school projects. These projects may include the
acquisition of land by negotiation or eminent domain, the
construction of schools, the construction of recreational facilities
or park sites or both, and the construction of replacement and other
housing, including market rate, moderate -income, and low-income
housing.
(2) The coordinated construction of these projects by
redevelopment agencies, school districts, housing authorities,
housing commissions, and the city is of great public benefit and will
save public money and time in supplying much needed replacement
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AB 222 Assembly Bill - INTRODUCED Page 4 of 22
housing lost when schools are constructed within existing
communities.
(3) Legislation is needed to allow redevelopment agencies, school
districts, housing authorities, housing commissions, and the city to
use their powers to the greatest extent possible to expedite,
coordinate, and streamline the construction and eventual operation of
such projects.
(b) (1) Notwithstanding any other provision of law, the
Redevelopment Agency of the City of San Diego, the Housing Authority
of the City of San Diego, the San Diego Housing Commission, the San
Diego Unified School District, and the City of San Diego may enter
into a joint powers agreement to create and operate a joint powers
agency for the development and construction of a model school project
located within the City Heights Project Area. The agency created
pursuant to this section shall be known as the San Diego Model School
Development Agency. The San Diego Model School Development Agency
shall have all the powers of a redevelopment agency pursuant to Part
1 (commencing with Section 33000) of Division 24 of the Health and
Safety Code, all of the powers of a housing authority pursuant to
Part 2 (commencing with Section 34200) of Division 24 of the Health
and Safety Code, and all of the powers of the San Diego Unified
School District, as well as all the powers of a joint powers agency
granted pursuant to this chapter, to acquire property and to
construct and improve and finance one or more schools, housing
projects, parks, recreational facilities, and any other facilities
reasonably necessary for their proper operation. Further, the San
Diego Model School Development Agency shall have all of the powers of
the City of San Diego pursuant to its charter and state law to
acquire property and to finance and operate parks and recreational
facilities and any other facilities reasonably necessary for their
proper operation.
(2) Notwithstanding paragraph (1), neither the San Diego Model
School Development Agency nor the Redevelopment Agency of the City of
San Diego shall expend any property tax increment revenues to
acquire property, and to construct, improve, and finance a school
within the City Heights Project Area.
(3) Nothing in this section shall relieve the San Diego Model
School Development Agency or the Redevelopment Agency of the City of
San Diego from its obligations to increase, improve, and preserve the
community's supply of low - and moderate -income housing, including,
but not limited to, the obligation to provide relocation assistance,
the obligation to provide replacement housing, the obligation to meet
housing production quotas, and the obligation to set aside property
tax increment funds for those purposes.
(4) The San Diego Model School Development Agency shall perform
any construction activities in accordance with the applicable
provisions of the Public Contract Code, the Education Code, and the
Labor Code that apply, respectively, to the redevelopment agency,
housing authority, housing commission, school district, or city
creating the San Diego Model School Development Agency. Funding
pursuant to Proposition MM, a local San Diego County bond measure
enacted by the voters for the purpose of school construction, shall
be used only for the design, development, construction, and financing
of school -related facilities and improvements, including schools, as
authorized and to the extent authorized under Proposition MM.
(c) Any member of the joint powers agency, including the school
district, may, to the extent permitted by law, transfer and
contribute funds to the agency, including bond funds, to be deposited
into and to be held in a facility fund to be expended for purposes
of the acquisition of property for, and the development and
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AB 222 Assembly Bill - INTRODUCED Page 5 of 22
construction of, any school, housing project, or other facility
described in this section.
(d) Nothing contained in this section shall preclude the joint
powers agency from distributing funds, upon completion of
construction, the school, housing project, park, recreational
facility, or other facility to a member of the agency to operate the
school, housing project, park, or other facility that the member is
otherwise authorized to operate. These distribution provisions shall
be set forth in the joint powers agreement, if applicable.
(e) The San Diego Model School Development Agency may construct a
school in the City Heights Project Area pursuant to Chapter 2.5
(commencing with Section 17250.10) of Part 10.5 of the Education
Code.
(f) The San Diog M dol School Development Agoncy shall
octablich and of rc , with r sp ct t c nctructi n c ntractc award d
th requir m nts utlined in Secti n 17T1.5 f the Lab r C d r
^empliaac
'�rratlae j int
powers agon^y frcm oper-t;ng a labor compliance proy--va with rospoct
t th se p t,.
(g) — Construction workers
employed as apprentices by contractors and subcontractors on
contracts awarded by the San Diego Model School Development Agency
shall be enrolled in a registered apprenticeship program, approved by
the California Apprenticeship Council, that has graduated
apprentices in the same craft in each of the preceding five years.
This graduation requirement shall be applicable for any craft that
was first deemed by the Department of Labor and the Department of
Industrial Relations to be an apprenticeable craft prior to January
1, 1998. A contractor or subcontractor need not submit contract award
information to an apprenticeship program that does not meet the
graduation requirements of this subdivision. If no apprenticeship
program meets the graduation requirements of this subdivision for a
particular craft, the graduation requirements shall not apply for
that craft.
SEC. 4. Section 61620.1 of the Government Code is repealed.
61620.1. The re"nty of San J aquin shall maintain a lab r
for
SEC. 5. Section 1771.3 is added to the Labor Code , to read:
1771.3. (a) Each awarding body shall post a notice, as described
in subdivision (b), at the site of each public works project that is
subject to the provisions of this chapter.(b) The notice shall be on
a sign or poster that is at least 40 inches wide and 30 inches high
and shall contain the following:
(1) A statement that all workers performing work on the public
project are paid the general prevailing rate of per diem wages in
accordance with the standards set forth in Section 1773 of the Labor
Code.
(2) A statement that advises any person performing work on the
public project that is not paid the general prevailing rate of per
diem wages to contact the Divisions of Labor Standards Enforcement of
the Department of Industrial Relations.
(3) The current toll -free telephone number for contacting the
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AB 222 Assembly Bill - INTRODUCED Page 6 of 22
r gulati ne, by th
(d) F r purp c c
Division of Labor Standards Enforcement of the Department of
Industrial Relations.
(4) A description of the public works project, including any
identifying job numbers or codes.
SEC. 6. Section 1771.5 of the Labor Code is repealed.
1771 5 (a) Notwithstanding Section 1771, an awarding rely may
n t require the paym nt f the general prevailing ra.+-e f per di r
'rag s r the general prevailing rate f per diom wag c for h liday
th ucand liars ($25,000) r less wh n th^ pr^j ct is f'
u r'-, r f r any p'tihlic '-' rks pr j ct f fift n
th ucand d llarc ($15,000) r 1 ss wh n th pr j ct is f r
r^ w rk, if th awarding
pureuant t subdivisi n (b) f r very public w rks pr j ct under th
authority of tho awarding }aody. (b) For tho purpoces of this soction,
a lab r c mplianc pr gram shall includ , but n t b limit d t , th
(1) All bid invitati ns
1-eal ' elecfr t L'�1'f1'f�
and public w rks c ntracts shall c ntain
appr print languag c nc rning r.
(2) A pr j b cenferenea shall be ^eari,u-ted vx-tith the c ntract r and
„b^^nt ^+ to d c -,,,f1.---t-,,+-e lab r law r quir m nts
p rjury.
(4) Th awarding }a dy shall reu;_e'', and, if appr print , audit
payr 11 re^ rds t verify c mpliance with this chapter_
(5) Th awarding body shall withhold c ntract paymonts wh n
payroll rocordc are In-1 -Liar—Fir-at_ Qr_ 4 a-xlrvpLato _
(6) Th awarding b dy ehall withh ld c ntract paym ntc oqual t
the--arnnz'Dt -v{ '1J^'4' .yment and applicarale p realties -rhon, aft r
(c) F r purp c c f this chapt r, "lab r c mplianc pr gram" m anc
a im thi ap red, as sp cifi d in stat
Dir ct r f th D partm nt f Inductrial
f this chapter, the Direct r f tho D partm nt
pr gram in th mann r spocifi d in stato rogulati ns_
SEC. 7. Section 1771.7 of the Labor Code is repealed.
1771.7. (a) An awarding }a dy that ch sos t use funds d
fr m ith r th Kind rgart n-Univ rcity Public Educati n Facilitioc
R'vn'4 A^.t ^f 2002 or the hind-,- --lj-a J-,r`psTixt's-emcLt-yL74t1pt; c
Faciliti s B nd Act f 2004 for a public werk_s proj^^+, _11
—v_^er ast with a t ird party t initiat and
0-f '4-ir — -771.5, with r cp ct to that public w rkc pr j ct. (b) Thic
to per' Lr werY_s that cem it nc^ aft r Apri l ,
2003. F r purp s s f this subdivisi n, t-r rk perfermad during the
docign and pr c nctructi n phas c f c nctructi n, including, but n t
; nsre^t4er 2n4 lmad s'i.rveying werk_, de-Nr net cz'a^t4artSr_
th c mm nc m nt f a public w rk.
(c) (1) For purp see of this cn.zap"a f th
subdivisi n (a), th n th "awarding b dy" is th Chanc 11 r f th
Calif rnia State Univ rsity. F r purp c s f ca-}a-H; =zic4 -)o, Lf
th chanc 11 r is r quir d by cubdivisi n (a) t initiato and
o. f^re^, to oontraet with a thirst—t art,'tc�i^;t4 -Lte and onforco,
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AB 222 Assembly Bill - INTRODUCED Page 7 of 22
th labor c ipliance pr grain d ecr4hr-L,a_+1Q.74aihrk-1-1=4r_4n»_, +h n ir}
cubdivici n (b) f Secti n 1771.5, th Chancell r f the Calif rnia
State Llniuersit�. shall re 'iow the�.es}r^' c:�� de^rrtbr» , ^
paragraphs (3) and (4) f subdivisi n (b) f Secti n 1771. t
' ays a '"e''s�'' ��ab;,s to •,slbi'6 tklo airaxe'si''- s}�e63�==8 cornr'w�..r cQ With
th lab r c mpliance pr gram.
(2) F r purp sea f this subdivisi n, if an awarding b dy
campuc f that univ rcity, and that awarding b dy is r quir d
„txa;tz;r; r (a) to initiato ,a
it_i�J_4 vuL�rf�rro
t ,..ren}p_ tie program doscrib d
in that su divisi n, then in additi n t th r quir m nts imp s d
own =..i=tea; g subdivi '4 ^rah) f Secti n 1 -rl. 5, trn
payr 11 rec rds described in paragraphs (3) and (1) f subdivisi n
(b) f °^cti n 1r''1.5 shall b^ rovi 1--d n at 1 ast a m nthly basi
pr gram.
(d) (1) An awarding b dy described 5n subdivisi n (a) shall mak_o a
rr hac contractod with a third p=rty to initiato and onforco, the
lab r c mpliance pr gram describ d in subdivision-( -
sch 1 district, the g verning body f that district shall transmit
t th Stat All cati n B ard, in the manner determined by that
c py of tho finding doscrilse-�-1-1-clgrl.ph (1)
(B) Th Stat 7111 cati n B ard may n t release th funds d scrib d
in cubdivicion (a) to an awarding body that is a school district
doccribod in paragraph (1).
(C) If tho Stato Allocation Board conducts a postai-rard au
h;; ( ) + =n awarding body thak is a sehnni-da; ^+ +b
Stato All cati n Board shall verify, in tho mannor dotorminod by that
b ard, that th sch 1 district has c rpliod with th r quir m ntc
of this subdivisi n.
(3) If an awarding b dy d scribod in subdivisi n (a) is a
Univ rcity, r the ffice f the President f tho Univ rcity f
r any c-vv.pvie of tido Univ rcity f Calif rnia, that
Dir ct r f th D partm nt f Industrial R lati ns, a c py f th
finding d scrib d in paragraph (1) t tho cliroctor f that
depart, ont -or' th d r ator „� �L_ av rr�fi��v�rw^ +b vt_ t^
h urs laws.
() N twithstanding S cti n 17070.63 f the Educati n C d, f r
grant am untc as d ccrib d in Chapt r 12.5 (c mm ncing with Soction
17070.10) f Part 10 f Divisi n 1 f Title 1 f tho Education C d
bt�iD_it_l :t ire lD,"a
rnf rc "e-t f the Alas—c-vuep' -Loire program_
SEC. 8. Section 1771.8 of the Labor Code is repealed.
177t.A_ (a) The belly aw r'iiag m y c^ntract for a pah. ;4- s-i rkc
pr j ct financ d in any part with funds made availabl by th Wat r
Socurity, Cl an Drinking Wat r, C astal and B ach Pr t cti n Act L.
2002 (Divici n 26.5 (c mm ncing with Sec*ien 795A0) of the Water
C^-pry ^b. f;hp+ - *Lrt-.o£n _'- - 1).r ^antra^t with a third party t
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AB 222 Assembly Bill - INTRODUCED Page 8 of 22
(b) f Socti n 1771.5 f r applicati n t that public works prcjo.
(b) This secti n shall bac me perative m y if the Water Security,
Cl an Drinking Water, C astal aril goach Rretact;.rvL—ar-*_-,�2f1r1�
(Divici n 26.5 (c mmen^41ag with-Sru 4-ea 79500) f the Wator C de) is
appr vod by th v t re at tho N v mb r 5, 2002, statewide g neral
,rl a6*'rtiA.
SEC. 9. Section 1771.9 of the Labor Code
is repealed.
LL]a- c*ic^ 27Q4) of Pivisi n 3 f tho
pursuant t subdivision (b) of Section 1771.5 for application to that
public w rks pr jact (b) Thic c cti n shall b c m^ p rativ m y if
C ntury (Chapt r 20 (c mm ncing with S cti n 2701) f Divisi n 3 f
*b�C*�^ts and Highways C de) is arprevod by th v tars at the
(c) Th D partm nt f Industrial P. lati nc' and th Lab r and
�^�r--rlianc� pr gramc, int r st d parti e, and awarding b di c
1�r�ra tit^�Lr•tit�h�v�{� n^Ling prej ctc, that ar g v rn d by th
^ct� ^f a state agency with r sp nsibility f r administratienDf the
(d) of S cti n 16727 f tho Covornmont C d . Public w rkc corvicoc
under this chapter ineludo a.].J.m.Qti{ *he fe,11,Q4.1-1-4g:
(1) Pr vailing wage measurement and setting.
(2) Wag p titi ns an sp cial d t rminati nc.
f, lab r c mplianc pr gramc' ctablichm nt and onf rc m nt n tic c
t withh ld.
(4) Civil wage and p nalty ass ssm nts.
(5) H arings in r sp ns t c ntract r r qu sts and r subdivisi n
(b) f S cti n 1171.6, S cti n 1742, and S cti n 1777.7.
SEC. 10. Section 20133 of the Public Contract Code is amended to
read:
20133. (a) (1) This section provides for an alternative procedure
on bidding on building construction projects in excess of ten
million dollars ($10,000,000) applicable only in the Counties of
Alameda, Contra Costa, Sacramento, Santa Clara, Solano, Sonoma, and
Tulare, upon approval of the appropriate board of supervisors.(2) For
projects with costs ranging from ten million dollars ($10,000,000)
to twenty million dollars ($20,000,000), inclusive, the contract
shall be awarded to the lowest responsible bidder. For projects
costing over twenty million dollars ($20,000,000), the county 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
these counties to utilize cost-effective options for building and
modernizing public facilities. The Legislature also recognizes the
national trend, including authorizations in California, to allow
public entities to utilize design -build contracts as a project
delivery method.
(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 benefits of a design -build contract project delivery system
include an accelerated completion of the projects, cost containment,
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AB 222 Assembly Bill - INTRODUCED Page 9 of 22
reduction of construction complexity, and reduced exposure to risk
for the county. The Legislature also finds that the cost-effective
benefits to the counties 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 these counties.
(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) If th b and f sup rvic rs 1 ctc t pr c d and r thic
design -build projects a lab r compliance program c ntaining tho
Zab r C do_ This r quirement shall not apply t any pr ject wh ro
p rf rming .i rk n th pr j cts .
(c) As used in this section:
(1) "Best value" means a value determined by objective criteria
and may include, but is not limited to, price, features, functions,
life -cycle costs, and other criteria deemed appropriate by the
county.
(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.
(d) Design -build projects shall progress in a four -step process,
as follows:
(1) (A) The county 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 county'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 county 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
county shall prepare a request for proposals that invites interested
parties to submit competitive sealed proposals in the manner
prescribed by the county. 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 county to inform interested parties of the
contracting opportunity, to include the methodology that will be used
by the county to evaluate proposals and specifically if the contract
will be awarded to the lowest responsible bidder.
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AB 222 Assembly Bill - INTRODUCED Page 10 of 22
(ii) Significant factors which the county 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 paragraph (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 county 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 county to ensure that any discussions or negotiations
are conducted in good faith.
(3) (A) The county shall establish a procedure to prequalify
design -build entities using a standard questionnaire developed by the
county. In preparing the questionnaire, the county 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 county 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
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AB 222 Assembly Bill - INTRODUCED Page 11 of 22
(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, Division 7, Title 1 of the Government Code) shall not
be open to public inspection.
(4) The county 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 county 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
collectively represent at least 50 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 county 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 county's
second and third ranked design -build entities.
(v) For the 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
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AB 222 Assembly Bill - INTRODUCED Page 12 of 22
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 the 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 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
county.
(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 county
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 county.
(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 county.
(h) The county 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 county elects to award a project pursuant to this
section retention proceeds withheld by the county 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 county and the design -build entity. If the design -build
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AB 222 Assembly Bill - INTRODUCED Page 13 of 22
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 county and the design -build entity from any
payment made by the design -build entity to the subcontractor.
(1) Each county 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, the Senate Committee on Local
Government, and the Assembly Committee on Local Government before
December 1, 2004, a report containing a description of each public
works project procured through the design -build process, and
completed on or before November 1, 2004. The report shall include,
but shall not be limited to, all of the following information:
(1) The type of facility.
(2) The gross square footage of the facility.
(3) The design -build entity who was awarded the project.
(4) 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 impact 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 factors used to evaluate the bid shall
be described, 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 county
projects. This shall include projects where the county wanted to use
design -build and was precluded by the dollar limitation. It shall
also include projects where the best value method of awarding
contracts was not used, due to dollar limitations.
(13) An assessment of the most appropriate uses for the
design -build approach.
(m) Any county named in this section that elects to not use the
authority granted herein may also submit a report to the entities
named and in accordance with the schedule in subdivision (1). This
report may include an analysis of why the authority granted herein
was not used by the county.
(n) On or before January 1, 2005, the Legislative Analyst shall
report to the Legislature on the use of the design -build method by
counties pursuant to this section, including the information listed
in subdivision (1). The report may include recommendations for
modifying or extending this section.
(o) This section shall remain in effect only until January 1,
2006, and as of that date is repealed, unless a later enacted
statute, that
that date.
SEC. 11.
to read:
20175.1.
is enacted before January 1, 2006, deletes or extends
Section 20175.1 of the Public Contract Code
is amended
(a) (1) This section provides for an alternative
and
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AB 222 Assembly Bill - INTRODUCED Page 14 of 22
use when it is anticipated that it will: reduce project
expedite project completion, or provide design features
achievable through the design -bid -build method.
(4) If th city c uncil locts to pr cood under this s ction, th
she uncil shall ctablish and of rce f r d sign -build pr j ctc a
ir
S cti n 1771.5 f th Lab r C d, r it chall c ntract with a third
optional procedure on bidding on building construction projects
applicable only to the City of Brentwood, the City of Hesperia, the
City of Vacaville, and the City of Woodland, upon approval of the
city council of the respective city.(2) For projects with costs of at
least five million dollars ($5,000,000), inclusive, the city may
award the project using either the lowest responsible bidder or by
best value.
(3) The design -build approach may be used, but is not limited to
cost,
not
rr �'tirr urwtr vtii ti.ct ^Li�Cncti n 1771 . 5 f the Lab r C d . Thic
..4.4s14.14,446milint shall n t apply
agr m nt r agr m ntc that bind all
w rl-+.he pr je^t'
(b) As used in this section:
(1) "Best value" means a value determined by objective criteria
and may include, but is not limited to, price, features, functions,
life -cycle costs, and other criteria deemed appropriate by the city.
f th
c ntract rs p rf rming
(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.
(c) 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 factors which the city reasonably expects to
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AB 222 Assembly Bill - INTRODUCED Page 15 of 22
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 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
Department of Industrial Relations. In preparing the questionnaire,
the director 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.
(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, as well as a
financial statement that assures the city that the design -build
entity has the capacity to complete the project.
(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.
(vii) Any instance where an entity, its owner, 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.
(viii) Any instance where the entity, its owner, officers, or
managing employees defaulted on a construction contract.
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AB 222 Assembly Bill - INTRODUCED Page 16 of 22
(ix) 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.
(x) Information concerning the bankruptcy or receivership of any
member of the design -build entity, including information concerning
any work completed by a surety.
(xi) 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.
(xii) 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, Division 7, 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) A city 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 and scored solely on
the basis of the factors and source selection procedures identified
in the request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight or
consideration given to all criterion factors: price, technical design
and construction expertise, life cycle costs over 15 years or more,
skilled labor force availability, as defined in clause (v), and an
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) (I) For the 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
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AB 222 Assembly Bill - INTRODUCED Page 17 of 22
Apprenticeship Council, which has graduated apprentices in each of
the preceding five years.
(II) The five-year graduation requirement in subclause (I) shall
not apply to any apprenticeship program that, on or after the date
this section is enacted, was in operation for less than the minimum
number of years required for completion of the curriculum for that
program. This exclusion from the five-year graduation requirement in
subclause (I) shall not apply to that apprenticeship program once it
has been in operation for the minimum number of years required for
completion of the curriculum for that program, if either of the
following occurs:
(aa) That program fails to graduate an apprentice during the year
in which that apprenticeship program has been in operation for the
minimum number of years required for the completion of the curriculum
for that program.
(bb) That program fails to graduate an apprentice any year
following the year in which that apprenticeship program has been in
operation for the minimum number of years required for the completion
of the curriculum for that program.
(vi) For the purposes of this paragraph, a bidder's "safety record"
shall be deemed "acceptable" if his or her experience modification
rate for the most recent three-year period is an average of 1.00 or
less, and his or her 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.
(vii) A city that limits the number of responsible bidders
participating in a design -build competition shall evaluate the bid
proposals in the manner set forth in clause (i).
(viii) For purposes of this section, in evaluating the "technical
design and construction expertise" of a responsible bidder
participating in a design -build competition, the evaluation shall be
limited to the bidder's experience and expertise within California.
The evaluation of the "technical design and construction expertise"
of a responsible bidder participating in a design -build competition
shall not include an evaluation of the bidder's experience in
utilizing a design -build procurement process.
(ix) A responsible bidder awarded a design -build contract that
uses a design -build procurement process in selecting subcontractors
shall utilize the following criterion factors in the selection of
subcontractors in a manner whereby each of those factors represents
at least 15 percent of the total weight or consideration given to all
criterion factors: price, technical design and construction
expertise, skilled labor force availability, as defined in clause
(v), and an acceptable safety record.
(d) (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
city.
(e) All subcontractors that were not listed by the design -build
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AB 222 Assembly Bill - INTRODUCED Page 18 of 22
entity in accordance with clause (i) of subparagraph (A) of paragraph
(3) of subdivision (c) 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.
(f) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (c) shall be
adhered to by the design -build entity. Any deviations from those
standards may only be allowed by written consent of the city.
(g) 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.
(h) Contracts awarded pursuant to this section shall be valid
until the project is completed.
(i) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.
(j) (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 that 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.
(k) 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, the Senate Committee on Local
Government, and the Assembly Committee on Local Government before
December 1, 2004, a report containing a description of each public
works project procured through the design -build process, and
completed on or before November 1, 2004. The report shall include,
but shall not be limited to, all of the following information:
(1) The type of facility.
(2) The gross square footage of the facility.
(3) The design -build entity that was awarded the project.
(4) 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.
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(8) An assessment of the impact 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 factors used to evaluate the bid shall
be described, 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 city
projects. This shall include projects where the city wanted to use
design -build methods and was precluded by the dollar limitation. It
shall also include projects where the best value method of awarding
contracts was not used, due to dollar limitations.
(13) An assessment of the most appropriate uses for the
design -build approach.
(1) Any city named in this section that elects not to use the
authority granted herein may also submit a report to the entities
named and in accordance with the schedule in subdivision (k). This
report may include an analysis of why the authority granted herein
was not used by the city.
(m) On or before January 1, 2005, the Legislative Analyst 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 (k). The report may include recommendations for modifying
or extending this section. It is the intent of the Legislature that
a moratorium be placed on the enactment of any additional legislation
relating to design -build contracting until any reports required by
existing law have been received by the Legislature.
(n) This section shall remain in effect only until January 1,
2006, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2006, deletes or extends
that date.
SEC. 12. Section 20209.7 of the Public Contract Code is amended
to read:
20209.7. Design -build projects shall progress in a three -step
process, as follows:(a) The transit operator 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, transit facilities, 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 transit
operator's needs. The performance specifications and any plans shall
be prepared by a design professional duly licensed or registered in
California.
(b) Any architectural or engineering firm or individual retained
by the transit operator to assist in the development criteria or
preparation of the request for proposal shall not be eligible to
participate in the competition with the design -build entity.
(c) mr^ tr ; e opor iso shad es�a�al sh a it en ergo a
S cti n 1771.5 f the Lab r C d r chall c ntract with a third pa#
utlin d in S cti n 1771.5 f th Lab r C d . Thic r quir m nt chall
n t apply t pr j ctc \•7h r th transit p rat r r th d sign -build
ate-;ty has nt .+^ iio;+; b 'a;ning agreement that binds
all f th c ntract rc p rf rming w rk n tho pr j ct.
— (1) Each RFP shall
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AB 222 Assembly Bill - INTRODUCED
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identify the basic scope and needs of the project or contract, the
expected cost range, and other information deemed necessary by the
contracting agency to inform interested parties of the contracting
opportunity.
(2) Each RFP shall invite interested parties to submit competitive
sealed proposals in the manner prescribed by the contracting agency.
(3) Each RFP shall include a section identifying and describing:
(A) All significant factors that the agency reasonably expects to
consider in evaluating proposals, including cost or price and all
nonprice related factors.
(B) The methodology and rating or weighting scheme that will be
used by the agency in evaluating competitive proposals and
specifically whether proposals will be rated according to numeric or
qualitative values.
(C) The relative importance or weight assigned to each of the
factors identified in the RFP. If a nonweighted system is used, the
agency shall specifically disclose whether all evaluation factors
other than cost or price, when combined, are any of the following:
(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.
(D) If the contracting agency wishes to reserve the right to hold
discussions or negotiations with offerors, it shall specify the same
in the RFP and shall publish separately or incorporate into the RFP
applicable rules and procedures to be observed by the agency to
ensure that any discussions or negotiations are conducted in a fair
and impartial manner.
(o) (d) (1) The transit operator
shall establish a procedure to prequalify design -build entities using
a standard questionnaire developed by the Director of Industrial
Relations. The standardized questionnaire may not require prospective
bidders to disclose any violations of Chapter 1 (commencing with
Section 1720) of Part 7 of Division 2 of the Labor Code committed
prior to January 1, 1998, if the violation was based on a
subcontractor's failure to comply with these provisions and the
bidder had no knowledge of the subcontractor's violations and the
bidder complied with the conditions set forth in subdivision (b) of
Section 1775 of the Labor Code. In preparing the questionnaire, the
director shall consult with the construction industry, transit
operators, and other affected parties. This questionnaire shall
require information including, but not limited to, all of the
following:
(A) A listing of all the contractors that are part of the
design -build entity.
(B) 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.
(C) The licenses, registrations, and credentials required to
design and construct the project, including information on the
revocation or suspension of any license, credential, or registration.
(D) 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, as well as a
financial statement that assures the transit operator that the
design -build entity has the capacity to complete the project.
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(E) 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 ( L.
Public Law 91-596), settled against any member
of the design -build entity, and information concerning a contractor
member's workers' compensation experience history and worker safety
program.
(F) 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 by an awarding body not to be a responsible bidder.
(G) Any instance where the entity, its owner, officers, or
managing employees defaulted on a construction contract.
(H) 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.
(I) Information concerning the bankruptcy or receivership of any
member of the entity, and information concerning all legal claims,
disputes, or lawsuits arising from any construction project of any
member of the entity during the past three years, including
information concerning any work completed by a surety.
(J) 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 who will participate as
subcontractors in the design -build contract.
(K) 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.
(L) 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-year period
immediately 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.
(M) 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 liable for full performance under the design -build
contract.
(2) 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.
(f) (e) The transit operator shall
establish a procedure for final selection of the design -build entity.
Selection shall be based on either of the two following procedures,
except that in no case may the transit operator award a contract to a
design -build entity pursuant to this article for a rail project
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AB 222 Assembly Bill - INTRODUCED
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SEC. 13.
to read:
20919.3. (a) —
unless that project exceeds fifty million dollars ($50,000,000) in
cost:
(1) For projects with costs from ten million dollars ($10,000,000)
to twenty million dollars ($20,000,000), inclusive, the contract
shall be awarded to the lowest responsible bidder.
(2) For projects costing over twenty million dollars
($20,000,000), the transit operator may award the projects using
either the lowest responsible bidder or by best value.
Section 20919.3 of the Public Contract Code is amended
cutlin d in that pr visi n. This r quir is nt d es n t apply t any
pr j ct wh r th unifi d sch 1 district r th j b rd r c ntract r
that bind all f the c ntract rs p rf rming z-; rk ^n th
pr j cts. (b)
The unified school district shall prepare an execution plan
for all modernization projects that may be eligible for job order
contracting pursuant to this article. The unified school district
shall select from that plan a sufficient number of projects to be
initiated as job order contracts during each calendar year and shall
determine for each selected project that job order contracting will
reduce the total cost of that project. Job order contracting shall
not be used if the unified school district finds that it will
increase the total cost of the project.
(b) No later than June 30, 2005, the unified
school district shall submit an interim report on all job order
contract projects completed by December 31, 2004, to the Office of
Public School Construction in the Department of General Services and
the Senate and the Assembly Committees on Business and Professions
and the Senate and Assembly Committees on Education. The interim
report shall be prepared by an independent third party and the
unified school district shall pay for the cost of the report. The
report shall include the information specified in subdivisions (a)
through (h) of Section 20919.12.
SEC. 14. This act shall not be construed or applied in a manner
that would impair the obligations of an existing contract in
violation of Section 9 of Article I of the California Constitution.
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