BILL NUMBER: AB 1358 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 9, 2015
INTRODUCED BY Assembly Member Dababneh
FEBRUARY 27, 2015
An act to repeal, add, and repeal add
Section 17250.55 to, and to amend, repeal, and add
Chapter 2.5 (commencing with Section 17250.10) of Part 10.5 of
Division 1 of Title 1 of of, the
Education Code, and to repeal Section 4 of Chapter 421 of the
Statutes of 2001, relating to school facilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 1358, as amended, Dababneh. School facilities: design-build
contracts.
Existing law authorizes the governing board of a school district,
until January 1, 2020, and upon a determination by the
governing board of the school district that it is in the best
interest of the school district, to enter into a design-build
contract for both the design and construction of a school facility if
that expenditure exceeds $2,500,000, as provided.
This bill would repeal make those
provisions and inoperative on July 1, 2016,
and as of that date would instead authorize, until January 1,
2025, a school district, with the approval of the governing board of
the school district, to procure design-build contracts for public
works projects in excess of $1,000,000, awarding the contract to
either the low bid or the best value, as provided. The bill would
require specified information to be verified under penalty of
perjury. By expanding the crime of perjury, the bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 2.5 (commencing with Section
17250.10) of Part 10.5 of Division 1 of Title 1 of the Education
Code is repealed.
SECTION 1. Section 17250.55 is added to the
Education Code , to read:
17250.55. This chapter shall become inoperative on July 1, 2016,
and, as of January 1, 2017, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2017, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 2. Chapter 2.5 (commencing with Section 17250.10) is added to
Part 10.5 of Division 1 of Title 1 of the Education Code, to read:
CHAPTER 2.5. DESIGN-BUILD CONTRACTS
17250.10. (a) The Legislature finds and declares that the
design-build method of project delivery, using a best value
procurement methodology, has been authorized for various agencies
that have reported benefits from those projects, including reduced
project costs, expedited project completion, and design features that
are not achievable through the traditional design-bid-build method.
(b) It is the intent of the Legislature that:
(1) This chapter provide general authorization for school
districts to use the design-build method for projects.
(2) This chapter shall not be deemed to express a preference for
the design-build method over other procurement methodologies.
17250.15. For purposes of this chapter, the following definitions
apply:
(a) (1) "Best value" means a value determined by evaluation of
objective criteria that may include, but are not limited to, price,
features, functions, life-cycle costs, experience, and past
performance.
(2) A best value determination may involve the selection of the
lowest cost proposal meeting the interests of the school district and
the objectives of the project, selection of the best proposal for a
stipulated sum established by the procuring school district, or a
tradeoff between price and other factors.
(b) "Construction subcontract" means a subcontract awarded by the
design-build entity to a subcontractor that will perform work or
labor or will render service to the design-build entity in or about
the construction of the work or improvement, or a subcontractor
licensed by the state which, under subcontract to the design-build
entity, specially fabricates and installs a portion of the work or
improvement according to detailed drawings contained in the plans and
specifications produced by the design-build team.
(c) "Design-build" means a project delivery process in which both
the design and construction of a project are procured from a single
entity.
(d) "Design-build entity" means a corporation, limited liability
company, partnership, joint venture, or other legal entity that is
able to provide appropriately licensed contracting, architectural,
and engineering services, as needed, pursuant to a design-build
contract.
(e) (1) "Design-build team" means the design-build entity and the
individuals or other entities identified by the design-build entity
as members of its team.
(2) Members shall include the general contractor and, if utilized
in the design of the project, all electrical, mechanical, and
plumbing contractors.
(f) "Project" means the construction of any school facility.
17250.20. (a) A school district, with approval of its governing
board, may procure design-build contracts for projects in excess of
one million dollars ($1,000,000), awarding the contract to either the
low bid or the best value.
(b) The school district shall develop guidelines for a standard
organizational conflict-of-interest policy, consistent with
applicable law, regarding the ability of a person or entity that
performs services for the school district relating to the
solicitation of a design-build project, to submit a proposal as a
design-build entity, or to join a design-build team. This
conflict-of-interest policy shall apply to each school district
entering into design-build contracts authorized under this chapter.
(c) This chapter shall apply to bid requests issued on or after
July 1, 2016.
17250.25. The procurement process for design-build projects shall
progress as follows:
(a) (1) The school district shall prepare a set of documents
setting forth the scope and estimated price of the project. The
documents may include, but are not limited to, the size, type, and
desired design character of the project, performance specifications
covering the quality of materials, equipment, workmanship,
preliminary plans or building layouts, or any other information
deemed necessary to describe adequately the school district's needs.
The performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.
(2) The documents shall not include a design-build-operate
contract for a project. The documents, however, may include
operations during a training or transition period, but shall not
include long-term operations for a project.
(b) The school district shall prepare and issue a request for
qualifications in order to prequalify, or develop a short-list of,
the design-build entities whose proposals shall be evaluated for
final selection. The request for qualifications shall include, but is
not limited to, all of the following elements:
(1) Identification of the basic scope and needs of the project or
contract, the expected cost range, the methodology that will be used
by the school district to evaluate proposals, the procedure for final
selection of the design-build entity, and any other information
deemed necessary by the school district to inform interested parties
of the contracting opportunity.
(2) Significant factors that the school district reasonably
expects to consider in evaluating qualifications, including technical
design and construction expertise, acceptable safety record, and all
other nonprice-related factors.
(3) A standard template request for statements of qualifications
prepared by the school district. In preparing the standard template,
the school district may consult with the construction industry, the
building trades and surety industry, and other school districts
interested in using the authorization provided by this chapter. The
template shall require the following information:
(A) If the design-build entity is a privately held corporation,
limited liability company, partnership, or joint venture, a listing
of all of the shareholders, partners, or members known at the time of
statement of qualification submission who will perform work on the
project.
(B) Evidence that the members of the design-build team have
completed, or demonstrated the experience, competency, capability,
and capacity to complete, projects of similar size, scope, or
complexity, and that the proposed key personnel have sufficient
experience and training to competently manage and complete the design
and construction of the project, and a financial statement that
ensures that the design-build entity has the capacity to complete the
project.
(C) The licenses, registration, and credentials required to design
and construct the project, including, but not limited to,
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.
(E) Information concerning workers' compensation experience
history and a worker safety program.
(F) If the proposed design-build entity is a corporation, limited
liability company, partnership, joint venture, or other legal entity,
a copy of the organizational documents or agreement committing to
form the organization.
(G) An acceptable safety record. A proposer'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 or 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
proposer is a party to an alternative dispute resolution system, as
provided for in Section 3201.5 of the Labor Code.
(4) (A) The information required under this subdivision shall be
certified under penalty of perjury by the design-build entity and its
general partners or joint venture members.
(B) Information required under this subdivision that is not
otherwise a public record under 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.
(c) A design-build entity shall not be prequalified or shortlisted
unless the entity provides an enforceable commitment to the school
district that the entity and its subcontractors at every tier will
use a skilled and trained workforce to perform all work on the
project or contract that falls within an apprenticeable occupation in
the building and construction trades.
(1) For purposes of this subdivision:
(A) "Apprenticeable occupation" means an occupation for which the
Chief of the Division of Apprenticeship Standards had approved an
apprenticeship program pursuant to Section 3075 of the Labor Code
before January 1, 2014.
(B) "Skilled and trained workforce" means a workforce that meets
all of the following conditions:
(i) All the workers are either skilled journeypersons or
apprentices registered in an apprenticeship program approved by the
Chief of the Division of Apprenticeship Standards.
(ii) (I) As of January July 1, 2016,
at least 20 percent of the skilled journeypersons employed to
perform work on the contract or project by the entity and each of its
subcontractors at every tier are graduates of an apprenticeship
program for the applicable occupation that was either approved by the
Chief of the Division of Apprenticeship Standards pursuant to
Section 3075 of the Labor Code or located outside California and
approved for federal purposes pursuant to the apprenticeship
regulations adopted by the federal Secretary of Labor.
(II) As of January July 1, 2017, at
least 30 percent of the skilled journeypersons employed to perform
work on the contract or project by the entity and each of its
subcontractors at every tier are graduates of an apprenticeship
program for the applicable occupation that was either approved by the
Chief of the Division of Apprenticeship Standards pursuant to
Section 3075 of the Labor Code or located outside California and
approved for federal purposes pursuant to the apprenticeship
regulations adopted by the federal Secretary of Labor.
(III) As of January July 1, 2018, at
least 40 percent of the skilled journeypersons employed to perform
work on the contract or project by the entity and each of its
subcontractors at every tier are graduates of an apprenticeship
program for the applicable occupation that was either approved by the
Chief of the Division of Apprenticeship Standards pursuant to
Section 3075 of the Labor Code or located outside California and
approved for federal purposes pursuant to the apprenticeship
regulations adopted by the federal Secretary of Labor.
(IV) As of January July 1, 2019, at
least 50 percent of the skilled journeypersons employed to perform
work on the contract or project by the entity and each of its
subcontractors at every tier are graduates of an apprenticeship
program for the applicable occupation that was either approved by the
Chief of the Division of Apprenticeship Standards pursuant to
Section 3075 of the Labor Code or located outside California and
approved for federal purposes pursuant to the apprenticeship
regulations adopted by the federal Secretary of Labor.
(V) As of January July 1, 2020, at
least 60 percent of the skilled journeypersons employed to perform
work on the contract or project by the entity and each of its
subcontractors at every tier are graduates of an apprenticeship
program for the applicable occupation that was either approved by the
Chief of the Division of Apprenticeship Standards pursuant to
Section 3075 of the Labor Code or located outside California and
approved for federal purposes pursuant to the apprenticeship
regulations adopted by the federal Secretary of Labor.
(iii) For an apprenticeable occupation in which no apprenticeship
program had been approved by the Chief of the Division of
Apprenticeship Standards before January 1, 1995, up to one-half of
the graduation percentage requirements of clause (ii) may be
satisfied by skilled journeypersons who commenced working in the
apprenticeable occupation prior to the chief's approval of an
apprenticeship program for that occupation in the county in which the
project is located.
(C) "Skilled journeyperson" means a worker who either:
(i) Graduated from an apprenticeship program for the applicable
occupation that was approved by the Chief of the Division of
Apprenticeship Standards or located outside California and approved
for federal purposes pursuant to the apprenticeship regulations
adopted by the federal Secretary of Labor.
(ii) Has at least as many hours of on-the-job experience in the
applicable occupation as would be required to graduate from an
apprenticeship program for the applicable occupation that is approved
by the chief.
(2) An entity's commitment that a skilled and trained workforce
will be used to perform the project or contract may be established by
any of the following:
(A) The entity's agreement with the school district that the
entity and its subcontractors at every tier will comply with the
requirements of this subdivision and that the entity will provide the
school district with evidence, on a monthly basis while the project
or contract is being performed, that the entity and its
subcontractors are complying with the requirements of this
subdivision.
(B) If the school district has entered into a project labor
agreement that will bind all contractors and subcontractors
performing work on the project or contract and that includes the
requirements of this subdivision, the entity's agreement that it will
become a party to that project labor agreement.
(C) Evidence that the entity has entered into a project labor
agreement that includes the requirements of this subdivision and that
will bind the entity and all its subcontractors at every tier
performing the project or contract.
(d) Based on the documents prepared as described in subdivision
(a), the school district shall prepare a request for proposals that
invites prequalified or short-listed entities to submit competitive
sealed proposals in the manner prescribed by the school district. The
request for proposals shall include, but need not be limited to, the
following elements:
(1) Identification of the basic scope and needs of the project or
contract, the estimated cost of the project, the methodology that
will be used by the school district to evaluate proposals, whether
the contract will be awarded on the basis of low bid or best value,
and any other information deemed necessary by the school district to
inform interested parties of the contracting opportunity.
(2) Significant factors that the school district reasonably
expects to consider in evaluating proposals, including, but not
limited to, cost or price and all nonprice-related factors.
(3) The relative importance or the weight assigned to each of the
factors identified in the request for proposals.
(4) Where a best value selection method is used, the school
district may reserve the right to request proposal revisions and hold
discussions and negotiations with responsive proposers, in which
case the school district shall so specify in the request for
proposals and shall publish separately or incorporate into the
request for proposals applicable procedures to be observed by the
school district to ensure that any discussions or negotiations are
conducted in good faith.
(e) For those projects utilizing low bid as the final selection
method, the competitive bidding process shall result in lump-sum bids
by the prequalified or short-listed design-build entities, and
awards shall be made to the design-build entity that is the lowest
responsible bidder.
(f) For those projects utilizing best value as a selection method,
the design-build competition shall progress as follows:
(1) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposals. The following minimum factors, however, shall
be weighted as deemed appropriate by the school district:
(A) Price, unless a stipulated sum is specified.
(B) Technical design and construction expertise.
(C) Life-cycle costs over 15 or more years.
(2) Pursuant to subdivision (d), the school district may hold
discussions or negotiations with responsive proposers using the
process articulated in the school district's request for proposals.
(3) When the evaluation is complete, the responsive proposers
shall be ranked based on a determination of value provided, provided
that no more than three proposers are required to be ranked.
(4) The award of the contract shall be made to the responsible
design-build entity whose proposal is determined by the school
district to have offered the best value to the public.
(5) Notwithstanding any other provision of law, upon issuance of a
contract award, the school district shall publicly announce its
award, identifying the design-build entity to which the award is
made, along with a statement regarding the basis of the award.
(6) The statement regarding the school district's contract award,
described in paragraph (5), and the contract file shall provide
sufficient information to satisfy an external audit.
17250.30. (a) The design-build entity shall provide payment and
performance bonds for the project in the form and in the amount
required by the school district, and issued by a California admitted
surety. The amount of the payment bond shall not be less than the
amount of the performance bond.
(b) The design-build contract shall require errors and omissions
insurance coverage for the design elements of the project.
(c) The school district shall develop a standard form of payment
and performance bond for its design-build projects.
17250.35. The school district, in each design-build request for
proposals, may identify specific types of subcontractors that must be
included in the design-build entity statement of qualifications and
proposal. All construction subcontractors that are identified in the
proposal shall be afforded all the protections of Chapter 4
(commencing with Section 4100) of Part 1 of Division 2 of the Public
Contract Code.
(a) Following award of the design-build contract, the design-build
entity shall proceed as follows in awarding construction
subcontracts with a value exceeding one-half of 1 percent of the
contract price allocable to construction work:
(1) Provide public notice of availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the school district,
including a fixed date and time on which qualifications statements,
bids, or proposals will be due.
(2) Establish reasonable qualification criteria and standards.
(3) Award the subcontract either on a best value basis or to the
lowest responsible bidder. The process may include prequalification
or short-listing. The foregoing process does not apply to
construction subcontractors listed in the original proposal.
Subcontractors awarded construction subcontracts under this
subdivision shall be afforded all the protections of Chapter 4
(commencing with Section 4100) of Part 1 of Division 2 of the Public
Contract Code.
17250.40. (a) If the school district elects to award a project
pursuant to this chapter, retention proceeds withheld by the school
district from the design-build entity shall not exceed 5 percent.
(b) 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 agency 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 school district and the design-build entity from
any payment made by the design-build entity to the subcontractor.
17250.45. Nothing in this chapter affects, expands, alters, or
limits any rights or remedies otherwise available at law.
17250.50. This chapter shall become operative on July 1, 2016.
17250.50. 17250.55. This chapter
shall remain in effect only until January 1, 2025, and as of that
date is repealed, unless a later enacted statute, that takes effect
before January 1, 2025, deletes or extends that date.
SEC. 3. Section 4 of Chapter 421 of the Statutes
of 2001, as amended by Section 5 of Chapter 736 of the Statutes of
2012, is repealed.
Sec. 4. This act shall remain in effect only
until January 1, 2020, and as of that date is repealed, unless a
later enacted statute, that is enacted before January 1, 2020,
deletes or extends that date.
SEC. 3. SEC. 4. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.