Bill Text: CA AB851 | 2017-2018 | Regular Session | Chaptered

---

Bill Title: Local agency contracts.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2017-10-15 - Chaptered by Secretary of State - Chapter 821, Statutes of 2017. [AB851 Detail]

Download: California-2017-AB851-Chaptered.html

---

Assembly Bill No. 851

CHAPTER 821

An act to amend Sections 20146 and 21162 of, and to add Section 22162.5 to, and to add and repeal Section 20175 of, the Public Contract Code, relating to public contracts.

[ Approved by Governor  October 15, 2017. Filed with Secretary of State  October 15, 2017. ]

LEGISLATIVE COUNSEL'S DIGEST

AB 851, Caballero. Local agency contracts.

(1) Existing law authorizes a county, until January 1, 2018, with approval of the board of supervisors, to utilize construction manager at-risk construction contracts for the erection, construction, alteration, repair, or improvement of any building owned or leased by the county, subject to certain requirements, including that the method may only be used for projects that are in excess of $1,000,000.

This bill would extend that authorization described above until January 1, 2023. The bill, with certain exceptions, would prohibit a construction manager at-risk entity from being prequalified or shortlisted or awarded a contract unless that entity provides an enforceable commitment to the county 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, in accordance with existing skilled and trained workforce requirements.

The bill would also similarly authorize the City of San Diego, until January 1, 2023, with the approval of the city council, to utilize construction manager at-risk construction contracts for the erection, construction, alteration, repair, or improvement of any building owned or leased by the city. The bill would authorize the city to use that method for a project that is in excess of $25,000,000, as specified. The bill would authorize the city to utilize the construction manger at-risk construction contracts through a single or series of contracts with the construction manager at-risk entity for services during the design and construction phases of the project, insofar as that contracting method is allowable by the city.

(2) Existing law authorizes a local agency, until January 1, 2025, to use the design-build procurement process when contracting for specified public works. Existing law requires specified information submitted by a design-build entity, as defined, in the design-build procurement process to be certified under penalty of perjury.

This bill would authorize the Santa Clara Valley Water District to use the design-build procurement process described above when contracting for the construction of a building or buildings and improvements directly related to the construction of a building or buildings. The bill would also authorize the district, upon approval by its governing body, to use the design-build procurement process for other specified projects. By expanding the design-build authorization to additional development projects, the bill would expand the scope of the crime of perjury and would impose a state-mandated local program.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Santa Clara Valley Water District and the City of San Diego.

(3) 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.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

---

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 20146 of the Public Contract Code is amended to read:

20146.

 (a) A county, with approval of the board of supervisors, may utilize construction manager at-risk construction contracts for the erection, construction, alteration, repair, or improvement of any building owned or leased by the county. A construction manager at-risk construction contract may be used only for projects in the county in excess of one million dollars ($1,000,000) and may be awarded using either the lowest responsible bidder or best value method to a construction manager at-risk entity that possesses or that obtains sufficient bonding to cover the contract amount for construction services and risk and liability insurance as may be required by the county. Any payment or performance bond written for the purposes of this section shall be written using a bond form developed by the county.

(b) For purposes of this section, the following definitions apply:

(1) “Best value” means a value determined by objective criteria related to the experience of the entity and project personnel, project plan, financial strength of the entity, safety record of the entity, and price.

(2) “Construction manager at-risk contract” means a competitively procured contract by a county with an individual, partnership, joint venture, corporation, or other recognized legal entity, that is appropriately licensed in this state, including a contractor’s license issued by the Contractors’ State License Board, and that guarantees the cost of a project and furnishes construction management services, including, but not limited to, preparation and coordination of bid packages, scheduling, cost control, value engineering, evaluation, preconstruction services, and construction administration.

(c) (1) A construction manager at-risk entity shall not be prequalified or shortlisted or awarded a contract unless the entity provides an enforceable commitment to the county 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, in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1.

(2) This subdivision shall not apply if any of the following conditions are met:

(A) The county has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract to use a skilled and trained workforce, and the entity agrees to be bound by that project labor agreement.

(B) The project or contract is being performed under the extension or renewal of a project labor agreement that was entered into by the county before January 1, 2018.

(C) The entity has entered into a project labor agreement that will bind the entity and all its subcontractors at every tier performing the project or contract to use a skilled and trained workforce.

(3) For purposes of this subdivision, “project labor agreement” has the same meaning as in paragraph (1) of subdivision (b) of Section 2500.

(d) Subcontractors that were not listed by a construction manager at-risk entity as partners, general partners, or association members in a partnership, limited partnership, or association in the entity’s construction manager at-risk bid submission shall be awarded by the construction manager at-risk entity in accordance with the process set forth by the county. 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 construction manager at-risk 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.

(e) A county that elects to proceed under this section and uses a construction manager at-risk contract for a building project shall make a copy of the contract available for public inspection on its Internet Web site and notify the appropriate policy committees of the Legislature with instructions on finding and accessing the stored contract.

(f) (1) If the county elects to award a project pursuant to this section, retention proceeds withheld by the county from the construction manager at-risk 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 construction manager at-risk entity and any subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the county and the construction manager at-risk entity. If the construction manager at-risk entity provides written notice to any subcontractor that is not a member of the construction manager at-risk entity, before 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 construction manager at-risk entity, then the construction manager at-risk entity may withhold retention proceeds in excess of the percentage specified in the contract between the county and the construction manager at-risk entity from any payment made by the construction manager at-risk entity to the subcontractor.

(g) If the county elects to award a project pursuant to this section, the contract between the county and construction manager at-risk entity shall be subject to subdivision (b) of Section 2782 of the Civil Code. Any contract between the construction manager at-risk entity and a contractor or subcontractor shall be subject to Section 2782.05 of the Civil Code.

(h) This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.

SEC. 2.

 Section 20175 is added to the Public Contract Code, to read:

20175.

 (a) Notwithstanding any other law, the City of San Diego, with approval of the city council, may utilize construction manager at-risk construction contracts for the erection, construction, alteration, repair, or improvement of any building owned or leased by the city. A construction manager at-risk construction contract may be used only for projects in the city in excess of twenty five million dollars ($25,000,000) and may be awarded using either the lowest responsible bidder or best value method to a construction manager at-risk entity that possesses or that obtains sufficient bonding to cover the contract amount for construction services and risk and liability insurance as may be required by the city. Any payment or performance bond written for the purposes of this section shall be written using a bond form developed by the city.

(b) For purposes of this section, the following definitions apply:

(1) “Best value” means a value determined by objective criteria related to the experience of the entity and project personnel, project plan, financial strength of the entity, safety record of the entity, and price.

(2) “Construction manager at-risk contract” means one or a successive combination of competitively procured contracts entered into by the City of San Diego with an individual, partnership, joint venture, corporation, or other recognized legal entity, that is appropriately licensed in this state, including holding a contractor’s license issued by the Contractors’ State License Board, and that guarantees the cost of a project and furnishes construction management services, including, but not limited to, preparation and coordination of bid packages, scheduling, cost control, value engineering, evaluation, preconstruction services, and construction administration.

(c) (1) A construction manager at-risk entity shall not be prequalified or shortlisted or awarded a contract unless the entity provides an enforceable commitment to the City of San Diego 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, in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1.

(2) This subdivision shall not apply if any of the following conditions are met:

(A) The City of San Diego has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract to use a skilled and trained workforce, and the entity agrees to be bound by that project labor agreement.

(B) The project or contract is being performed under the extension or renewal of a project labor agreement that was entered into by the City of San Diego before January 1, 2018.

(C) The entity has entered into a project labor agreement that will bind the entity and all its subcontractors at every tier performing the project or contract to use a skilled and trained workforce.

(3) For purposes of this subdivision, “project labor agreement” has the same meaning as in paragraph (1) of subdivision (b) of Section 2500.

(d) Subcontractors that were not listed by a construction manager at-risk entity as partners, general partners, or association members in a partnership, limited partnership, or association in the entity’s construction manager at-risk bid submission shall be awarded by the construction manager at-risk entity in accordance with the process set forth by the City of San Diego. 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 construction manager at-risk 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 of San Diego.

(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.

(e) If the City of San Diego elects to proceed under this section and uses a construction manager at-risk contract for a building project, it shall make a copy of the contract available for public inspection on its Internet Web site and notify the appropriate policy committees of the Legislature with instructions on finding and accessing the stored contract.

(f) (1) If the City of San Diego elects to award a project pursuant to this section, retention proceeds withheld by the city from the construction manager at-risk 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 construction manager at-risk entity and any subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the City of San Diego and the construction manager at-risk entity. If the construction manager at-risk entity provides written notice to any subcontractor that is not a member of the construction manager at-risk entity, before 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 construction manager at-risk entity, then the construction manager at-risk entity may withhold retention proceeds in excess of the percentage specified in the contract between the city and the construction manager at-risk entity from any payment made by the construction manager at-risk entity to the subcontractor.

(g) Notwithstanding any other law, if the City of San Diego elects to award a project pursuant to this section, the contract between the city and construction manager at-risk entity shall be subject to the provisions of subdivision (b) of Section 2782 of the Civil Code. Any contract between the construction manager at-risk entity and a contractor or subcontractor shall be subject to Section 2782.05 of the Civil Code.

(h) The City of San Diego may award separate contracts to the construction manager at-risk entity for preconstruction services and construction services, or award a single contract for preconstruction services and construction services with an intervening city approval of the guaranteed maximum price.

(i) This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.

SEC. 3.

 Section 21162 of the Public Contract Code is amended to read:

21162.

 Notwithstanding any other law, upon the approval of the board of directors, and without the approval of the board of supervisors, the district may use, for contracts for the construction of a building or buildings and improvements directly related to the construction of a building or buildings, the procedures described in Chapter 4 (commencing with Section 22160) as that chapter reads on January 1, 2018, or as it may be amended after that date.

SEC. 4.

 Section 22162.5 is added to the Public Contract Code, to read:

22162.5.

 Upon approval by its governing body, the Santa Clara Valley Water District may use the design-build contracting process described in this chapter to award a contract for the following projects:

(a) Flood protection improvements.

(b) Habitat restorations or enhancements.

(c) Groundwater recharge or storage facilities.

(d) Water treatment facilities.

(e) The retrofit, repair, or expansion of existing surface water storage facilities.

SEC. 5.

 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique conditions in the Santa Clara Valley Water District it is necessary to grant them authority to utilize the design-build procurement process described in this act.

SEC. 6.

 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique conditions in the City of San Diego that make it necessary to grant the city the authority to utilize the contracting methods described in this act.

SEC. 7.

 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.