California Assembly Bill AB1724 Amended / Bill

 BILL NUMBER: AB 1724AMENDED BILL TEXT AMENDED IN SENATE JUNE 10, 2014 AMENDED IN ASSEMBLY MARCH 28, 2014 INTRODUCED BY Assembly Member Frazier FEBRUARY 14, 2014 An act to add Chapter 6.7 (commencing with Section 6970) to Part 1 of Division 2 of the Public Contract Code, relating to public contracts, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 1724, as amended, Frazier. Construction Manager/General Contractor method: regional transportation agencies. Existing law generally sets forth the requirements for the solicitation and evaluation of bids and the awarding of contracts by local agencies for public works contracts. Existing law authorizes the Department of Transportation, the Santa Clara County Valley Transportation Authority, and the San Mateo County Transit District to use the Construction Manager/General Contractor project delivery method for transit projects within their respective jurisdictions, subject to certain conditions and requirements. This bill would authorize regional transportation agencies, as defined, to use the Construction Manager/General Contractor project delivery method, as specified, to design and construct certain projects.  The bill would require a regional transportation agency, within 180 days after the completion of any project using the Construction Manager/General Contractor project delivery method, to prepare a report that describes each project and provides relevant data, as specified. The bill would also require that report to be posted on the regional transportation agency's Internet Web site, and would require the agency to notify the Chair of the Assembly Committee on Transportation and the Chair of the Senate Committee on Transportation and Housing that the report is available online.   The bill would require specified information provided to a regional transportation agency to be verified under oath. By expanding the scope of an existing crime, the bill would impose a state-mandated local program.   The   This  bill would further require a regional transportation agency using the Construction Manager/General Contractor project delivery method to comply with certain prevailing wage provisions and to reimburse the Department of Industrial Relations for its reasonable and related enforcement costs, as specified. By requiring these reimbursements to be deposited into the State Public Works Enforcement Fund, a continuously appropriated fund, the bill would make an appropriation.  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: yes. Fiscal committee: yes. State-mandated local program:  no   yes  . THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Chapter 6.7 (commencing with Section 6970) is added to Part 1 of Division 2 of the Public Contract Code, to read: CHAPTER 6.7. CONSTRUCTION MANAGER/GENERAL CONTRACTOR METHOD: REGIONAL TRANSPORTATION AGENCIES 6970. For purposes of this chapter, the following definitions apply:  (a) "Best value" means a value determined by objective criteria, including, but not limited to, price, features, functions, life-cycle costs, and other criteria deemed appropriate by the regional transportation agency.   (a)   (b)  "Construction manager" means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting and engineering services as needed pursuant to a Construction Manager/General Contractor method contract.  (b)   (c)  "Construction Manager/General Contractor method" means a project delivery method in which a construction manager is procured to provide preconstruction services during the design phase of the project and construction services during the construction phase of the project. The contract for construction services may be entered into at the same time as the contract for preconstruction services, or at a later time. The execution of the design and the construction of the project may be in sequential phases or concurrent phases.  (c) "Department" means the Department of Transportation as established under Part 5 (commencing with Section 14000) of Division 3 of the Government Code.  (d) "Preconstruction services" means advice during the design  phase   phase,  including, but not limited to, scheduling, pricing, and phasing to assist the regional transportation agency to design a more constructible project. (e) "Project" means the construction of a highway, bridge, expressway, or tunnel. (f) "Regional transportation agency" means any of the following: (1) A transportation planning agency described in Section 29532 or 29532.1 of the Government Code. (2) A county transportation commission established under Section 130050, 130050.1, or 130050.2 of the Public Utilities Code. (3) Any other local or regional transportation entity that is designated by statute as a regional transportation agency. (4) A local transportation authority designated pursuant to Division 12.5 (commencing with Section 131000) or Division 19 (commencing with Section 180000) of the Public Utilities Code. (5) The Santa Clara Valley Transportation Authority established pursuant to Part 12 (commencing with Section 100000) of Division 10 of the Public Utilities Code. 6974. (a) The Construction Manager/General Contractor method may be used by a regional transportation agency pursuant to this chapter if, after evaluation of the traditional design-bid-build process of construction and of the Construction Manager/General Contractor method in a public meeting, the regional transportation agency makes a written finding that use of the Construction Manager/General Contractor method on the specific project  under consideration  will accomplish one or more of the following objectives: reduce project costs, expedite the project's completion, or provide features not achievable through the design-bid-build method. This finding shall be made prior to the regional transportation agency entering into a Construction Manager/General Contractor method contract. (b) Except as specified in subdivision (c), the regional transportation agency shall comply with subdivision (f) of Section 1771.5 of the Labor Code, and shall reimburse the Department of Industrial Relations for its reasonable and directly related costs of performing prevailing wage monitoring and enforcement on public works projects pursuant to rates established by the department as set forth in subdivision (h) of Section 1771.5 of the Labor Code on projects using the Construction Manager/General Contractor method under this chapter. All moneys collected pursuant to this subdivision shall be deposited in the State Public Works Enforcement Fund, created by Section 1771.3 of the Labor Code, and shall be used only for enforcement of prevailing wage requirements on those projects. (c) In lieu of complying with subdivision  (a),   (b),  the regional transportation agency may elect to enter into a collective bargaining agreement that binds all of the contractors performing work on the project and that includes a mechanism for resolving disputes about the payment of wages.  (d) (1) Within 180 days after the completion of a project using the Construction Manager/General Contractor method, the regional transportation agency shall prepare a report including all of the following:   (A) Data on initial cost estimates, actual cost upon completion, and the reasons for any difference.   (B) Estimated time for completion, actual time of completion, and the reasons for any difference.   (C) The number and dollar value of any change orders for all projects completed using the Construction Manager/General Contractor method.   (2) A report required by this subdivision shall be posted on the regional transportation agency's Internet Web site. The regional transportation agency shall notify the Chair of the Assembly Committee on Transportation and the Chair of the Senate Committee on Transportation and Housing that the report is available online.  6976. A Construction Manager/General Contractor method project shall progress as follows:  (a) A regional transportation agency that intends to use the Construction Manager/General Contractor method shall adopt a procedure for the evaluation and selection of a construction manager in a public meeting. The procedure shall include a two-phased request for qualifications (RFQ). Under Phase 1 of the RFQ, the Construction Manager (CM) is identified using a qualifications-based selection process. In Phase 2 of the RFQ, the CM transitions to the General Contractor (GC) who completes the work under either a fixed price or guaranteed maximum price.   (b) The procedures adopted by the regional transportation agency shall include, at a minimum, all of the following:   (1) The criteria for membership in its selection panel.   (2) The evaluation criteria and relative weighting of the evaluation criteria for scoring and ranking the construction manager qualifications.   (3) If the regional transportation agency intends to establish a preliminary list of the highest qualified firms who will be subsequently interviewed prior to ranking the final list, the evaluation criteria and relative weighting of the evaluation criteria for scoring and ranking the construction manager interviews and the method used to rank the final list using a combination of RFQ and interview criteria.   (4) The minimum number, if any, of proposers who must respond to the regional transportation agencies RFQ for the agency to use the Construction Manager/General Contractor method.   (5) The maximum number, if any, of construction manager firms who will be deemed qualified to continue to the interview phase, if used, or to the negotiations.   (6) The process by which it will use an independent cost estimator (ICE) as part of its negotiation for fixed price or guaranteed maximum price construction services contract.   (7) Any specific subcontracting requirements deemed necessary by the regional transportation agency in addition to that required by existing statutes.   (a) (1) A regional transportation agency shall establish a procedure for the evaluation and selection of a construction manager through a request for qualifications (RFQ). The RFQ shall include, but not be limited to, the following:   (A) If the entity is a partnership, limited partnership, or other association, a list of all of the partners, general partners, or association members known at the time of the bid submission who will participate in the Construction Manager/General Contractor method contract, including, but not limited to, subcontractors.   (B) Evidence that the members of the 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 construction of the project, as well as a financial statement that assures the regional transportation agency that the entity has the capacity to complete the project, construction expertise, and an acceptable safety record.   (C) The licenses, registration, and credentials required to construct the project, including information on the revocation or suspension of any license, registration, or credential.   (D) Evidence that establishes that the entity has the capacity to obtain all required payment and performance bonding, liability insurance, and errors and omissions insurance.   (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 (Public Law 91-596), settled against any member of the entity, and information concerning 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 in which an entity, its owners, officers, or managing employees submitted a bid on a public works project and were found to be nonresponsive, or were found by an awarding body not to be a responsible bidder.   (G) Any instance in which the entity, or its owners, 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 the Federal Insurance Contributions Act (26 U.S.C. Sec. 3101 et seq.) withholding requirements settled against any member of the entity.   (I) Information concerning the bankruptcy or receivership of any member of the entity, including information concerning any work completed by a surety.   (J) Information concerning all settled adverse claims, disputes, or lawsuits between the owner of a public works project and any member of the 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.   (K) 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 contract.   (L) For the purposes of this paragraph, a construction manager'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 he or she is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.   (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.   (b) For each RFQ, the regional transportation agency shall generate a final list of qualified persons or firms that participated in the RFQ prior to entering into negotiations on the contract or contracts to which the RFQ applies.  (c) (1) For each RFQ, the regional transportation agency shall establish a selection panel to evaluate and rank proposals. A person who is a member of the selection panel shall not be a contractor under the contract or provide construction services, materials, or other services under the contract. The regional transportation agency shall generate a final list of qualified persons or firms that participated in the RFQ prior to entering into negotiations on the contract or contracts to which the RFQ applies. (2) The regional transportation agency and its selection panel shall not request or consider fees, price, man-hours, or any other cost information in its evaluation and ranking of proposals and establishment of the final list for that contract. (d) (1) For each RFQ, the regional transportation agency shall enter into separate negotiations for the contract with the highest qualified person or firm on the final list for that contract. However, if the RFQ is for multiple contracts and specifies that all of the multiple contracts will be awarded to a single construction manager, there may be a single negotiation for all of the multiple contracts. The negotiations shall include consideration of compensation and other contract terms that the regional transportation agency determines to be fair and reasonable to the regional transportation agency. In making this decision, the regional transportation agency shall take into account the estimated value, the scope, the complexity, and the nature of the professional services or construction services to be rendered. If the regional transportation agency is not able to negotiate a satisfactory contract with the highest qualified person or firm on the final list, regarding compensation and on other contract terms the regional transportation agency determines to be fair and reasonable, the regional transportation agency shall formally terminate negotiations with that person or firm. The regional transportation agency may undertake negotiations with the next most qualified person or firm on the final list in sequence until an agreement is reached or a determination is made to reject all persons or firms on the final list. (2) If a contract for construction services is entered into pursuant to this chapter and includes preconstruction services by the construction manager, the regional transportation agency shall enter into a written contract with the construction manager for preconstruction services under which contract the regional transportation agency shall pay the construction manager a fee for preconstruction services in an amount agreed upon by the regional transportation agency and the construction manager. The preconstruction services contract may include fees for services to be performed during the contract period provided, however, the regional transportation agency shall not request or obtain a fixed price or a guaranteed maximum price for the construction contract from the construction manager or enter into a construction contract with the construction manager until after the regional transportation agency has entered into a services contract. A preconstruction services contract shall provide for the subsequent negotiation for construction of all or any discreet phase or phases of the project. (3) A contract for construction services shall be awarded after the plans have been sufficiently developed and either a fixed price or a guaranteed maximum price has been successfully negotiated. In the event that a fixed price or a guaranteed maximum price is not negotiated, the regional transportation agency shall not award the contract for construction services. (4) The regional transportation agency is not required to award the construction services contract. (5) Construction shall not commence on any phase, package, or element until the regional transportation agency and construction manager agree in writing on either a fixed price that the regional transportation agency will pay for the construction to be commenced or a guaranteed maximum price for the construction to be commenced and construction schedule for the project. The construction manager shall perform not less than 30 percent of the work covered by the fixed price or guaranteed maximum price agreement reached. Work that is not performed directly by the construction manager shall be bid to subcontractors pursuant to Section 6705. (e) In the event the regional transportation agency and the construction manager cannot successfully negotiate a fixed price or guaranteed maximum price contract, the regional transportation agency shall be able to, at its sole discretion, publicly advertise and award the construction contract using  the plans and specifications developed with the preconstruction services provided by construction manager input   a lowest responsible bidder or best value method  . The construction manager shall not be excluded from submitting a bid on this type of contract. 6978. All subcontractors bidding on contracts pursuant to this chapter shall be afforded the protections contained in Chapter 4 (commencing with Section 4100).  The construction manager shall do all of the following:   (a) 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 regional transportation agency.   (b) Provide a fixed date and time on which the subcontracted work will be awarded in accordance with the procedure established pursuant to this chapter.   (c) Comply with any subcontracting procedures adopted by the regional transportation agency that were included in the regional transportation agency's RFQ. If the regional transportation agency has adopted procedures to prequalify public works contractors, the construction manager may use the procedures to prequalify subcontractors.  6980. Contracts awarded pursuant to this chapter shall be valid until the project is completed. 6982. Nothing in this chapter is intended to affect, expand, alter, or limit any rights or remedies otherwise available at law.  SEC. 2.   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.