California Senate Bill SB785 Amended / Bill

 BILL NUMBER: SB 785AMENDED BILL TEXT AMENDED IN SENATE APRIL 23, 2013 AMENDED IN SENATE APRIL 1, 2013 INTRODUCED BY Senator Wolk FEBRUARY 22, 2013 An act to repeal Sections 14661 and 14661.1 of the Government Code, to amend Section 32132.5 of the Health and Safety Code, and to add Article 6 (commencing with Section 10186) to Chapter 1 of Part 2 of Division 2 of, to add Chapter 4 (commencing with Section 22160) to Part 3 of Division 2 of, to repeal Sections 20133, 20175.2, 20193, 20209, 20301.5, and 20688.6 of, and to repeal Article 22 (commencing with Section 20360)of Chapter 1 of Part 3 of Division 2 of, the Public Contract Code, relating to design-build. LEGISLATIVE COUNSEL'S DIGEST SB 785, as amended, Wolk. Design-build. Existing law authorizes the Department of General Services, the Department of Corrections and Rehabilitation, and various local agencies to use the design-build procurement process for specified public works under different laws. This bill would repeal those authorizations, and enact provisions that would authorize the Department of General Services, the Department of Corrections and Rehabilitation, and those local agencies, as defined, to use the design-build procurement process for specified public works. The bill would require moneys that are collected under these provisions to be deposited into the State Public Works Enforcement Fund, subject to appropriation by the Legislature. 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. It is the intent of the Legislature to consolidate existing design-build statutes and eliminate inconsistencies in statutory language by adopting authority of general application to identified agencies and repealing superseded sections. SEC. 2. Section 14661 of the Government Code is repealed. SEC. 3. Section 14661.1 of the Government Code is repealed. SEC. 4. Section 32132.5 of the Health and Safety Code is amended to read: 32132.5. (a) Notwithstanding Section 32132 or any other  provision of  law, upon approval by the board of directors of the Sonoma Valley Health Care District, the design-build procedure described in Article 6 (commencing with Section 10186) of Chapter 1 of Part 2 of Division 2 of the Public Contract Code may be used to assign contracts for the construction of a building or improvements directly related to construction of a hospital or health facility building at the Sonoma Valley Hospital. (b) For purposes of this section, all references in Article 6 (commencing with Section 10186) of Chapter 1 of Part 2 of Division 2 of the Public Contract Code to "county" and "governing body" shall mean the Sonoma Valley Health Care District. (c) A hospital building project utilizing the design-build process authorized by subdivision (a) shall be reviewed and inspected in accordance with the standards and requirements of the Alfred E. Alquist Hospital Facilities Seismic Safety Act of 1983 (Chapter 1 (commencing with Section 129675) of Part 7 of Division 107). SEC. 5. Article 6 (commencing with Section 10186) is added to Chapter 1 of Part 2 of Division 2 of the Public Contract Code, to read: Article 6. State Agency Design-Build Projects 10186. (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 such 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 the following occur: (1) This article provides general authorization for certain state agencies to use design-build for projects, excluding projects on the state highway system. (2) This article shall not be deemed to provide a preference for the design-build method over other procurement methodologies. 10187. For purposes of this article, the following definitions apply: (a) "Best value" means a value determined by evaluation of  proposals with reference to specified criteria objectively applied, including, but not limited to, price, quality of technical proposals, qualifications of key personnel, and other criteria deemed appropriate by the director.   objective criteria related to price, features, functions, life cycle costs, experience, and past performance.  A best value determination may entail selection of the lowest priced technically acceptable proposals or selection of the best proposal for a fixed price established by the procuring agency, or it may consist of a tradeoff between price and other specified factors. (b) "Construction subcontract" means each subcontract awarded by the design-build entity to a subcontractor that will perform work or labor or render service to the design-build entity in or about the construction of the work or improvement, or a subcontractor licensed by the State of California that, 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) "Department" means the Department of General Services and the Department of Corrections and Rehabilitation. (d) "Design-build" means a project delivery process in which both the design and construction of a project are procured from a single entity. (e) "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. (f) "Design-build team" means the design-build entity itself and the individuals and other entities identified by the design-build entity as members of its team. Members shall include the general contractor and, if utilized in the design of the project, all electrical, mechanical, and plumbing contractors. (g) "Director" means, with respect to procurements undertaken by the Department of General Services, the Director of General Services or, with respect to procurements undertaken by the Department of Corrections and Rehabilitation, the secretary of that department. 10188. (a) Notwithstanding any other law, the director, following notification to the State Public Works Board, may procure design-build contracts for public works projects in excess of one million dollars ($1,000,000), awarding the contract using either the low bid or best value, provided that this article shall not apply to any projects on the state highway system. (b) The director 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 department 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 department entering into design-build contracts authorized under this article. 10189. (a) For contracts for public works projects awarded on or after the effective date of the regulations adopted by the Department of Industrial Relations pursuant to subdivision (g) of Section 1771.5 of the Labor Code, the department 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. 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, subject to appropriation by the Legislature, be used only for enforcement of prevailing wage requirements on those projects. (b) In lieu of reimbursing the Department of Industrial Relations for its reasonable and directly related costs of performing monitoring and enforcement on public works projects, the department may elect to continue operating an existing previously approved labor compliance program to monitor and enforce prevailing wage requirements on the project if it has either not contracted with a third party to conduct its labor compliance program and requests and receives approval from the department to continue its existing program or it enters 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. 10190. The director shall notify the State Public Works Board regarding the method to be used for selecting the design-build entity, prior to advertising the design-build project. 10191. The procurement process for the design-build projects shall progress as follows: (a) (1) The director shall prepare a set of documents setting forth the scope and estimated price of the project. The documents may include, but need not be 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 department'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 any project. (b) Based on the documents prepared under subdivision (a), the director shall prepare and issue a request for qualifications in order to prequalify or short-list the design-build entities whose proposals shall be evaluated for final selection. The request for qualifications 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 expected cost range, the methodology that will be used by the department to evaluate proposals, the procedure for final selection of the design-build entity, and any other information deemed necessary by the director to inform interested parties of the contracting opportunity. (2) (A) Significant factors that the department reasonably expects to consider in evaluating qualifications, including technical design and construction expertise, skilled labor force availability, and all other nonprice-related factors. (B) For purposes of subparagraph (A), skilled labor force availability shall be deemed satisfied by the existence of an agreement with a registered apprenticeship program, approved by the California Apprenticeship Council, that has graduated at least one apprentice in each of the preceding five years. This graduation requirement shall not apply to programs providing apprenticeship training for any craft that was first deemed by the federal Department of Labor and the Department of Industrial Relations to be an apprenticeable craft within the five years prior to the effective date of this article. (3) A standard template request for statements of qualifications prepared by the department. In preparing the standard template, the department may consult with the construction industry, the building trades and surety industry, and other agencies interested in using the authorization provided by this article. 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 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) Based on the documents prepared as described in subdivision (a), the director shall prepare a request for proposals that invites prequalified or short-listed entities to submit competitive sealed proposals in the manner prescribed by the department. 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 department 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 department to inform interested parties of the contracting opportunity. (2) Significant factors that the department 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 department may reserve the right to request proposal revisions and hold discussions and negotiations with responsive proposers, in which case the department 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 department to ensure that any discussions or negotiations are conducted in good faith. (d) 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. (e) 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. (2) Pursuant to subdivision (c), the department may hold discussions or negotiations with responsive proposers using the process articulated in the department'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 director to have offered the best value to the public. (5) Notwithstanding any other provision of this code, upon issuance of a contract award, the director shall publicly announce its award, identifying the design-build entity to which the award is made, along with a written decision supporting its contract award and stating the basis of the award. (6) The written decision supporting the director's contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit. 10192. (a) The design-build entity shall provide payment and performance bonds for the project in the form and in the amount required by the director, 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 department shall develop a standard form of payment and performance bond for its design-build projects. 10193. (a) The department, 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. (b) 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 department, 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.  10194. (a) If the department elects to award a project pursuant to this article, retention proceeds withheld by the department from the design-build entity shall not exceed 5 percent, except as otherwise specified in this section. (b) (1) 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 department and the design-build entity. (2) This subdivision shall not apply 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 from the subcontractor, 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 department and the design-build entity from any payment made by the design-build entity to the subcontractor. (3) Notwithstanding any other provision of this section, the retention proceeds withheld from any payment by a department from the original design-build entity, by the original design-build entity contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, may exceed 5 percent on specific projects where the director has made a finding prior to the proposal due date that the project is substantially complex and therefore requires a higher retention amount than 5 percent, and the department includes both this finding and the actual retention amount in the procurement documents.   10194. (a) If the department elects to award a project pursuant to this article, retention proceeds withheld by the department 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. (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 department 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 department and the design-build entity from any payment made by the design-build entity to the subcontractor.   10194.   10195.  Nothing in this article affects, expands, alters, or limits any rights or remedies otherwise available at law. SEC. 6. Section 20133 of the Public Contract Code is repealed. SEC. 7. Section 20175.2 of the Public Contract Code is repealed. SEC. 8. Section 20193 of the Public Contract Code is repealed. SEC. 9. Section 20209 of the Public Contract Code is repealed. SEC. 10. Section 20301.5 of the Public Contract Code is repealed. SEC. 11. Article 22 (commencing with Section 20360) of Chapter 1 of Part 3 of Division 2 of the Public Contract Code is repealed. SEC. 12. Section 20688.6 of the Public Contract Code is repealed. SEC. 13. Chapter 4 (commencing with Section 22160) is added to Part 3 of Division 2 of the Public Contract Code, to read: CHAPTER 4. LOCAL AGENCY DESIGN-BUILD PROJECTS 22160. (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 such 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 the following occur: (1) This article provides general authorization for local agencies to use design-build for projects, excluding projects on the state highway system. (2) This article shall not be deemed to provide a preference for the design-build method over other procurement methodologies. 22161. For purposes of this article, the following definitions apply: (a) "Best value" means a value determined by evaluation of  proposals with reference to specified criteria objectively applied, including, but not limited to, price, quality of technical proposals, qualifications of key personnel, and other criteria deemed appropriate by the local agency.   objective criteria related to price, features, functions, life cycle costs, experience, and past performance.  A best value determination may entail selection of the lowest priced technically acceptable proposal or selection of the best proposal for a fixed price established by the procuring agency, or it may consist of a tradeoff between price and other specified factors. (b) "Construction subcontract" means each subcontract awarded by the design-build entity to a subcontractor that will perform work or labor or render service to the design-build entity in or about the construction of the work or improvement, or a subcontractor licensed by the State of California that, 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) "Design-build team" means the design-build entity itself and the individuals and other entities identified by the design-build entity as members of its team. Members shall include the general contractor and, if utilized in the design of the project, all electrical, mechanical, and plumbing contractors. (f) "Local agency" means the following: (1) A city, county, or city and county. (2) A special district that operates wastewater facilities, solid waste management facilities, or water recycling facilities. (3) Any transit district, included transit district, municipal operator, included municipal operator, or transit development board, as defined in Section 99210 of the Public Utilities Code, or a consolidated agency, as defined in Section 132353.1 of the Public Utilities Code, or any joint powers authority formed to provide transit service.  (g) (1) For a local agency defined in paragraph (1) of subdivision (f), "project" means the construction of a building and improvements directly related to the construction of a building, and county sanitation wastewater treatment facilities, but does not include the construction of other infrastructure, including, but not limited to, streets and highways, public rail transit, or water resources facilities and infrastructure. For a local agency defined in paragraph (1) of subdivision (f) that operates wastewater facilities, solid waste management facilities, or water recycling facilities, "project" also means the construction of regional and local wastewater treatment facilities, regional and local solid waste facilities, or regional and local water recycling facilities.   (2) For a local agency defined in paragraph (2) of subdivision (f), "project" means the construction of regional and local wastewater treatment facilities, regional and local solid waste facilities, or regional and local water recycling facilities.   (3) For a local agency defined in paragraph (3) of subdivision (f), "project" means a transit capital project.  22162. (a) Notwithstanding any other law, a local agency, with approval of its governing body, may procure design-build contracts for public works projects in excess of one million dollars ($1,000,000), awarding the contract either the low bid or the best value, provided that this article shall not apply to any projects on the state highway system. (b) The local agency 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 local agency 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 local agency entering into design-build contracts authorized under this article. 22163. (a) For contracts for public works projects awarded on or after the effective date of the regulations adopted by the Department of Industrial Relations pursuant to subdivision (g) of Section 1771.5 of the Labor Code, the local agency shall reimburse the department 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. 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, subject to appropriation by the Legislature, be used only for enforcement of prevailing wage requirements on those projects. (b) In lieu of reimbursing the Department of Industrial Relations for its reasonable and directly related costs of performing monitoring and enforcement on public works projects, the local agency may elect to continue operating an existing previously approved labor compliance program to monitor and enforce prevailing wage requirements on the project if it has either not contracted with a third party to conduct its labor compliance program and requests and receives approval from the department to continue its existing program or it enters 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. 22164. The procurement process for the design-build projects shall progress as follows: (a) (1) The local agency shall prepare a set of documents setting forth the scope and estimated price of the project. The documents may include, but need not be 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 local agency'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 any project. (b) Based on the documents prepared under subdivision (a), the local agency shall prepare and issue a request for qualifications in order to prequalify or short-list the design-build entities whose proposals shall be evaluated for final selection. The request for qualifications 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 expected cost range, the methodology that will be used by the local agency to evaluate proposals, the procedure for final selection of the design-build entity, and any other information deemed necessary by the local agency to inform interested parties of the contracting opportunity. (2) (A) Significant factors that the local agency reasonably expects to consider in evaluating qualifications, including technical design and construction expertise, skilled labor force availability, and all other nonprice-related factors. (B) For purposes of subparagraph (A), skilled labor force availability shall be deemed satisfied by the existence of an agreement with a registered apprenticeship program, approved by the California Apprenticeship Council, that has graduated at least one apprentice in each of the preceding five years. This graduation requirement shall not apply to programs providing apprenticeship training for any craft that was first deemed by the federal Department of Labor and the Department of Industrial Relations to be an apprenticeable craft within the five years prior to the effective date of this article. (3) A standard template request for statements of qualifications prepared by the local agency. In preparing the standard template, the local agency may consult with the construction industry, the building trades and surety industry, and other local agencies interested in using the authorization provided by this article. 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 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) Based on the documents prepared as described in subdivision (a), the local agency shall prepare a request for proposals that invites prequalified or short-listed entities to submit competitive sealed proposals in the manner prescribed by the local agency. 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 local agency 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 local agency to inform interested parties of the contracting opportunity. (2) Significant factors that the local agency 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 local agency may reserve the right to request proposal revisions and hold discussions and negotiations with responsive proposers, in which case the local agency 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 local agency to ensure that any discussions or negotiations are conducted in good faith. (d) 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. (e) 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. (2) Pursuant to subdivision (c), the local agency may hold discussions or negotiations with responsive proposers using the process articulated in the local agency'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 local agency to have offered the best value to the public. (5) Notwithstanding any other provision of this code, upon issuance of a contract award, the local agency shall publicly announce its award, identifying the design-build entity to which the award is made, along with a written decision supporting its contract award and stating the basis of the award. (6) The written decision supporting the local agency's contract award, described in paragraph (5), and the contract file shall provide sufficient information to satisfy an external audit. 22165. (a) The design-build entity shall provide payment and performance bonds for the project in the form and in the amount required by the local agency, 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 local agency shall develop a standard form of payment and performance bond for its design-build projects. 22166. (a) The local agency, 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. (b) 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 local agency, 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.  22167. (a) If the local agency elects to award a project pursuant to this article, retention proceeds withheld by the local agency from the design-build entity shall not exceed 5 percent, except as otherwise specified in this section. (b) (1) 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 local agency and the design-build entity. (2) This subdivision shall not apply 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 from the subcontractor, 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 local agency and the design-build entity from any payment made by the design-build entity to the subcontractor. (3) Notwithstanding any other provision of this chapter, the retention proceeds withheld from any payment by a local agency from the original design-build entity, by the original design-build entity contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, may exceed 5 percent on specific projects if the governing body of the public entity or designee, including, but not limited to, a general manager or other director of an appropriate department, has approved a finding during a properly noticed and normally scheduled public hearing and prior to the proposal due date that the project is substantially complex and therefore requires a higher retention amount than 5 percent, and the local agency includes both this finding and the actual retention amount in the procurement documents.   22167. (a) If the local agency elects to award a project pursuant to this article, retention proceeds withheld by the local agency from the design-build entity shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids. (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 local 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 local agency and the design-build entity from any payment made by the design-build entity to the subcontractor.  22168. Nothing in this article affects, expands, alters, or limits any rights or remedies otherwise available at law. SEC. 14. 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.