Design-build Contracts - Community Colleges, Education Facilities - Education - CA

Section § 81700

This law allows community colleges in California to use a design-build process for construction projects. Design-build means that one entity handles both the design and construction, which can speed up projects, keep costs down, and reduce risks. The law also ensures that there's a clear understanding of everyone's role in the project and aims to shift some financial risks to the company doing the work. However, it doesn't replace traditional bidding processes or change legal obligations for public agencies or contractors. Also, funding for these projects can be handled in different stages.

(a) It is the intent of the Legislature to enable community college districts to use safe and cost-effective options for building and modernizing community college facilities. The Legislature has recognized the merits of the design-build procurement process in the past by authorizing its use for projects undertaken by the University of California, specified local government projects, including school districts, and state office buildings.

(b) The Legislature also finds and declares that community college districts using a design-build contract require a clear understanding of the roles and responsibilities of each participant in the design-build process. The benefits of a design-build contract project delivery system include accelerated completion of the projects, cost containment, reduction of construction complexity, and reduced exposure to risk for the community college district. The Legislature also finds that the cost-effective benefits to the community college districts are achieved by shifting the liability and risk for cost containment and project completion to the design-build entity.

(c) It is the intent of the Legislature to provide an optional, alternative procedure for bidding and building community college construction projects.

(d) In addition, it is the intent of the Legislature that the full scope of design, construction, and equipment awarded to a design-build entity under this chapter shall be authorized in a single funding phase. The funding phase may be authorized concurrently with, or separately from, the phase that authorizes the creation of the performance criteria and concept drawings.

(e) It is the intent of the Legislature that design-build procurement as authorized by this chapter shall not be construed to extend, limit, or change in any manner the legal responsibility of public agencies and contractors to comply with existing laws.

(f) In addition, it is the intent of the Legislature that design-build procurement does not replace or eliminate competitive bidding.

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Section § 81701

This section of the law explains specific terms related to community college projects. It defines "best value" as a way to measure quality using criteria like price and features, decided by the community college district. It also defines "design-build" as a process where one entity handles both the design and construction of a project. Finally, it explains that a "design-build entity" is an organization capable of providing the necessary contracting, architectural, and engineering services for such projects.

As used in this chapter, the following terms have the following meanings:

(a) “Best value” means a value determined by objective criteria and may include, but need not be limited to, price, features, functions, life-cycle costs, and other criteria deemed appropriate by the community college district.

(b) “Design-build” means a procurement process in which both the design and construction of a project are procured from a single entity.

(c) “Design-build entity” means a corporation, limited partnership, partnership, or other association that is able to provide appropriately licensed contracting, architectural, and engineering services as needed pursuant to a design-build contract.

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Section § 81702

This law allows a community college district in California to use a design-build contract for a new facility if it costs more than $2.5 million. The district's governing board must decide the design-build method is better for reducing costs, speeding up completion, or achieving project features not possible through the regular process.

Before starting the project, they must evaluate both the traditional and design-build methods, adopt a resolution, and ensure state authorities approve the project's outlined requirements.

(a) Upon a determination by a community college district governing board that it is in the best interest of the community college district, the governing board may enter into a design-build contract for both the design and construction of a community college facility if that expenditure exceeds two million five hundred thousand dollars ($2,500,000) if, after evaluation of the traditional design, bid, and build process of community college facility construction and of the design-build process in a public meeting, the governing board makes written findings that use of the design-build process on the specific project under consideration will accomplish one of the following objectives: reduce comparable project costs, expedite the project’s completion, or provide features not achievable through the traditional design-bid-build method. The governing board shall also review the guidelines developed pursuant to Section 81706 and shall adopt a resolution approving the use of a design-build contract pursuant to this chapter prior to entering into a design-build contract.

(b) No state funds appropriated for a design-build capital outlay project may be expended until the Department of Finance and the State Public Works Board have approved performance criteria, or performance criteria and concept drawings, for the project to be financed from the appropriation for capital outlay.

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Section § 81703

When a community college district in California wants to undertake a design-build project, it must follow a structured process. This begins with the district's governing board issuing a request for proposal (RFP) that outlines the project details like building size and specifications. A licensed design professional in California must prepare the specs and plans, and the RFP must not include design-build-operate contracts for educational facilities. The RFP should include how proposals will be rated, whether by cost or other factors, and if discussions or negotiations will be permitted with bidders.

The district must prequalify design-build entities based on criteria in a different section. From July 1, 2020, these entities must commit to using a skilled and trained workforce, unless specific labor agreements are in place. For selecting the final design-build entity, the community college can use competitive bidding or a broader competition that may consider design, costs over time, and other factors. After evaluating, bids are ranked from best to least advantageous, and awards are given based on written judgments that must withstand external audits. The governing board must publicly announce the contract award details.

Extra requirements involve the use of apprenticeship programs, maintaining safety standards, and considering past design-build and California school experience of bidders.

Design-build projects shall progress as follows:

(a)

(1) The community college district governing board shall prepare a request for proposal setting forth the scope of the project that may include, but is not limited to, the size, type, and desired design character of the buildings and site, performance specifications covering the quality of materials, equipment, and workmanship, preliminary plans or building layouts, or any other information deemed necessary to describe adequately the community college district’s needs. The performance specifications and any plans shall be prepared by a design professional duly licensed or registered in this state to perform the services required by the Field Act, as defined in Section 17281. The request for proposal shall not include a design-build-operate contract for educational facilities pursuant to this chapter.

(2) Each request for proposal shall do all of the following:

(A) Identify the basic scope and needs of the project or contract, the expected cost range, and other information deemed necessary by the community college district to inform interested parties of the contracting opportunity.

(B) Invite interested parties to submit competitive sealed proposals in the manner prescribed by the community college district.

(i) All significant factors and subfactors that the community college district reasonably expects to consider in evaluating proposals, including cost or price and all nonprice related factors and subfactors.

(ii) The methodology and rating or weighting scheme that will be used by the community college district governing board in evaluating competitive proposals and specifically whether proposals will be rated according to numeric or qualitative values.

(iii) The relative importance or weight assigned to each of the factors identified in the request for proposal.

(iv) As an alternative to clause (iii), the governing board of a community college district shall specifically disclose whether all evaluation factors other than cost or price, when combined, are any of the following:

(I) Significantly more important than cost or price.

(II) Approximately equal in importance to cost or price.

(III) Significantly less important than cost or price.

(v) If the community college district governing board wishes to reserve the right to hold discussions or negotiations with responsive bidders, it shall so specify in the request for proposal and shall publish separately or incorporate into the request for proposal applicable rules and procedures to be observed by the community college district to ensure that any discussions or negotiations are conducted in a fair and impartial manner.

(3) Notwithstanding Section 4-315 of Title 24 of the California Code of Regulations, an architect or structural engineer who is party to a design-build entity may perform the services set forth in Section 81138.

(b) The community college district shall establish a procedure to prequalify design-build entities based on the requirements specified in subdivision (b) of Section 17250.25.

(c)

(1) On or after July 1, 2020, a design-build entity shall not be prequalified or shortlisted unless the entity provides an enforceable commitment to the community college 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, in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.

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

(A) The community college district 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 community college district before July 1, 2020.

(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 of the Public Contract Code.

(d) The community college district shall establish a procedure for final selection of the design-build entity. Selection shall be based on either of the following criteria:

(1) A competitive bidding process resulting in lump-sum bids by the prequalified or shortlisted design-build entities. Award shall be made on the basis of the lowest responsible bid.

(2) Notwithstanding any other provision of this code or of Section 20650 of the Public Contract Code, a community college district may use a design-build competition based upon performance and other criteria set forth by the governing board of the community college district in the solicitation of proposals from prequalified or shortlisted design-build entities. Criteria used in this evaluation of proposals may include, but need not be limited to, the proposed design approach, life-cycle costs, project features, and project functions. However, competitive proposals shall be evaluated by using the criteria and source selection procedures specifically identified in the request for proposal. Once the evaluation is complete, all responsive bidders shall be ranked from the most advantageous to least advantageous to the community college district. A community college district that limits the number of responsible bidders participating in the design-build competition, at any time after a request for a proposal has been issued, shall use the source selection procedures and minimum factors set forth in subparagraph (C).

(A) An architectural firm, engineering firm, construction manager, contractor, subcontractor, consultant, or individual retained by the governing board of the community college district directly or indirectly before the award of the project to assist in the planning of the project, including, but not necessarily limited to, the development criteria or preparation of the request for proposal, shall not be eligible to participate in the competition with the design-build entity or to perform work on the project as a subcontractor.

(B) The award of the contract shall be made to the responsible bidder whose proposal is determined, in writing by the community college district, to be the best value to the community college district.

(C) Proposals shall be evaluated and scored solely on the basis of the factors and source selection procedures identified in the request for proposal. However, the following minimum factors shall each represent at least 10 percent of the total weight or consideration given to all criteria factors: price, technical expertise, life-cycle costs over 15 years or more, acceptable safety record, and, on or before July 1, 2020, skilled labor force availability.

(D) The community college district governing board shall issue a written decision supporting its contract award and stating in detail the basis of the award. The decision and the contract file must be sufficient to satisfy an external audit.

(E) Notwithstanding any provision of the Public Contract Code, upon issuance of a contract award, the community college district governing board shall publicly announce its awards identifying the contractor to whom the award is made, the winning contractor’s price proposal and its overall combined rating on the request for proposal evaluation factors. The notice of award shall also include the agency’s ranking in relation to all other responsive bidders and their respective price proposals and a summary of the community college district’s rationale for the contract award.

(F) For purposes of this chapter, “skilled labor force availability” means that an agreement exists with a registered apprenticeship program that has been approved pursuant to Chapter 4 (commencing with Section 3070) of Division 3 of the Labor Code and has graduated apprentices in each of the immediately preceding five years. This graduation requirement shall not apply to programs providing apprenticeship training for any craft that has not been deemed by the Department of Labor and the Department of Industrial Relations to be an apprenticeable craft in the five years before enactment of the act adding this section.

(G) For purposes of this chapter, a bidder’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 bidder is a party to an alternative dispute resolution system as provided for in Section 3201.5 of the Labor Code.

(H) For purposes of this chapter, when a community college district determines a design-build entity’s “experience,” the community college district shall give credit only to design-build experience and to California school design and construction experience.

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Section § 81704

This law section focuses on design-build contracts for community college projects in California. It mandates that these entities have proper bonds and insurance for design and construction work. Payment and performance bonds should follow a uniform form created by the Department of General Services. Unlisted subcontracts must be awarded according to procedures established by the community college district, which involves public notices and set award dates.

Subcontractors have protections under existing public contract laws, with retention proceeds limited to 5% if performance and payment bonds are involved. Subcontractors unable to provide a required bond may face higher withholding. Design-build entities can use securities instead of withholding payments under certain conditions. For contracts before 2012, labor compliance programs must be established unless a collective bargaining agreement exists, while those awarded from 2012 to 2020 must follow specific labor code requirements.

(a) Any design-build entity that is selected to design and build a project pursuant to this chapter shall possess or obtain sufficient bonding to cover the contract amount for nondesign services, and errors and omission insurance coverage sufficient to cover all design and architectural services provided in the contract. This chapter does not prohibit a general or engineering contractor from being designated the lead entity on a design-build entity for the purposes of purchasing necessary bonding to cover the activities of the design-build entity.

(b) Any payment or performance bond written for the purposes of this chapter shall use a bond form developed by the Department of General Services pursuant to subdivision (g) of Section 14661 of the Government Code. The purpose of this subdivision is to promote uniformity of bond forms to be used on community college district design-build projects throughout the state.

(c)

(1) All subcontracts that were not listed by the design-build entity in accordance with Section 81703 shall be awarded by the design-build entity in accordance with the design-build process set forth by the community college district in the design-build package.

(2) The design-build entity shall do all of the following:

(A) Provide public notice of the availability of work to be subcontracted.

(B) Provide a fixed date and time on which the subcontracted work will be awarded.

(3) Subcontractors bidding on contracts pursuant to this subdivision shall be afforded the protections contained in Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Contract Code.

(4)

(A) If the community college district elects to award a project pursuant to this section, retention proceeds withheld by the community college district 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 shall not exceed the percentage specified in the contract between the community college district and the design-build entity. If the design-build entity provides written notice to any subcontractor who is not a member of the design-build entity, 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 design-build entity, then the design-build entity may withhold retention proceeds in excess of the percentage specified in the contract between the community college district and the design-build entity from any payment made by the design-build entity to the subcontractor.

(5) In accordance with the provisions of applicable state law, the design-build entity may be permitted to substitute securities in lieu of the withholding from progress payments. Substitutions shall be made in accordance with Section 22300 of the Public Contract Code.

(d)

(1) For contracts for public works projects awarded before January 1, 2012, the community college district shall establish and enforce a labor compliance program containing the requirements outlined in Section 1771.5 of the Labor Code or shall contract with a third party to operate a labor compliance program containing the requirements outlined in Section 1771.5 of the Labor Code. This requirement shall not apply to projects where the community college district or the design-build entity has entered into a collective bargaining agreement that binds all of the contractors performing work on the project.

(2) For contracts for public works projects awarded on or after January 1, 2012, until July 1, 2020, the project shall be subject to the requirements of Section 1771.4 of the Labor Code.

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Section § 81705

This law outlines guidelines for community college construction projects using a design-build approach. The design-build entity must follow specific quality and design standards set by the community college district, and any changes need written permission. The district's board is recommended to hire an architect or engineer to ensure these standards are met. Moreover, the district employs an independent inspector to oversee the project's integrity, who should not be connected to the contractors. No construction can start without safety approval from the Department of General Services. The design-build company is responsible for building according to the contract terms unless stated otherwise.

(a) The minimum performance criteria and design standards established pursuant to this chapter by a community college district for quality, durability, longevity, and life cycle costs, and other criteria deemed appropriate by the community college district shall be adhered to by the design-build entity. Any deviations from those standards may only be allowed by written consent of the community college district. The governing board may, and is strongly encouraged to, retain the services of an architect or structural engineer throughout the course of the project in order to ensure compliance with this chapter. Any architect or structural engineer retained pursuant to this subdivision shall be duly licensed and registered in California.

(b) The community college district governing board shall be the employer of the inspector. The project inspector shall be fully independent from any member of the design-build entity and may not have any affiliation with any member of the design-build entity or any of the project subcontractors. The total price of the project shall be determined either upon receipt of the lump-sum bids as set forth in paragraph (1) of subdivision (c) of Section 81703, or by completion of the process pursuant to paragraph (2) of subdivision (c) of Section 81703.

(c) The project inspector shall act under the direction of either the Director of General Services or a competent, qualified agent of the community college district.

(d) Each contract with a design-build entity shall provide that no construction or alteration of any community college facility pursuant to this section shall commence prior to the receipt of the written approval of the plans, as to the safety of design and construction, from the Department of General Services. Compliance with this provision shall be deemed to be in compliance with Section 81133.

(e) The design-build entity shall be liable for building the facility to specifications set forth in the design-build contract in the absence of contractual language to the contrary.

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Section § 81707

Community college districts in California using the design-build approach for construction projects must create a detailed report for the Legislative Analyst when a project is completed. This report has to be submitted within 60 days after project completion and will help assess the design-build method. It needs to include details like the type and size of the facility, which contractor was selected, estimated versus actual project timelines and costs, and the quality comparison with other projects done differently. Additionally, any written protests or Labor Code violations, and an assessment of relevant findings and outcomes must be included. The aim is to decide if design-build should be continued or adjusted.

Each community college district governing board that adopts the design-build process for a project pursuant to this chapter shall submit to the Legislative Analyst a report on the project at the completion of the project. Completion shall have the same meaning as defined in subdivision (c) of Section 7107 of the Public Contract Code. This report shall be submitted within 60 days after completion of the project. The Legislative Analyst shall submit an interim report to the Legislature by January 1, 2005, and a final report to the Legislature by January 1, 2007. The reports shall include, but not be limited to, all of the following information as to each project:

(a) The type of facility.

(b) The gross square footage of the facility.

(d) The estimated and actual length of time to complete the project.

(e) The estimated and actual project cost.

(f) A description of the relative merits of a project procured pursuant to this chapter and similar projects procured pursuant to other provisions of this code.

(g) A description of any written protest concerning any aspect of the solicitation, bid, proposal, or award of the design-build project, including the resolution of the protest.

(h) Other pertinent information that may be instructive in evaluating whether the design-build method of procurement should be continued, expanded, or prohibited.

(i) The findings established pursuant to Section 81702 and a postcompletion evaluation as to whether the findings were achieved.

(j) Any Labor Code violations discovered during the course of construction or following completion of the project, as well as any fines or penalties assessed.

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Section § 81708

This law states that a community college district cannot start any new design-build projects if they have not submitted the required report to the Legislative Analyst’s Office within 60 days of completing a previous design-build project.

A community college district shall not commence any additional design-build projects if 60 days has elapsed after completion of a design-build project without having filed the report to the Legislative Analyst’s Office required pursuant to Section 81707.

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Section § 81709

This law will expire on January 1, 2030, unless a new law is passed before that date to change or extend its expiration.

This chapter shall remain in effect only until January 1, 2030, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2030, deletes or extends that date.

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