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MEMORANDUM
Kenton L. Alm
Attorney at Law
Direct Dial: (510) 808-2081
kalm@meyersnave.com
DATE: May 4, 2016
TO: Engineering & Operations Committee Board Members
Central Contra Costa Sanitary District
FROM: Kenton L. Alm
District Counsel
RE: Use of Design -Build Procurement for Sanitary District Projects
A request has been made for an update on the potential for the District to use a design -build
procurement process for some of its projects. Prior to January 1, 2015, there were only very
limited projects of the District that would have statutorily qualified for use of the design -
build process. Accordingly, this approach has not historically been used by the District.
However, on September 30, 2014, Governor Jerry Brown signed into law Senate Bill 785
which, among other things, updated and rewrote the statutes relating to design -build
procurement for many local public agency projects throughout the state.
Senate Bill 785 repealed several design -build statutes that applied to specific agencies for
particular projects in favor of one primary set of design -build procurement standards for
cities, counties, and special districts that operate wastewater, solid waste and water recycling
facilities. This recent law adds a new chapter to the Public Contract Code (Sections 22160 et
seq.), which sets forth a detailed protocol for pursuing the design -build approach. It also
repealed most of the prior statutory authorizations for local public agency's use of design -
build. This recent legislation includes a number of limitations on use of design -build,
including a limitation that it only may be used for public works projects over one million
dollars. Accordingly, at this time there is no authorization for use of the design -build
procurement process for smaller special district projects.
The additional limitations include the requirement that any firm that seeks to qualify as a
"design -build entity" must provide an "enforceable commitment" to the local agency that the
entity and its subcontractors will use a "skilled and trained workforce" to perform all work
that falls within an apprenticeable occupation in the building and construction trades. The
use of a "skilled and trained workforce" requires, among other things, that all workers be
skilled journeypersons or apprentices registered in an apprenticeship program approved by
the Chief of the Division of Apprenticeship Standards. This apprenticeship requirement
appears to be tailored to require use of union contractors and subcontractors and potentially
may be complied with by entering into a project labor agreement.
Use of Design -Build Procurement for Sanitary District Projects
May 4, 2016
Page 2
Local agencies using this procurement method are now required to first prepare and issue a
request for qualifications in order to pre -qualify a short-list of design -build entities that, if
pre -qualified, will be invited to bid on the project. This design -build approach does allow for
selecting the design -build entity on a "best value" evaluation that may include price, features,
functions, life cycle costs, experience and past performance. A best value determination
"may," but need not, involve the selection of the lowest cost proposal meeting the interest of
the local agency. This definition of best value does permit consideration of a "trade off
between price and other specific factors." (See Public Contracts section 22161(a)). In other
words, the local agency may award the contract either on a low bid (lowest cost proposal) or
best value basis that considers factors other than the lowest cost.
There are a number of other provisions set forth that are not typical to the design -bid -build
process. The local agency initially is required to develop guidelines for a conflict of interest
policy regarding whether an entity that provides services relating to the solicitation of the
design -build project may submit or participate in a proposal as the design -build entity. The
public agency must also initially prepare a set of documents setting forth the scope, price
estimate of the project and performance specifications or plans. The scope cannot include an
option of design -build -operate proposal. This scope document will be used as a basis for
prequalifying the pool of eligible design -build proposers. The next step is to use a request
for proposal approach to select the design -build entity from the prequalified firms. The
criteria for selection and award of the design -build entity will vary depending on whether the
request for proposal provides for the use of the low bid or best value selection criteria. Other
typical public works requirements such as performance bonds are required.
This statute does set up a new process which may certainly be useful to the District for
certain projects. The District's standard procurement documents are not suitable for this non-
traditional process, but the required new procedures and documents can be developed
internally or undoubtedly be obtained through use of consultants or engineering firms.
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