DESIGN-BUILD IN CALIFORNIA

DESIGN-BUILD IN CALIFORNIA 1. Why Design-Build Design Build Drivers, Goals and Challenges (see Reed Construction Data and DGS handouts) 2. Who Can Do Design-Build Design-Build Authorizing Statutes for California Governmental Authorities (see California Design-Build Matrix) a. School Districts: Education Code 17250.10 et seq. (expires 2013) b. General Law Cities: Public Contract Code 20175.2 (expires 2015) c. Water Districts: Public Contract Code 20640 et seq. (general authorization) d. Charter Cities: Dictated by City Charter 3. How To Do Design-Build Sample Processes a. California Department of General Services (see DGS handouts) b. General Law Cities and School Districts (see above referenced statutes) 4. Keys to Success with Design-Build a. Pick the right project (i.e., balance risk and reward) b. Provide the right package (i.e., invest more work on the front end to determine needs, criteria and provide a detailed scope and RFP package) c. Pick the right team, including hiring a construction manager and/or master architect/engineer Shawn Monterastelli 714.338.1866 smonterastelli@rutan.com

Design Build Experience of the State and Consumer Agency, Department of General Services, Real Estate Services Division Anna Caballero, Secretary, State and Consumer Services Agency September 2011

Design Build Experience Over $1.8 Billion in Design-Build Projects since 1995 Office Buildings, Care Facilities, Central Plant Facility 10 Projects Renovation and New Construction $69 million to $411 million Total Project Value Zero Claims 100 Percent On Time Multiple Prime Contractors Variety of Performance Criteria/Bridging Documents Used Stipulated Sum/Best Value, Price Proposal/Best Value

Drivers of Design-Build Lack of Cost Control Change Orders Litigious Nature of Design/Bid/Build Cost and Schedule Overruns Multiple Contracts Lack of Coordination Between Contracts Lack of Quality Selection Based on Cost Alone Early Identification of Total Project Costs allows for Earlier Bond Sale

Design-Build Goals Improve Project Delivery Accelerate Delivery Schedules Reduce Costs Improve Coordination Between Parties Reduce Risks, Claims, and Litigation Improve Quality Selection Based on Qualifications, Value, Cost, and Other Criteria i

Challenges to Design-Build D-B Seen as New and Untested Ensure Competitive Bid Process Quality Control New Contract Format State Used to Being in Control Approvals by State Regulatory Agencies Legislative Authority Required to Use D-B CEQA Process Can be More Difficult

Trends Towards Design-Build We re past. is Design-Build ild a good idea? US Army Corps of Engineer email dated July 18, 2011 Unclassified: Some very interesting information. Same Contractor, same facility type, same year of award: Design-Build Battalion HdQtrs: Design-Bid-Build Battalion HdQtrs: $265 SF $355 SF Let the Contractor (DB-er) provide the solution which is most efficient to his expertise/efficiencies and let him take responsibility for errors & omissions drastically lower cost/time growth. Save money, get more project, take on less risk, speed delivery and demand less resources in the field to manage.

California Design-Build Matrix Agency Facilities/Notes Selection Process Statute/Regulation California Department of Transportation 10 state highway, bridge or tunnel projects and 5 local street or road, bridge, tunnel, or public transit projects. Lowest bid or best value determined by the California Transportation Commission. PCC 6800 et seq. University of California All facilities exceeding $50,000. Best value selection. Approval by UC Regents required. PCC 10503(b) If for the UCSF pilot program must use lowest responsible bidder combined with best value basis. (PCC 10506.4) California State University All projects. Competitive bidding selection criteria for contractor PCC 10708(b) All California Counties For buildings, county sanitation wastewater treatment facilities over $2.5 million w/ approval from the board of supervisors. Lowest bid or best value PCC 20133 (expires at the end of June 30, 2014) All Cities For building and modernizing public facilities exceeding $1,000,000. Lowest bid or best value PCC 20175.2 (expires at the end of 2015) All cities, counties, special districts For local wastewater facilities, solid waste, or water recycling facilities over $2.5 million. 20 design-build projects authorized under this statute. Lowest bid or best value PCC 20193-20195 (effective until the end of 2019) -1-

Agency Facilities/Notes Selection Process Statute/Regulation Transit operators Transit projects (not state highway construction or local street and road projects). (PCC 20209.13) Lowest bid or best value PCC 20209 et seq. (expires at the end of 2014) Capital maintenance of capacity enhancing design-build rail project must exceed 25 million. (PCC 20209.7(f)) Santa Clara Valley Transportation Authority Transit center or station, transit park-and-ride lot, bus and light rail maintenance facility, or administrative office building, or any combination of those, upon approval by the board of directors. Also can be for the Fremont-South Bay Commuter Rail Project upon approval by the board of directors. Lowest bid (PCC 20301.5(e).) PCC 20301.5 Municipal Water Districts For construction and labor the district prescribed the method of contracting. Method prescribed by the district. For work over $35,000 and not done by district itself, the method is to the lowest responsible bidder. PCC 20640 et seq. Redevelopment Agencies Needs approval of board in a public hearing. Only for projects over $1 million. Only 10 design-build projects authorized. Lowest bid or best value PCC 20688.6-2-

Agency Facilities/Notes Selection Process Statute/Regulation State Agencies Fee producing infrastructure projects: irrigation, drainage, energy or power production, water supply, treatment, and distribution, flood control, inland waterways, harbors, municipal improvements, commuter and light rail, highways or bridges, tunnels, airports and runways, purification of water, sewage treatment, disposal, and water recycling, refuse disposal, and structures or buildings, except structures or buildings that are to be utilized primarily for sporting or entertainment events. Competitive bidding not required; selection by a competitive negotiation process. (Gov. Code 5956.5) Gov. Code 5956 et seq. City of Santa Clara and the Redevelopment Agency of the City of Santa Clara Construction, operation and maintenance of a professional football stadium located within the North Bayshore Redevelopment Project Area. Limits: Design-build contract cannot use Santa Clara general or enterprise funds, agency funding limited to specific maximum amount, and private party is responsible for construction cost overruns. Competitive bidding not required if: stadium approved in a ballot measure, governing body determines the contract cost is reasonable and in the best interest of the governing body. For sub-contractors: competitive bid or best value, but Redevelopment Agency of the City of Santa Clara or a community facilities district funds can only be used for competitive bids. Gov. Code 6532-3-

Agency Facilities/Notes Selection Process Statute/Regulation City of Sacramento Capitol area improvements (state office and other facilities). Best value (for projects $10 million and up) Gov. Code 8169.5; Gov. Code 14661 Competitive bidding (for projects $250,000 and up) Department of General Services Requires the Department of Finance and the State Public Works Board to approve project for state agencies. For example: University of California, the California State University, the California Community Colleges, and the Judicial Council. Best value (for projects $10 million and up) Competitive bidding (for projects $250,000 and up) Gov. Code 13332.19; Gov. Code 14661 Project must be approved by the Department of Finance prior to selection process. Department of General Services Real property in San Bernardino for offices and parking facilities for the Department of Transportation in the Riverside/San Bernardino region. Gov. Code 14016 Department of General Services or the Department of Corrections and Rehabilitation State office facilities and prison facilities. Best value (for projects $10 million and up) Competitive bidding (for projects $250,000 and up) Gov. Code 14661.1-4-

Agency Facilities/Notes Selection Process Statute/Regulation Department of General Services To consolidate state offices in the City of Los Angeles, the San Francisco Civic Center Area, and the City of Oakland. Best value (for projects $10 million and up) Competitive bidding (for projects $250,000 and up) Gov. Code 14669.5; Gov. Code 14669.8; Gov. Code 14669.12 (Gov. Code 14661) Department of General Services Veteran homes in Fresno and Shasta Counties. Best value (for projects $10 million and up) Gov. Code 15819.60; Gov. Code 14661 Competitive bidding (for projects $250,000 and up) Corrections Standards Authority Local jail facilities. (Gov. Code 15820.90) Lowest bid or best value Gov. Code 15820.901 Judicial Council Court facilities. Determined by what the Judicial Council deems is the best interest: Gov. Code 70391.7 Best value (for projects $10 million and up) Competitive bidding (for projects $250,000 and up) -5-

Agency Facilities/Notes Selection Process Statute/Regulation Charter cities Where a city charter specifically allows for design-build for certain facilities. Dictated by the city charter. The charter rule governs construction award criteria as set forth in Smith v. City of Riverside, 34 Cal.App.3d 529 (1973). School Districts For projects over $2,500,000. If school district board determines designbuild is in the district s best interest. (Cal. Educ. Code 17250.20) Lowest bid or best value (Cal. Educ. Code 17250.25) Cal. Educ. Code 17250.10 et. seq. (expires at end of 2013) Community Colleges For projects over $2,500,000. If community college district board determines design-build is in the district s best interest. (Cal. Educ. Code 81702) Lowest bid or best value (Cal. Educ. Code 81703) Cal. Educ. Code 81700 et. seq. (expires at end of 2013) Sonoma-Marin Area Rail Transit District Transit projects (not state highway construction or local street and road projects). (PCC 20209.13) Capital maintenance of capacity enhancing design-build rail project must exceed 25 million. (PCC 20209.7(f)) Lowest bid or best value Cal. Pub. Util. Code 105074; PCC 20209 et seq. (expires at end of 2014) -6-

The Design Build Process Program/Project Need Identified Obtain Legislative Authority for Project Selection of Master Architect/Engineer Determine Level of Performance Criteria/Concept Drawing Required Based on Program/Project Requirements Determine Scoring Criteria Develop Request for Qualifications (RFQ) Develop Request for Proposal (RFP) Based on RFQ Short List to Five / Interview to Three Most Qualified Issue RFP to Three Most Qualified Technical Review and Scoring of RFP s Interview Scoring and Selection of D/B Firm based on Scoring Criteria

Other Selection Criteria Subcontractors Part of the Design-Build Team Owner Specifies Trades (5 max) Design-Builder Selects Two More Trades Other Criteria Green and Sustainability Enhancements Recycling/Reuse of Construction ti Waste Small and Disabled Veteran Business Utilization Plans Innovative Design Solutions Local Labor and Business Utilization Enhancements Above Specified Criteria (LEED Gold vs. Silver) Other Criteria Deemed Essential

DGS Typical Design Build Team Program/Project Agency End User DGS/RESD Project Manager Construction Inspection & Contract Compliance DGS/RESD Environmental Services (CEQA) Master Architect/Engineer Team Criteria and Criteria Compliance Construction Manager Construction Administration Design Build Entity General Contractor Design Architect/Engineer Subcontractors