Infrastructure Law Blog

Infrastructure Law Blog

Insights on California and national public works construction issues

New public works requirements for contractors and public agencies pursuant to SB 854

Posted in Certified Payroll Records, Legislation, Prevailing Wages, Uncategorized

On June 20, 2014, the California legislature adopted SB 854, a “budget bill” that was heavily negotiated and tied to the approval of the state budget. Included among a variety of unrelated provisions in the lengthy bill were a number of additions and changes to the California Labor Code which will revamp the monitoring of public works projects throughout California through the Department of Industrial Relations (“DIR”).

SB 854 creates a new public works monitoring scheme for the DIR. While the DIR has been charged with establishing and enforcing prevailing wage requirements for number of years, the new scheme will place more responsibility on the DIR. This alert will summarize the new requirements for both public agencies and contractors.

New Requirements for Public Agencies

All California public agencies (state, counties, general law cities and special districts) are subject to five new requirements applicable to all public works projects they award, as follows:

1. PWC 100 Form. Public agencies must file a PWC 100 form with the DIR within 5 days of the award of every public works contract. This requirement already went into effect on July 1, 2014, although there are no penalties for noncompliance and coordination with other requirements won’t begin until next year. The PWC 100 form seeks mostly general information about each project, including awarding agency, date of award, type of work performed, amount of contract, funding sources, and contract information. PWC 100 forms can be submitted electronically to the DIR at: https://www.dir.ca.gov/pwc100ext/.

2. Notice Requirements. Public agencies must include notice of the following three new requirements applicable to public works contractors in both the agency’s call for bids and in the contract documents: a) no contactor or subcontractor may be listed on a bid proposal for a public works project unless they are registered with the DIR; b) no contractor or subcontractor may be awarded a public works contract unless registered with the DIR; and c) work performed on the project is subject to compliance monitoring and enforcement by the DIR.

3.Rejection of Bids Submitted by Unregistered Contractors. Beginning on March 1, 2015, public agencies will not be able to accept a bid from a contractor that is not registered with the DIR (registration requirements described in more detail below). Agencies will be able to confirm whether a contractor is registered with the DIR by checking the DIR’s webpage: https://efiling.dir.ca.gov/PWCR/Search.

4. Unregistered Subcontractors. Beginning on March 1, 2015, public agencies should also check to make sure that all subcontractors listed in a bid are registered with the DIR. Failure of a subcontractor to be registered is not grounds to find a bid non-responsive if it was due to “inadvertent error” and can be corrected pursuant to the requirements of Labor Code section 1725.5.

5. Job Site Notices. The awarding body must post job site notices in compliance with Title 8 California Code of Regulations Section 16451, or require the contractor to do so.

New Requirements for Contractors

Contractors working on a public works project for any type of public agency in California (state, counties, general law cities and special districts) are subject to the following requirements:

1. Annual Registration. All contractors and subcontractors must register with the DIR annually, and pay
a $300 fee, to be eligible to work on any public works projects in California. While this requirement
technically went in to effect on July 1, 2014, unregistered contractors and subcontractors may not be
listed in a bid after of March 1, 2015, and may not work on a public works project after of April 1,
2015.

2. Electronic Submission of Certified Payroll Records. Contractors will be obligated to submit all certified payroll records from public works projects directly to the DIR in electronic format. This requirement goes into effect for all new contracts awarded after April 1, 2015, and for work performed on any public works project after January 1, 2016 regardless of the date of award. A new certified payroll record form will be introduced by the DIR in January of 2015. Both public agencies and contractors will have access to these online records once submitted.

Conclusion

The new public works monitoring scheme established by SB 854 creates significant new responsibilities for
the DIR to collect and monitor all certified payroll records from every public works project in California. Due to the enormity of the task, it is likely that it will take the DIR time to work out all details, and that there will be some glitches with the process. Regardless, for both public agencies and contractors, the best approach is to comply with all new requirements as soon as possible to avoid any potential problems with the DIR.

New case confirms competitive bidding exception for lease lease-back projects award by school districts

Posted in Lease-leaseback

A court of appeal case published on September 18, 2014, Los Alamitos Unified School District v. Howard Contracting, Inc., confirmed the existence of an exception to competitive bidding for “lease-leaseback” agreements awarded by school districts pursuant to Education Code section 17406. Many involved in school district construction have held the view that “lease-leaseback” agreements were exempt from competitive bidding, despite the fact that these agreements result in new construction projects which are ultimately owned by a school district. This case confirms that view by applying a plain meaning interpretation of section 17406. Continue Reading

California legislature enacts several new laws concerning prevailing wage requirements

Posted in Prevailing Wages

The California legislature has enacted a number of laws that impact prevailing wage requirements, including provisions that affect charter cities, requirements to inform the Labor Commissioner of the completion of public works projects, exposure to liquidated damages for prevailing wage violations, and applying prevailing wage requirements to refinery construction projects. These laws went into effect on January 1, 2014, and are summarized below.

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Bay Bridge Construction: Don’t Put Your Party Dress On Just Yet . . .

Posted in Infrastructure News, Transportation

The Labor Day Bay Bridge celebration for the opening of the eastern span may be postponed. In the last few weeks, concern about issues with the Self Anchored Suspension Span (SAS) of the San Francisco-Oakland Bay Bridge, and specifically the cracked anchor bolts, has greatly increased from Governor Jerry Brown’s enlightened comment on May 7, 2013, that “shit happens.” Indeed, the problems with the bolts have heightened concern about public safety and a real possibility that the SAS will not be ready for use until 2014. After all, we are talking about the structural integrity of the state’s most traversed bridge, and at a cost of $6.4 billion, the largest public works project in California history.

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Demise of the “de minimis” exception to prevailing wage requirements?

Posted in Legislation, Prevailing Wages

The legislature is considering adopting a statute that would require workers on private projects to be paid prevailing wage if public subsidies exceed the lesser of $10,000 or 1% of the project cost.  This would effectively eliminate the de minimis exception and likely change the landscape for public subsidies on private projects.

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Amazing photographs of Transbay Terminal construction

Posted in Infrastructure News

Curbed San Francisco posted an article yesterday with a number of great photographs of the construction work in progress on the Transbay Terminal in San Francisco.  I have not seen images this detailed before, and they are fascinating.  Apparently, the web of steel crossbeams are temporary supports.  It is worth a look, click here.

Interesting article on “accelerated bridge construction”

Posted in Alternative Project Delivery Methods

This New York Times article describes a relatively new "accelerated bridge construction" technique using a self-propelled modular transport to lift a bridge into place.  The article focuses on the River Street Bridge in Boston, but the technique is being used increasingly around the country.  When done correctly, the bridge is lowered in place "like a lid fitting onto a box."  The primary benefit of this technique is the incredible increase in speed of project completion, shaving months or even yeras off of a project.   Click here to read the article.

New law caps retention on public works projects at 5%

Posted in Retention

On October 9, 2011, Governor Brown signed SB 293 in to law.  SB 293 addressed a variety of issues in public works related statutes, including prompt payment periods between a prime contractor and subcontractor, procedures for filing 20-day preliminary notices, and procedures for making claims on payment bonds.  Most noteworthy, however, is the adoption of a new Public Contract Code section 7201 which caps retention of progress payment for all public works projects at 5%.  

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Appellate court clears way for Presidio Parkway Project to move forward as a Public-Private Partnership

Posted in Public-private partnerships, Uncategorized

On August 8, 2011, the 1st District Court of Appeal broke new ground when it published a decision holding that Phase 2 of the Presidio Parkway project can move forward as a public-private partnership (P3). The Presidio Parkway Project is the first project to reach award under California’s new public-private partnership statute, Streets and Highways Code section 143. The project was challenged on three separate grounds by the Professional Engineers in California Government (PECG), an engineers’ union. The Court of Appeal affirmed the trial court’s ruling approving the California Department of Transportation’s (Caltrans) use of the new statute, and should encourage the consideration of P3s as a project delivery method in California.

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