Infrastructure & Public Works Blog : San Francisco Infrastructure Lawyer & Attorney : Hanson Bridgett Law Firm : Public Works Construction : Sacramento, Marin County, Northern California

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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I just came across this short video regarding Disney's use of Building Information Modeling on the construction of their new Fantasyland.  It demonstrates the benefits of BIM in a little over 3 minutes.  Watch it here.

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On March 24, 2011 the Ninth Circuit Court of Appeals made it more difficult to bring a complaint claiming a violation of the Federal False Claims Act (FCA). The Court held that FCA complaints must not only “state with particularity the circumstances constituting fraud or mistake” (under Federal Rule of Civil Procedure 9(b)), but must “also plead plausible allegations” (under Federal Rule of Civil Procedure 8(a). In Mary Angela Cafasso v. General Dynamics C4 Systems, Inc. (March 24, 2011) 11 C.D.O.S. 3557 the Court upheld the dismissal of the plaintiffs’ False Claims Act complaint before trial because, although the “complaint alleges unsavory conduct ... unsavory conduct is not, without more, actionable under the [False Claims Act].”

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The use of design-build in the public sector appears to be growing.  As more public agencies achieve positive results with this project delivery method, the legislature appears to be more comfortable with expanding the statutory authority.  My colleague, Lisa Dal Gallo, and I recently co-authored an article about this trend as well as the many benefits of design-build.  Click here for a copy of the article.

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The Professional Engineers in California Government, the union representing state engineers, has filed suit to stop the project to replace Doyle Drive, the 1.6 mile highway that connects the Golden Gate Bridge with the City of San Francisco. The lawsuit alleges that the project impermissibly uses a Private Public Partnership (P3) contrary to the State law authorizing the project. Instead, the engineers union asserts that the project should be awarded to the lowest bidder pursuant to a traditional design-bid-build process, with the design component being performed by State engineers.  Under the current arrangement, Hochtief Concessions and Meridiam Infrastructure will design, construct, operate and maintain the road. 
 

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I recently received a link to a very informative blog post on the Blogineering blog which includes a compilation of 50 separate articles and videos addressing the current state of infrastructure in the United States.   It paints a disconcerting portrait of our considerable infrastructure needs over the near term, while also linking to articles which offer potential solutions.  Needless to say, it is an informative resource.  You can find the blog post here.

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Governor Schwarzenegger has now signed SB 972, a new law that clarifies when design professionals will owe a "duty to defend" to public agencies when lawsuits are filed that implicate the services provided by such professionals. The new statute, which will be effective on January 1, 2011, was adopted in response to two court decisions (Crawford v. Weather Shield Mfg., Inc. (2007) 44 Cal.4th 541 and UDC v. CH2M Hill (2010) 181 Cal.App.4th 10), which held that parties could be required to bear the costs of defense under common contractual indemnity provisions, even if they are not ultimately found to have been negligent.
 

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A court of appeal case published on August 31, Great West Contractors, Inc. v. Irvine Unified School District, refined the rules for public agencies evaluating bids submitted for a low-bid contract by clarifying the distinction between bidder responsiveness and bidder responsibility.  In short, bidder responsiveness can only be determined on the face of the bid, and the rejection of a bid based on information obtained from an investigation external to the bid must be evaluated as an issue of bidder responsibility.  The court also made several observations about the apparent favoritism of the School District in attempting to award the contract to the third low bidder.   Please read on for a discussion of the case.   

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An appellate court case decided in April of 2009 held that public works projects awarded by charter cities, and financed solely from city revenues, were not subject to California prevailing wage requirements under the Prevailing Wage Law. (See State Building and Construction Trades Council of California v. City of Vista (2009) 173 Cal.App.4th 567.)  On August 19, 2009, the California Supreme Court granted a petition to review the case, and de-published the opinion of the appellate court.  According to the Supreme Court website the case has been “fully briefed,” although oral argument has not yet occurred.  Presumably, the Supreme Court will issue its opinion by the end of the year.

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On October 11, 2009, Governor Schwarzenegger signed into law AB 729 (Evans) extending the sunset date on the design-build statute applicable to public transit operators to January 1, 2015.  The full text of the bill can be reviewed here.  This marks the second extension of the sunset date.  The transit operator design-build statute was adopted in 2000 pursuant to AB 958 (Scott), and included a sunset date of January 1, 2005.  In 2006, pursuant to AB 372 (Nation), the sunset date was extended to January 1, 2011.  It appears that the California Legislature is gaining comfort with design-build in the public sector.    

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A California appellate case published in late February expands the applicability of the California False Claims Act to contractors which submit applications for payment while failing to comply with material contract terms. (SF Unified School District ex rel. Contreras v. Laidlaw Transit, Inc. (February 26, 2010) Cal. App. 2010 LEXIS 249.)  The Laidlaw case provides powerful support to public entities in their efforts to avoid fraud on public works projects, as described in more detail below.

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On October 11, 2009, Governor Schwarzenegger signed into law AB 729 (Evans), revising the design-build statute applicable to transit operators.  AB 729 extends the authority of public transit operators to use design-build contracting from January 1, 2011 to January 1, 2015.  We interpret this to mean that transit operators must award, but not complete, a design-build contract prior to this date.  

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A controversial new state law introduced by Sen. Elaine Alquist and approved by the Governor in October 2009 will make it easier for the City of Santa Clara to facilitate construction of a new football stadium for the 49ers.  Senate Bill 43 creates a new joint powers authority, the Santa Clara Stadium Authority, which will be exempt from the City's competitive bidding rules and is authorized to award a design-build contract for the new stadium.   

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On October 22 and 23, 2009, the Harvard Graduate School of Business and Graduate School of Design jointly sponsored a symposium on Integrated Project Delivery (IPD). IPD is a project delivery method where all of the key participants (owner, contractor, designer and key subcontractors) are engaged at project commencement to collaboratively design, develop and execute the project. Participants’ compensation is based on overall project outcome, measured against an agreed target cost, and liability within the IPD group is waived or greatly reduced. IPD has produced exceptional results in healthcare, and more recently, in a range of commercial and institutional projects.

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