On September 14, 2006, the Governor signed AB 372 expanding design-build authority for transit operators by revising Public Contract Code sections 20209.5, 20209.7 and 20209.14. Transit operators interested in utilizing the design-build authority for future projects will welcome the useful changes, which include the following:

• the dollar threshold for “capital maintenance or capacity-enhancing rail projects” was reduced from $50,000,000 to $25,000,000;
• the dollar threshold for all other projects was reduced from $10,000,000 to $2,500,000 (this matches the design-build authority for counties under Public Contract Code section 20133);
• design-build projects may be awarded to the “lowest responsible bidder” or on the basis of “best value,” at the transit operator’s discretion;
• the statutory authority was extended from January 1, 2007 to January 1, 2011;
• the definition of “transit operator” was expanded to include a “consolidated agency”;
• the bill clarified that the requirement to implement a Labor Compliance Program applies only to the design-build contract itself; and
• transit operators must now prepare specific documents prior embarking on a design-build project.

Click here to see the full text of the bill. Transit operators and design-build entities should enjoy the expanded authority to enter into design-build contracts, and this alternative project delivery method may begin to live up to its promise in the public sector.