Governor Schwarzenegger recently signed three bills which will expand the ability of cities, transit operators and the Sonoma Valley Health Care District to award projects on a design-build basis.  Each of these agencies is generally constrained by public bidding requirements to award construction contracts separately from contracts for professional design services.  These agencies will now have a greater ability to take advantage of a useful project delivery alternative for some projects.  The three bills are summarized below:   

  • AB 642, Cities:   This bill will amend Public Contract Code section 20175.2 to expand the scope of existing design-build authority for cities in Solano and Yolo counties to all cities.  As of January 1, 2009, all cities will be able to award construction contracts on a design-build basis for projects that are $1 million or less. 

In addition, AB 642 also created a new Public Contract Code section 20193, which authorizes a pilot program for any “qualified entity” to award a project for a regional or local wastewater treatment facility, solid waste facility or water recycling facility on a design-build basis. The pilot program would only apply to 20 projects, each of which must exceed $2.5 million in value. Qualified entities include cities, counties, cities and counties and special districts. 

  • AB 387, Transit Operators:  This bill will amend Public Contract Code section 20209.7 to expand the scope of existing design-build authority for transit operators.  Effective January 1, 2009, transit operators may now award contracts for the acquisition and installation of technology applications or surveillance equipment designed to enhance safety, disaster preparedness, and homeland security efforts on a design-build basis.  Moreover, there is no cost threshold for these contracts, and transit operators may award them to the lowest responsible bidder or by using the best value method.
  • SB 1699, Sonoma County Health Care District:  This bill will add a new section 32132.5 to the Health and Safety Code which authorizes the board of directors for the Sonoma County Health Care District to award contracts on a design-build basis.  Section 32132.5 incorporates the existing design-build authority for counties set forth in Public Contract Code section 20133, which established a cost threshold of $2.5 million.  Unfortunately, although efforts were made to have this legislation apply to all health care districts, the bill was ultimately truncated to apply only to Sonoma County Health Care District. 

Although limited in their applicability, the adoption of these bills is certainly a welcome step toward allowing public agencies greater flexibility in awarding construction projects.