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SB 706 UPDATE
Note: At the time the text was published the text the Bill was on the Governor’s desk. It was passed into law on 10/8/2023.
Progressive Design-Build Legislative Authority for California Agencies
On Sept. 1, the California State Senate voted unanimously in favor of Senate Bill 706 (SB 706), which expands authority for the use of progressive design-build (PDB) by state and local agencies. Today, that bill rests with California Governor Gavin Newsom, awaiting his signature.
Sponsored by the DBIA-Western Pacific Region (DBIA-WPR), SB 706 was introduced in February 2023 by Senator Anna Caballero, who co-authored the bill with Senators Roger Niello and Susan Rubio and Assemblymember Eduardo Garcia. DBIA-WPR immediate past president Brandon Dekker (Principal-Office Practice Leader, CannonDesign) testified in support of the bill at an Assembly meeting in June alongside Senator Caballero and Najee Zarif, Deputy Director of Engineering at San Joaquin County Department of Public Works.
The bill received unanimous approval from the California Senate Local Governance & Finance Committee as well as the State Senate and State Assembly’s Local Government Committee following that testimony. Later, in August, SB 706 passed through the Assembly –– again with unanimous support –– before clearing the Senate and making its way to the Governor at the start of September.
DBIA-WPR said the “game-changing legislation” aims to grant all cities, counties and special districts in California the authority to use progressive design-build procurement for up to 10 public works projects exceeding $5,000,000 each. They added that SB 706 “could significantly transform the procurement landscape for municipalities across the state,” as before SB 706, PDB was only accessible to select agencies in California, limiting the impact it could have on public infrastructure.
The impetus for SB 706 was rooted in a nebulous interpretation of existing legislation and a growth in the number of successful PDB projects in California, specifically in the State University System and at the San Francisco International Airport.
Although some public and agency Owners interpreted the law as allowing PDB procurement, others argued that while the language did not expressly prohibit its use, it was not strong enough to support its use. Certain local agencies –– including charter cities and community colleges –– enjoyed specific language allowing for flexibility in project delivery, but that language was just ambiguous enough for others to tread cautiously. For instance, California’s Department of General Services (DGS) has shown interest in the approach. However, they had adopted a narrow interpretation of the legislative language and determined they would need more specific guidance prior to releasing projects under PDB procurement. In 2021, DGS initiated legislation AB 137 –– known as the “trailer bill” –– that allowed three of DGS’s projects to be released as PDB with some additional stipulations for reporting.
DBIA-WPR supported the “trailer bill,” and in 2022, they proposed sponsoring broad-based legislation governing PDB in the region. The WPR Board worked with Platinum Advisors to secure Senators Caballero, Niello and Rubio, as well as Assemblymember Garcia to author the bill. Senator Caballero introduced the bill in February 2023 as an extension of DGS’s successful efforts for AB 137.
The bill moved through the Senate Governance & Finance Committee with June’s in-person testimony from Dekker and the other supporters. There were some language changes as the bill passed through the Senate and House, including adding a 2030 sunset clause, changing the number of projects each agency would be allowed to issue and increasing the dollar threshold of eligible projects. Finally, SB 706 was enrolled and presented to Governor Newsom earlier this month.
Like many states, California faces the urgent need for modern facilities that can effectively serve its growing population. However, funding constraints often impede progress, making innovative procurement approaches vital to overcoming challenges related to cost increases, change orders and delays. With SB 706, California’s public works projects will unlock a new era of collaboration, innovation and superior outcomes. By empowering agencies with progressive design-build capabilities, the state will be better equipped to meet the evolving needs of its constituents efficiently and effectively.
Progressive design-build offers a fresh perspective on procurement, design and delivery processes. Agencies can foster greater collaboration and ensure cost and schedule adherence by selecting design-build teams based on qualifications rather than requiring an extensive design package during procurement. Throughout the design/pre-construction phase, the public agency retains control over critical decisions regarding scope, schedule and cost, creating an environment of transparency and shared vision.
PDB supports a collaborative project approach between partners, allowing design and constructability to develop until the guaranteed maximum price is agreed upon. This process requires cost transparency while the project is collectively shaped to the Owner’s unique criteria. PDB supports a diverse team, compensating project partners for work performed and allowing an array of partners with the resources to come to the table. Like any other procurement method, PDB carries its own uncertainty, requiring faith that the selected team can shape the Owner’s criteria into acceptable design, schedule and cost parameters. In practice, however, PDB has been shown to support technically complex projects with bold sustainable design objectives and tends to be the procurement method of choice for Owners invested in participating in the outcome.
Advancing SB 706 in California required dedication from DBIA-WPR, including being responsive to its membership, investing in the right advisory firm, building significant state and local support and entrusting the Board Legislative Committee to lead the way. With the passage of SB 706, DBIA-WPR continues a legacy of commitment to design-build, moving beyond a proving ground for progressive design-build to a hotbed of growth for the procurement method.
“The Board initiated SB706 to support the use of the fundamentally fair and collaborative PBD process,” said DBIA-WPR president Marianne O’Brien, FAIA, LEED AP, DBIA (Principal, SmithGroup). “We weren’t certain if we would succeed in the effort but hoped that our collective of voices would resonate at the legislative level –– and indeed it has.”
April 2023 Update
Last week the California Senate Governance & Finance Committee had a hearing at the State Capitol on Senate Bill 706 sponsored by @Design Build Institute of America - Western Pacific Region, League of California Cities and California State Association of Counties®. SB 706 authorizes all cities, counties or special districts to use the progressive design-build process to complete public works projects more quickly and at a lower cost, allowing public dollars to provide greater benefits to the public without sacrificing important protections the public expects.. DBIA-WPR President Marianne O'Brien, FAIA LEED AP and DBIA-WPR President Emeriti, J. Brandon Dekker, M.S., DBIA both testified in front of the Committee. With their efforts, combined with others tagged below, SB 706 received a unanimous 8-0 yes vote to move onto the Appropriations Committee next. Follow us to stay informed on this important piece of legislation.
SB706 Needs YOUR support!
Earlier this year the DBIA Board or Directors authorized sponsoring legislation to allow Counties, Cities and special districts to utilize PDB.
Our efforts in Sacramento resulted in the Chair of Governance and Finance agreeing to take on our charge. Chair Caballero introduced SB 706 and our efforts to cast a wide net for support brought the California State Association of Counties, the California League of Cities and the County of San Diego on as Co-Sponsors already. We are off to a powerful start!
Our momentum is strong, but with a quick hearing set on March 22nd we are asking for your support.
Please use the attached sample letter to craft a letter of support ASAP. Letters are due by March 14th so don’t delay.
In order for us to make sure your letter makes it into the record simply e-mail to Senator Caballero and cc: email@example.com
Again we need your action right away.
DBIA-WPR appreciates your support in advance!
Click here to view and download sample letter (pdf).
Click here to view and download sample letter (Word file).
Update: September, 2022
AB 902 (O'Donnell D) School facilities: alternative design-build contracts.
Last Amend: 6/29/2022
Status: 8/12/2022-Failed Deadline pursuant to Rule 61(b)(15). (Last location was APPR. SUSPENSE FILE on 8/8/2022)
Summary: Would authorize, until January 1, 2029, a school district, with the approval of its governing board, to procure alternative design-build contracts for public works projects in excess of $5,000,000, awarding the contract to either the low bid or the best value, as provided. The bill would define “alternative design-build” as a project delivery process in which both the design and construction of a project are procured from a single design-build entity based on its proposed design cost, general conditions, overhead, and profit as a component of the project price. The bill would require specified information to be verified under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program.
AB 1845 (Calderon D) Metropolitan Water District of Southern California: alternative project delivery methods.
Last Amend: 8/15/2022
Status: 8/31/2022-Enrolled and presented to the Governor at 4 p.m.
Location: 8/24/2022-A. ENROLLED
Summary: Would authorize the Metropolitan Water District of Southern California to use the design-build procurement process for certain regional recycled water projects or other water infrastructure projects. The bill would define “design-build” to mean a project delivery process in which both the design and construction of a project are procured from a single entity. The bill would require the district to use a specified design-build procedure to assign contracts for the design and construction of a project, as defined.
AB 1932 (Daly D) Public contracts: construction manager at-risk construction contracts.
Last Amend: 6/2/2022
Status: 8/30/2022-Enrolled and presented to the Governor at 4 p.m.
Location: 8/30/2022-A. ENROLLED
Summary: Current law authorizes, until January 1, 2023, a county, with approval of the board of supervisors, or a public entity, of which the members of the county board of supervisors make up the members of the governing body of that public entity, with the approval of its governing body, to utilize construction manager at-risk construction contracts for the erection, construction, alteration, repair, or improvement of any infrastructure, owned or leased by the county, subject to certain requirements, including that the method may only be used for projects that are in excess of $1,000,000. This bill would extend those provisions until January 1, 2029, and would also make a nonsubstantive change.
AB 2789 (Mullin D) Design-build projects: local agencies.
Last Amend: 4/18/2022
Status: 8/29/2022-Approved by the Governor. Chaptered by Secretary of State - Chapter 214, Statutes of 2022.
Location: 8/29/2022-A. CHAPTERED
Summary: Current law establishes procedures for the formation of regional park districts and regional open-space districts or authorities and prescribes the powers, functions, and duties of those districts or authorities, including competitive bidding requirements relating to the construction of facilities or other buildings.This bill would repeal the January 1, 2023, sunset date, thereby indefinitely extending the authority of the Midpeninsula Regional Open Space District and the Santa Clara Valley Open-Space Authority to use the design-build process. The bill would modify and expand the purposes for which the process is authorized to include construction, restoration, and improvement of buildings and facilities, the construction, restoration, and improvement of public access and recreation facilities, and prescribed nature-based infrastructure projects within the entity. The bill would similarly authorize the East Bay Regional Park District to use the design-build process.
SB 991 (Newman D) Public contracts: progressive design-build: local agencies.
Last Amend: 8/11/2022
Status: 9/2/2022-Approved by the Governor. Chaptered by Secretary of State. Chapter 243, Statutes of 2022.
Location: 9/2/2022-S. CHAPTERED
Summary: Current law authorizes the Director of General Services to use the progressive design-build procurement process for the construction of up to 3 capital outlay projects, as jointly determined by the Department of General Services and the Department of Finance, and prescribes that process. Current law defines “progressive design-build” as a project delivery process in which both the design and construction of a project are procured from a single entity that is selected through a qualifications-based selection at the earliest feasible stage of the project. Current law, pursuant to the process, after selection of a design-build entity, authorizes the Department of General Services to contract for design and preconstruction services sufficient to establish a guaranteed maximum price, as defined. Current law authorizes the department, upon agreement on a guaranteed maximum price, to amend the contract in its sole discretion, as specified. Current law requires specified information to be verified under penalty of perjury. This bill, until January 1, 2029, would authorize local agencies, defined as any city, county, city and county, or special district authorized by law to provide for the production, storage, supply, treatment, or distribution of any water from any source, to use the progressive design-build process for up to 15 public works projects in excess of $5,000,000 for each project, similar to the progressive design-build process authorized for use by the Director of General Services.
SB 1354 (Jones R) Design-build contracting: cities, counties, and cities and counties: compliance with the federal Americans with Disabilities Act of 1990
Last Amend: 8/24/2022
Status: 9/9/2022-Enrolled and presented to the Governor at 3 p.m.
Location: 9/9/2022-S. ENROLLED
Summary: Current law, until January 1, 2025, authorizes local agencies, as defined, to use the design-build procurement process for specified public works with prescribed cost thresholds. Current law requires specified information submitted by a design-build entity in the design-build procurement process to be certified under penalty of perjury. This bill would authorize a city, county, or city and county to use the design-build contracting process to award contracts for constructing projects that are necessary in order to comply with construction-related accessibility standards, as specified.
Update: September, 2021
Prepared by: Platinum Advisors
DBIA Bill Report
(Gallagher R) Design-build contracting: Town of Paradise
Status: 8/26/2021-Read third time. Passed. Ordered to the Assembly. (Ayes 36. Noes 0.). In Assembly. Ordered to Engrossing and Enrolling.
Location: 8/26/2021-A. ENROLLMENT
Summary: Would authorize the Paradise Irrigation District to use the design-build contracting process to award a contract for a water conveyance pipeline from the Town of Paradise to the City of Chico. The bill would authorize the Town of Paradise to use the design-build contracting process to provide for the provision of sewer treatment to the Town of Paradise, including for infrastructure connecting the Town of Paradise to an existing treatment facility.
(Committee on Budget) State government
Status: 7/16/2021-Approved by the Governor. Chaptered by Secretary of State - Chapter 77, Statutes of 2021.
Location: 7/16/2021-A. CHAPTERED
Summary: This bill authorizes the Director of General Services to use the progressive design-build procurement process for the construction of up to 3 public works projects, as jointly determined by the Department of General Services (DGS) and the Department of Finance and would prescribe that process. For more details on the bill go to Section 13 in this link.
(O'Donnell D) School facilities: design-build contracts.
Status: 5/7/2021-Failed Deadline pursuant to Rule 61(a)(3). (Last location was ED. on 2/25/2021)(May be acted upon Jan 2021).
Location: 5/7/2021-A. 2 YEAR.
Summary: Until January 1, 2025, existing law authorizes a school district, with the approval of the governing board of the school district, to procure design-build contracts for public works projects in excess of $1,000,000, awarding the contract to either the low bid or the best value, as provided. For those projects using best value as a selection method, existing law requires competitive proposals to be evaluated by using only the criteria and selection procedures specifically identified in the request for proposals, and requires the school district, as it deems appropriate, to weigh certain minimum factors, including price of the project. This bill would authorize a school district, as an alternative to price of the project, to instead weigh as a factor the proposing design-build entity’s design cost, general conditions, overhead, and profit as a component of the project price.
(Daly D) Transportation: design-build: highways.
Status: 8/30/2021-Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0.).
Location: 8/30/2021-A. DESK.
Summary: Current law authorizes regional transportation agencies, as defined, to utilize design-build procurement for projects on or adjacent to the state highway system. Current law also authorizes those regional transportation agencies to utilize design-build procurement for projects on expressways that are not on the state highway system, as specified. Current law repeals these provisions on January 1, 2024, or one year from the date that the Department of Transportation posts on its internet website that the provisions described below related to construction inspection services for these projects have been held by a court to be invalid. This bill would delete the January 1, 2024, repeal date, thus extending the above provisions indefinitely.
(Ting D) Budget Act of 2021.
Status: 1/28/2021-Referred to Com. on BUDGET.
Location: 1/28/2021-A. BUDGET.
Summary: This bill would make appropriations for the support of state government for the 2021–22 fiscal year.