Demystifying Design-build Projects—procurement Tips for Local Agencies

• Publication year: 2017
• Author: By Maggie W. Stern

Demystifying Design-Build Projects—Procurement Tips for Local Agencies

By Maggie W. Stern^*

INTRODUCTION

In 2014, the California Legislature passed SB 785, which authorizes the use of the design-build project delivery method for local agencies under Public Contract Code § 22160 et seq. SB 785 repealed many of the previous statutes authorizing local public agencies to use the design-build method to build approved projects. The design-build method is an advantageous, and often under-utilized, mechanism for agencies to complete public works projects.

In contrast to the traditional design-bid-build approach, the design-build delivery method streamlines project delivery as the project designer and contactor are under the same contract. Under the design-build method, the local agency contracts with a design-build firm to design and build the project. Often, the firm may be an entity formed solely for the delivery of a specific project. A traditional project delivery requires at least two procurement processes, including a request for qualifications (RFQ) / request for proposal (RFP) for the design services and a competitive bidding process for contractor selection. Design-build can speed project delivery by omitting the second procurement process, thus eliminating the time gap between plan development and construction commencement. The projects also typically result in fewer change orders, and when design changes are required, they typically occur faster. With the right project management, design-build projects can be very effective.

THE HISTORY OF THE DESIGN-BUILD METHOD IN CALIFORNIA AND SB 785

Counties, cities, and local agencies may only exercise those contracting powers that are specifically authorized by the State Legislature. Prior to 2014, the Legislature passed 17 individual bills authorizing various agencies the power to use the design-build method, typically on specific projects.¹ However, there was no general authorization for local agencies to use design-build delivery before 2014.

In 2014, SB 785, authored by Senator Lois Wolk, repealed the majority of existing design-build statutes and implemented uniform provisions for local agency design-build projects.² The bill consolidated existing design-build statutes and eliminated inconsistencies in statutory language to allow agencies to use a uniform and general application of the design-build method.³ The bill authorized the Department of General Services, the Department of Corrections and Rehabilitation, and various local agencies to use the design-build method for public works projects until January 1, 2025.⁴ In adopting the bill, the Legislature found that the design-build method would allow agencies to reduce project costs, expedite project completion, and provide design features not achievable through the traditional design-bid-build approach.⁵

PUBLIC CONTRACT CODE SECTION 22160 ET SEQ.

Local Agencies

Local agencies authorized to use the design-build method under Public Contract Code section 22160 et seq. include (1) cities and counties; (2) special districts that operate wastewater facilities, solid waste management facilities, water recycling facilities, and fire protection facilities; (3) transit districts including municipal operators, joint powers authorities, and county transportation commissions; and (4) the San Diego Association of Governments.⁶ School districts and community college districts are also authorized to use design-build delivery under the Education Code, which has different procurement requirements from those set forth in the Public Contract Code.⁷

Eligible Design-Build Projects

The types of design-build projects authorized under Section 22160 et seq. vary by agency. For example, cities and counties may use design-build for building construction and improvements, park and recreational facilities, and the construction of wastewater, solid waste, and water recycling facilities.⁸ Special districts may use design-build for the construction of wastewater treatment facilities, solid waste facilities, water recycling facilities, and fire protection facilities.⁹ Transit districts may use design-build for transit capital projects.¹⁰

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Local agencies may use design-build for public works projects in excess of one million dollars.¹¹ However, the million-dollar threshold does not apply to...