On October 3, 2019, Governor Gavin Newsom signed into law Assembly Bill 695 (“AB 695”). AB 695 extends the authorization for community college districts to use design-build by another ten years, until January 1, 2030. AB 695 also includes a skilled and trained workforce requirement for community college design-build projects, mirroring the existing requirement for K-12 design-build projects, effective July 1, 2020. Finally, AB 695 extends the authorization of community college districts to charge as direct costs for maintenance, repair, restoration, and refurbishment proportional to an entity's use of facilities for another five years, until January 1, 2025.
California law generally requires public agencies, including K-12 and community college districts, to competitively bid construction projects. The traditional competitive construction contracting method is referred to as hard-bid or design-bid-build. Under this method, a district contracts with separate entities for the design and construction of a project, leading to a sequential process consisting of design, construction documents, bidding, and construction. Design-bid-build has resulted in many successful public works projects over the years, but certain shortcomings inherent therein – including design errors, cost overruns, and other contract disputes – have led to the creation of alternative contracting methods. One of the alternative contracting methods meant to address these shortcomings is design-build, whereby a district retains a single entity to provide architectural, engineering, and construction services under a single contract. AB 695 addresses two salient issues regarding the application of design-build to community college districts:
- Authorization for community college districts to use design-build for another ten years, until January 1, 2030.
Existing law authorizes a community college district to enter into a design-build contract (if specified requirements are met) until January 1, 2020. AB 695 extends this authorization by ten years, until January 1, 2030.
- Inclusion of skilled and trained workforce requirement for community college design-build projects.
Existing law prohibits a design-build entity from being prequalified or shortlisted by a K-12 district unless the entity provides an enforceable commitment to the district that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the design-build project that falls within an apprenticeable occupation in the building and construction trades.
The skilled and trained workforce requirement for design-build projects applicable to K-12 districts is not currently applicable to community college districts. AB 695 imposes the skilled and trained workforce requirement on community college design-build projects as of July 1, 2020 (with a few exceptions involving project labor agreements), so that a design-build entity shall not be prequalified or shortlisted by a community college district unless the entity provides an enforceable commitment to the district that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the design-build project that falls within an apprenticeable occupation in the building and construction trades. AB 695 also authorizes a design-build entity to comply with these provisions with respect to contracts advertised for bid or awarded before July 1, 2020, in lieu of complying with the analogous previously applicable provisions, if the entity requests to do so and the community college district grants the request.
The Civic Center Act provides that there is a civic center at each and every public school facility and grounds within the state where citizens, school-community councils, and clubs, as well as senior, recreation, education, political, artistic, and other organizations, may meet. A K-12 district may grant the use of facilities and grounds upon certain terms and conditions deemed proper by its governing board and subject to specified limitations, requirements, and restrictions set forth in the Act.
Existing law contains provisions analogous to those of the Civic Center Act that are applicable to community college districts. For instance, existing law limits the amount the governing board of a community college district may charge nonprofit organizations and clubs and associations organized for general character building or welfare purposes to use college facilities or grounds for those purposes. For other purposes, the governing board of a community college district is authorized to charge an amount not to exceed its direct costs or not to exceed fair rental value, as those terms are defined by statute. Until January 1, 2020, the Act authorizes a community college district to charge as direct costs the share of costs for maintenance, repair, restoration, and refurbishment proportional to the entity's use of the college facilities or grounds, subject to limited exceptions. AB 695 extends the operation of this last authorization by five years, until January 1, 2025.
Parker & Covert has extensive experience handling construction matters, including design-build projects, as well as Civic Center Act matters. Should you have any follow-up questions or comments regarding the information presented in this Legal Update, please contact us by e-mail or by telephone at (714) 573-0900 (Southern California office) or (916) 245-8677 (Northern California office).