(a) Notwithstanding any other law, the City of San Diego, with approval of the city council, may utilize construction manager at-risk construction contracts for the erection, construction, alteration, repair, or improvement of any building owned or leased by the city. A construction manager at-risk construction contract may be used only for projects in the city in excess of twenty five million dollars ($25,000,000) and may be awarded using either the lowest responsible bidder or best value method to a construction manager at-risk entity that possesses or that obtains sufficient bonding to cover the contract amount for construction services and risk and liability insurance as may be required by the city. Any payment or performance bond written for the purposes of this section shall be written using a bond form developed by the city.
(b) For purposes of this section, the following definitions apply:
(1) “Best value” means a value determined by objective criteria related to the experience of the entity and project personnel, project plan, financial strength of the entity, safety record of the entity, and price.
(2) “Construction manager at-risk contract” means one or a successive combination of competitively procured contracts entered into by the City of San Diego with an individual, partnership, joint venture, corporation, or other recognized legal entity, that is appropriately licensed in this state, including holding a contractor’s license issued by the Contractors’ State License Board, and that guarantees the cost of a project and furnishes construction management services, including, but not limited to, preparation and coordination of bid packages, scheduling, cost control, value engineering, evaluation, preconstruction services, and construction administration.
(c) (1) A construction manager at-risk entity shall not be prequalified or shortlisted or awarded a contract unless the entity provides an enforceable commitment to the City of San Diego that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades, in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1.
(2) This subdivision shall not apply if any of the following conditions are met:
(A) The City of San Diego has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or contract to use a skilled and trained workforce, and the entity agrees to be bound by that project labor agreement.
(B) The project or contract is being performed under the extension or renewal of a project labor agreement that was entered into by the City of San Diego before January 1, 2018.
(C) The entity has entered into a project labor agreement that will bind the entity and all its subcontractors at every tier performing the project or contract to use a skilled and trained workforce.
(3) For purposes of this subdivision, “project labor agreement” has the same meaning as in paragraph (1) of subdivision (b) of Section 2500.
(d) Subcontractors that were not listed by a construction manager at-risk entity as partners, general partners, or association members in a partnership, limited partnership, or association in the entity’s construction manager at-risk bid submission shall be awarded by the construction manager at-risk entity in accordance with the process set forth by the City of San Diego. All subcontractors bidding on contracts pursuant to this section shall be afforded the protections contained in Chapter 4 (commencing with Section 4100) of Part 1. The construction manager at-risk entity shall do both of the following:
(1) Provide public notice of the availability of work to be subcontracted in accordance with the publication requirements applicable to the competitive bidding process of the City of San Diego.
(2) Provide a fixed date and time on which the subcontracted work will be awarded in accordance with the procedure established pursuant to this section.
(e) If the City of San Diego elects to proceed under this section and uses a construction manager at-risk contract for a building project, it shall make a copy of the contract available for public inspection on its Internet Web site and notify the appropriate policy committees of the Legislature with instructions on finding and accessing the stored contract.
(f) (1) If the City of San Diego elects to award a project pursuant to this section, retention proceeds withheld by the city from the construction manager at-risk entity shall not exceed 5 percent if a performance and payment bond issued by an admitted surety insurer is required in the solicitation of bids.
(2) In a contract between the construction manager at-risk entity and any subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the City of San Diego and the construction manager at-risk entity. If the construction manager at-risk entity provides written notice to any subcontractor that is not a member of the construction manager at-risk entity, before or at the time the bid is requested, that a bond may be required, and the subcontractor subsequently is unable or refuses to furnish a bond to the construction manager at-risk entity, then the construction manager at-risk entity may withhold retention proceeds in excess of the percentage specified in the contract between the city and the construction manager at-risk entity from any payment made by the construction manager at-risk entity to the subcontractor.
(g) Notwithstanding any other law, if the City of San Diego elects to award a project pursuant to this section, the contract between the city and construction manager at-risk entity shall be subject to the provisions of subdivision (b) of Section 2782 of the Civil Code. Any contract between the construction manager at-risk entity and a contractor or subcontractor shall be subject to Section 2782.05 of the Civil Code.
(h) The City of San Diego may award separate contracts to the construction manager at-risk entity for preconstruction services and construction services, or award a single contract for preconstruction services and construction services with an intervening city approval of the guaranteed maximum price.
(i) This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
(Added by Stats. 2017, Ch. 821, Sec. 2. (AB 851) Effective January 1, 2018. Repealed as of January 1, 2023, by its own provisions.)
Last modified: October 25, 2018