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HomeMy WebLinkAboutItem 2c: Introduce Ordinance No. 2305 concerning design-build contracts.MEMORANDUM Office of the City Attorney DATE: November 20, 2012 TO: Honorable Mayor and City Council FROM: Stephen P. Deitsch, City Attorney SUBJECT: ORDINANCE NO. 2305 AMENDING ARTICLE I OF THE ARCADIA MUNICIPAL CODE BY ADDING CHAPTERS 12 AND 13 CONCERNING DESIGN -BUILD CONTRACTS, AND EXEMPTION FROM CALIFORNIA LABOR CODE REQUIREMENTS APPLICABLE TO PUBLIC WORKS Recommended Action: Introduce BACKGROUND Pursuant to the City Charter and Arcadia Municipal Code, the California Public Contract Code does not apply to any public works, public project or public works contract of the City of Arcadia, unless expressly made applicable by the City Charter, ordinance, resolution, regulation, or as expressly provided in a public works contract entered into by the City. (Arcadia Muni. Code, Ch. 11, Sec. 1930.) This exemption would include the provisions of Public Contract Code Section 20175.2 which provides authority for general law cities to enter into design -build contracts. The purpose of Ordinance No. 2305 would be to tap into the City's powers as a charter city and to provide flexibility on alternative project delivery methods. In a recent discussion, the California Supreme Court reaffirmed that chartered cities are not required to pay prevailing wages for public works projects unless they are funded with federal or state money. The purpose of Ordinance No. 2305 would be to expressly confirm the Supreme Court's holding with respect to the City of Arcadia. DISCUSSION In order to provide the City with express authority for entering into design -build contracts when the City deems it in its best interest, the City is required to amend its Municipal Code. Ordinance No. 2305 would provide this amendment and allow the City future flexibility by providing express authority permitting the City to award design -build projects. Honorable Mayor and City Council November 20, 2012 Page 2 of 2 Specifically, and notwithstanding Section 1930 of the City of Arcadia Municipal Code, adoption of Ordinance No. 2305 would add to Article I a Chapter 12 to the Arcadia Municipal Code, adopting a policy, procedure and guidelines for the award of design - build contracts using a comparable process to that specified for general law cities in Section 20175.2 of the Public Contract Code. Chapter 12 sets forth the process for the award, use and evaluation of design -build contracts by the City of Arcadia which would include a competitive selection process using a Request for Proposal process. Pursuant to the new Chapter, the City could award a design -build contract to the proposal deemed to be the best value to the City based on the evaluation criteria set forth in the Request for Proposals. Finally, a charter city's right to exempt to exempt itself from the Labor Code provisions applicable to locally funded public works projects was upheld by the California Supreme Court in State Building & Construction Trades Council of Cal., AFL -CIO v. City of Vista (2012) 54 CalAth 547. Ordinance No. 2305 expressly provides that the City is exempt from requirements otherwise set forth in the California Labor Code concerning payment of prevailing wages for public works projects. However, prevailing wages would be required if state or federal funds are used for specific public works projects. FISCAL IMPACT There is no fiscal impact associated with the introduction or adoption of this Ordinance. It is anticipated that savings could be achieved for projects that utilize design -build contracts. In addition, non - specific contracts tend to be 10 -20% less costly than contracts mandating prevailing wages. RECOMMENDATION It is recommended that the City Council introduce Ordinance No. 2305 amending Article of the Arcadia Municipal Code by adding Chapters 12 and 13 concerning Design -Build Contracts, and exemption from California Labor Code requirements applicable to Public Works. Approved: o City Manager Attachment: Ordinance No. 2305 ORDINANCE NO. 2305 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, AMENDING ARTICLE I OF THE ARCADIA MUNICIPAL CODE BY ADDING CHAPTERS 12 AND 13 CONCERNING DESIGN - BUILD CONTRACTS, AND EXEMPTION FROM CALIFORNIA LABOR CODE REQUIREMENTS APPLICABLE TO PUBLIC WORKS WHEREAS, the Charter of the City of Arcadia authorizes the City to regulate municipal affairs as it may deem necessary; and WHEREAS, Section 1100.7 of the Public Contract Code permits a charter city by charter or ordinance to establish an exemption from the requirements of the Public Contract Code; and WHEREAS, the City Charter and Chapter 11, Section 1930 of the Arcadia Municipal Code generally exempt the City from all requirements of the Public Contract Code applicable to general law cities, including the authority to award design -build contracts pursuant to Public Contract Code Section 20175.2; and WHEREAS, notwithstanding Chapter 11, Section 1930 of the Arcadia Municipal Code, the City now desires to amend Chapter 11 of the Municipal Code to add provisions to expressly permit the City to award design -build contracts for its public works projects; and WHEREAS, the power to establish standards, procedures, rules or regulations to regulate all aspects affecting the compensation, award and performance of any public works contract, including, but not limited to, the requirements under the California Labor Code regarding the compensation rates to be paid for the performance of such work, the employment of apprentices, and the hours of labor performed on such work is a municipal affair; and I WHEREAS, a charter city's right to exempt itself from the Labor Code provisions generally applicable to locally funded public works projects was upheld by the California Supreme Court in State Building & Construction Trades Council of Cal., AFL -CIO v. City of Vista (2012) 54 CalAth 547; and WHEREAS, the City desires to achieve greater financial flexibility by expressly exempting all locally funded City public works projects from the Labor Code provisions applicable to public works projects; and WHEREAS, all other legal prerequisites to the adoption of this Ordinance have occurred. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES ORDAIN AS FOLLOWS: SECTION 1. The Arcadia Municipal Code is hereby amended by adding Chapter 12 to Article I to read in its entirety as follows: "CHAPTER 12 DESIGN -BUILD CONTRACTS 1940. PURPOSE AND INTENT. The purpose of this Chapter is to provide definitions, procedures, and guidelines for the award, use, and evaluation of Design -Build Contracts by the City of Arcadia. 1941. DEFINITIONS For the purposes of this Chapter, the following definitions apply: (a) "Best Value" means a value determined by criteria, including but not limited to price, features, functions, and life -cycle costs. (b) "Design- Build" means a public works procurement method in which both the design and construction of a project are procured from a single entity pursuant to a single contract. 2 (c) "Design -Build Contract" means a single contract between the City and a Design -Build Entity to furnish the architecture, engineering, and related services as required for a given public works project, and to furnish the labor, materials and other construction services for the same project. A Design -Build Contract may be awarded conditioned upon subsequent refinements in scope and price during the development of the design, and may permit the City to make changes in the scope of the public works project without invalidating the Design -Build Contract. (d) "Design -Build Entity" means the entity (whether natural person, partnership, joint venture, corporation, business association, or other legal entity) that proposes to enter into a contract with the City to design and construct any public works project under the procedures set forth in this Chapter. (e) "Performance Criteria" means the requirements for the public works project, including as appropriate, capacity, durability, production standards, ingress and egress requirements, or other criteria for the intended use of the public works project, expressed in conceptual documents, performance- oriented preliminary drawings, outline specifications and other documents provided to Design -Build Entity by the Request For Proposals establishing the project's basic elements and scale, and their relationship to the work site suitable to allow the Design - Build Entity to make a Proposal. (f) "Proposal" means an offer to enter into a Design -Build Contract, as further defined in this Chapter. (g) "Request For Proposals" means the document or publication whereby the City Manager or applicable City Department Head with assistance from staff as necessary, solicits proposals for a Design -Build Contract. 1942. DESIGN - BUILDING PROCUREMENT PROCEDURES. For purposes of this Chapter only, the City Manager or applicable City Department Head with the assistance of staff as necessary, shall prepare and issue a Request For Proposals for the competitive selection /award of any Design -Build Contract. The Request for Proposals shall set forth the scope of the project and may include, without limitation, the following elements: (a) Establishment of a prequalification process (optional), pursuant to Sections 1943 and 1944 below. (b) Identification of the basic scope and needs of the project and Design -Build Contract, the expected cost range, and other information deemed necessary by the City to inform interested parties of the contracting opportunity, to include the methodology that will be used by the City to evaluate Proposals, and specifically whether the contract will be awarded to the lowest responsible bidder or on a Best Value basis as set forth in the Request for Proposals. (c) Significant Performance Criteria and other objective factors which the City reasonably expects to consider in evaluating Proposals in order to determine responsiveness and the Best Value Proposal, including cost or price and all nonprice related factors. (d) The relative importance or weight assigned to each of the factors identified in the Request For Proposals as will be used to establish the Best Value Proposal. (e) The Request for Proposals shall be advertised publicly. 1943. ESTABLISHING PREQUALIFICATION AND SELECTION PROCESS. The City Manager or applicable City Department Head has the discretion to establish a competitive prequalification and selection process prior to the issuance of a Request for Proposals for the Design -Build Contract. If a prequalification process is used, such prequalification procedure shall be advertised publicly. In the event a prequalification process is used, only prequalified Design -Build Entities shall be permitted to submit Proposals in response to the Request for Proposals. In the event that a prequalification process is not used, the Request for Proposals shall be advertised publicly as described above. 1944. PREQUALIFICATION CRITERIA (OPTIONAL) If the City Manager or applicable City Department Head elects the optional prequalification process as the basis for the selection process of the Design -Build Entity, the objective criteria for prequalification may include, but are not limited to, consideration of the following criteria supplied by a Design -Build Entity: a (a) Possession of all required licenses, registration, and credentials in good standing that are required to design and construct the project. (b) Submission of documentation establishing that the Design -Build Entity members have completed, or demonstrated the capability to complete, projects of similar size, scope, building type, or complexity, and that proposed key personnel have sufficient experience and training to competently manage and complete the design and construction of the project. (c) Submission of evidence establishing that the Design -Build Entity has the capacity to obtain all required payment and performance bonding, liability insurance, and errors and omissions insurance, as well as a financial statement assuring the City that the Design -Build Entity has the capacity to complete the project. 1945. FALSE DECLARATION UNLAWFUL. The information submitted to the City in a prequalification process concerning the Design -Build Entity's qualifications and experience shall be verified under oath by the Design -Build Entity and its members. It is unlawful to submit any declaration under this Chapter containing any material matter that is false. 1946. PROPOSAL SECURITY. All Proposals for a Design -Build Contract shall be accompanied by a cashier's check or certified check made payable to the City of Arcadia, or a bidder's bond executed by a surety admitted to engage in such business in the State of California, for an amount equal to 10% of the amount of the Proposal, and no Proposal shall be considered unless such proposal guarantee is properly enclosed therewith. The proposal guarantee shall be forfeited if the Proposal is withdrawn beyond the submission deadline set forth in the Request for Proposals, or if the Proposal is accepted but the Design -Build Entity fails to execute the Design -Build Contract. 5 1947. REVIEW AND EVALUATION OF PROPOSALS AND AWARD OF CONTRACT. (a) The City Manager or applicable City Department Head may appoint a selection committee to review and rank the Proposals of the Design -Build Entities from most to least advantageous to the City. The selection committee shall use the evaluation criteria set forth in this Chapter and the applicable Request For Proposals in its review of the Proposals. The composition of the committee shall be within the discretion of the City Manager or applicable City Department Head. (b) The City Council shall award the final contract after considering the selection committee's evaluation of Proposals to the Design -Build Entity submitting the Proposal found to be most advantageous to the City as the Best Value. 1948. SUBCONTRACTOR LISTING. The City recognizes that the Design -Build Entity is charged with performing both design and construction. Because a Design -Build Contract may be awarded prior to the completion of the design, it is often impracticable for the Design -Build Entity to list all subcontractors at the time of the award. (a) It is the intent of the City to establish a clear process for the selection and award of subcontracts entered into pursuant to this Chapter in a manner that retains protection for subcontractors while enabling the Design -Build project to be administered in an efficient fashion. (b) All of the following requirements shall apply to subcontractors, licensed by the state, that are employed on Design -Build projects undertaken pursuant to this Chapter. (1) The Request For Proposals shall specify the essential design disciplines, construction trades or types of subcontractors that must be listed by the Design -Build Entity in the Proposal. (2) Subcontractors not listed in the Proposal shall be awarded subcontracts by the Design -Build Entity in accordance with a competitive selection process set forth in the Request For Proposals. The Design -Build Entity shall furnish to the City documentation verifying that all subcontractors not listed at the time of award were subsequently awarded subcontracts in accordance with the process set forth in the Request For Proposals. All subcontractors that are listed in the Proposal or subsequently awarded subcontracts shall be afforded the protection of all applicable laws." SECTION 2. The Arcadia Municipal Code is hereby amended by adding Chapter 13 to Article I to read in its entirety as follows: "CHAPTER 13 PUBLIC WORKS CONTRACTS, EXEMPTION FROM LABOR CODE REQUIREMENTS 1950. PURPOSE AND INTENT. This Chapter is intended to supersede the provisions of the California Labor Code and, except as otherwise noted herein, the provisions of the Labor Code shall have no application to public works projects of the City of Arcadia. 1951. DECLARATION OF EXEMPTION. The City declares that it is exempt from all provisions of the Labor Code of the State of California for all "public works" as defined in Sections 1720, 1720.2, 1720.3, or 1720.6 of the Labor Code, as they may be amended from time to time, except in the following instances: 1. Those provisions that are specifically and expressly included in and made applicable to the City by a contract; 2. Those provisions that the City specifically and expressly agrees are applicable to the City as a condition of state funding or any required state approval; 3. Those provisions that the City specifically and expressly agrees are applicable to the City as a condition of federal funding or any required federal approval; and 4. Those provisions that are made expressly applicable to the City by resolution adopted by the City Council." SECTION 3. SEVERABILITY. The provisions of this Ordinance are severable. If a court determines that a word, phrase, clause, sentence, paragraph, subsection, section, or other provision is invalid or that the application of any part of the provision to any person or circumstance is invalid, the remaining provisions and the application of those provisions to other persons or circumstances are not affected by that decision. SECTION 4. The City Clerk shall certify to the adoption of this Ordinance and shall cause a copy of same to be published at least once in the official newspaper of said City within fifteen (15) days after its adoption. This Ordinance shall take effect on the thirty -first (31 st) day after its adoption. Passed, approved and adopted this day of ATTEST: City Clerk APPROVED AS TO FORM: Stephen P. Deitsch City Attorney E. Mayor of City of Arcadia , 2012.