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Design-build is an approach to the procurement of design and construction services, whereby a single entity, known as the "Design-Builder," is retained to provide both professional design services and general contractor services. Department Heads are authorized to seek bids or proposals from qualified private entities ("Design-Builders") for design-build construction and/or financing of Public Work projects under the following conditions:
(a) Before the request for qualifications is issued, the Department Head shall determine that a design-build delivery method is necessary or appropriate to achieve anticipated cost savings or time efficiencies, or both, and that such a delivery method is in the public's best interest. For projects involving financing of Public Work or Improvements provided by the Design-Builder, the Department Head must first seek the approval of the board or commission if the department is under the jurisdiction of a board or commission, or the City Administrator, if the department is under the jurisdiction of the Mayor. The Department Head shall consult with the Office of the Controller to establish criteria for evaluating private financing proposals.
(b) Competitive Bid or Fixed Budget Limit Procurement.
(1) Pre-Qualification. When selecting a Design-Builder based on competitive bid or proposals for a fixed budget limit project, the Department Head shall pre-qualify Design-Builders, or a combination of the Design-Builders and one or more of their subcontractors prior to issuing an invitation to submit bids or proposal. The procedure for pre-qualification is as follows:
(A) The Department Head shall issue a request for qualifications inviting interested parties to submit their qualifications to perform the project. The request for qualifications shall include criteria by which the prospective DesignBuilders will be evaluated during the qualification process. The evaluation criteria shall be based on qualifications and experience relevant to the services needed for the project. The list of criteria may include, but is not limited to the following: (i) qualifications to design-build the proposed project; (ii) evidence of financial capacity; (iii) experience on similar projects; (iv) ability to collaboratively and cooperatively deliver projects on time and on budget; (v) history of liquidated damages for delay and other damages paid on prior projects, and prior litigation; (vi) reputation with owners of prior projects; (vii) claims history with insurance carriers and sureties; (viii) substantiated record of safe performance on construction projects in accordance with the definition of Responsible in Section 6.1; and (ix) other criteria that the Department Head may deem appropriate. The Department Head shall set objective scoring criteria and incorporate the criteria into any scoring procedure.
(B) The Department Head shall designate a panel to review pre-qualification responses and rate respondents with respect to the request for qualifications. The panel, at the Department Head's discretion, may interview respondents and evaluate designs, concepts and/or approaches to the project as part of the pre-qualification process. Only those respondents found to be qualified will be eligible to submit bids or proposals. The list of pre-qualified respondents shall be valid for not more than two years following the date of initial pre-qualification. The Department Head may restrict bidding or proposing to a shortlist of no fewer than three pre-qualified Design-Builders.
(2) Request for Bids. The Department Head shall issue a request for bids inviting pre-qualified Design-Builders to submit bids for the project in conformance with the requirements set forth in Section 6.21(a), except that the Department Head is not required to advertise for bids. The request for bids shall include a criteria package describing preliminary design criteria and performance criteria for the project, as well as any other information deemed necessary to describe adequately the City's needs for the project. The Department Head may recommend the award of a Contract to the Responsible Bidder submitting the lowest Responsive Bid. If the award to that bidder is not made for any reason, the Department Head may recommend the award of a Contract to the Responsible Bidder submitting the next lowest Responsive Bid, and so forth.
(3) Request for Proposals for Fixed Budget Limit Projects. As an alternative to receiving competitive bids, the Department Head may issue a request for proposals stating a fixed budget limit for the project and inviting pre-qualified Design-Builders to submit proposals for the project. The request for proposals shall provide a description of preliminary design criteria and performance criteria for the base scope of the project. The request for proposals shall also provide a description of preliminary design criteria and performance criteria for additional desired project enhancements. The proposal shall include the Design-Builder's agreement to fully deliver the base scope of the project and may also include any of the additional desired project enhancements the Design-Builder offers to fully deliver within the fixed budget limit. The proposals shall be evaluated based upon stated objective criteria, which may include qualifications, experience, design proposals, cost, and the value of the proposed enhancements. The Department Head may recommend the Award of a Contract to the highest-ranked proposer. If the Award to that proposer is not made for any reason, the Department Head may recommend the Award of a Contract to the next highest-ranked proposer, and so forth.
(4) Procurement of Trade Subcontractors. The Department Head may require that all subcontractors be listed at the time of bid or proposal or may identify specific trades for which the Design-Builder must list subcontractors. Following award of the Contract, the Design-Builder shall add or substitute trade subcontracts with a value exceeding 0.5% of the Contract amount applicable to the construction work as follows:
(A) Unless otherwise authorized by the Department Head, each trade subcontract opportunity shall be advertised as provided in subsection 6.21(a)(1);
(B) The Design-Builder shall establish reasonable qualification criteria and standards;
(C) The Design-Builder may then award the subcontract to a Responsible subcontractor either on a best value basis or to the Bidder with the lowest Responsive bid;
(D) All subcontractors, whether listed at the time of bid or proposal or added or substituted under this subsection 6.61(b)(4), shall be afforded all of the protections of the California Subletting and Subcontracting Fair Practices Act at California Public Contract Code Sections 4100 et seq., as amended from time to time.
(c) Best Value Procurement. If the project seeks private financing proposals and/or the Department Head determines that it is in the public’s best interest to consider qualifications and/or other subjective criteria (e.g., quality of design proposal) as part of the final selection process, the Department Head shall require that prospective proposers be pre-qualified pursuant to the process in Section 6.61(a)(1) or shall issue a combined request for qualifications and proposals inviting Design-Builders, or a combination of Design-Builders and their Core Trade Subcontractors meeting specified minimum qualification criteria, to submit design-build proposals, which will be evaluated based upon Responsibility and qualifications, stated subjective criteria, and project and/or financing costs. The license and business tax requirements of subsections 6.21(a)(6) and (8) shall apply to requests for proposals under this subsection 6.61(c).
(1) The Department Head shall designate a qualified panel to evaluate design-build proposals and rank the proposals to determine which provides the overall best value to the City. The non-cost evaluation criteria may include, but is not limited to the following: (A) plan for expediency in completing the proposed project; (B) lifecycle cost to the City; (C) qualifications to finance the proposed project; (D) quality of design proposal; (E) if private financing is sought, commitment of funds, cost of funds and terms to the City; and (F) other criteria established by the Department Head in the request for proposals. The cost criterion shall constitute not less than 40% of the overall evaluation.
(2) Design Proposals.
(A) The Department Head may request Design-Builders to create partial designs, which will be evaluated as part of the selection process. The Department Head may offer a reasonable stipend to short-listed Design-Builders to create partial designs who are not awarded the Contract. The receipt of a stipend shall be contingent upon a Design-Builder's proposal being responsive to the request for proposals. Stipends paid in accordance with this subsection are exempt from the requirements of the Administrative Code, including but not limited to this Chapter 6 and Chapters 12B, 12C and Chapter 14B.
(B) The Department Head may require short-listed Design-Builders who are creating partial designs to participate in one or more confidential review meetings with City representatives and/or selection panel members during the proposal preparation period. The purpose of the review meetings will be to ensure that each Design-Builder's partial design is proceeding in a manner that is consistent with the requirements of the City as set forth in the criteria package. Discussions during review meetings shall be limited to objective elements of the criteria package.
(3) Design-Builders submitting private financing proposals shall provide evidence of the commitment of funds necessary to privately finance the proposed projects to completion.
(4) The Department Head may, at his or her sole discretion, conduct any negotiations that are necessary to effectuate the award of a Contract and that are fair and reasonable to the competitive process. The Department Head may recommend the award of a Contract to the highest-ranked proposer. If the Award to the highest-ranked proposer is not made for any reason, the Department Head may recommend the award of a Contract to the next highest-ranked proposer, and so forth.
(5) Procurement of Trade Subcontractors. With the approval of the Department Head, the selected Design-Builder may procure trade work in conformance with the following procedures:
(A) Competitive Bid Procurement. The Department Head shall require the Design-Builder to pre-qualify trade subcontractors, subject to a process, which may be a minimum qualification application, pre-approved by the Department Head. The Design- Builder shall attempt to establish a pool of no fewer than three pre-qualified subcontractors for each trade package. The Design-Builder shall receive sealed bids from the pre-qualified trade subcontractors. The bid security provisions of Section 6.21 will not apply. All trade packages procured pursuant to this subsection 6.61(c)(5)(A) shall be awarded to the Responsible Bidder submitting the lowest Responsive Bid.
(B) Core Trade Subcontractors. Upon approval of the Department Head, the Design-Builder may procure design, preconstruction, or design-assist services from Responsible Core Trade Subcontractors based on qualifications only. As soon as practical, or as otherwise approved by the department, each Core Trade Subcontractor shall provide a written cost proposal for construction of the related trade package. Before authorizing the Design-Builder to subcontract with a Core Trade Subcontractor for the trade package, the department must validate the cost proposal by an independent cost estimate. The Department Head, in the Department Head’s sole discretion, may require the Design-Builder to competitively procure the trade package by competitive bid in conformance with subsection 6.61(b)(5)(A).
(C) Self-Performed Work. The Department Head may specify in the design-build request for proposals one or more scopes of work that may be self-performed by the Design-Builder. Before authorizing the Design-Builder to self-perform work, the Department Head must determine the cost of the work to be fair and reasonable, either by an independent cost estimate or by a competitive bidding process.
(D) Direct Negotiations. The Department Head may authorize the Design-Builder to negotiate subcontracts for trade work as appropriate for the project, up to an amount not exceeding 7.5% of the total estimated construction subcontract costs. The Department Head shall establish a maximum dollar value for each negotiated trade subcontract as appropriate for the project.
(d) The City shall retain the absolute discretion to determine, at any time during the process, not to proceed with any proposed project, which right may be exercised without liability to Design-Builders for costs incurred at any point during the pre-qualification, proposal and negotiation process, and such rights shall be reserved in all requests for qualifications and proposals.
(e) All Contract terms and working conditions of Section 6.22 shall apply to design-build Contracts. Only those Administrative Code provisions that normally apply to subcontracts will apply to the trade package subcontracts procured under this Section 6.61. The Design-Builder may request permission from the Department Head to require corporate surety payment and performance bonds for some or all subcontracts.
(g) All Contracts procured under this Section 6.61 are subject to the award provisions of Section 6.3. If the proposed Contract involves a financing program, the City Capital Planning Committee must review and report on the proposed project before the board, commission, Mayor or his/her designee takes any action with respect to award of the Contract.
(h) All actions heretofore taken by a Department Head consistent with the provisions of this section are hereby approved.
(Added by Ord. 286-99, File No. 991645, App. 11/5/99; amended by Ord. 153-00, File No. 000805, App. 6/30/2000; Ord. 58-05, File No. 041571, App. 4/1/2005; Ord. 18-07, File No. 060344, App. 2/9/2007; Ord. 119-08, File No. 080277, App. 7/11/2008; Ord. 75-14 , File No. 140226, App. 5/28/2014, Eff. 6/27/2014; Ord. 108-15, File No. 150175, App. 7/2/2015, Eff. 8/1/2015; Ord. 6-17, File No. 161081, App. 1/20/2017, Eff. 2/19/2017; Ord. 113-20, File No. 200443, App. 7/17/2020, Eff. 8/17/2020)