Design-Build Legislation - Design-Build for Water and Wastewater Projects - page 41

safety record. Design work performed on a DB project must be prepared by a properly
licensed engineer. A DB contractor or engineer who participates in development of the
procurement documents cannot be a member of any proposer's team. The design-builder
must provide surety bonds in the amount of the contract for all nondesign services and
professional liability insurance for the design portion (California Business and Profes-
sional Code, 5537.2, 1985; California Public Contract Code, 10708, 2005).
Initially, as a condition of using DB, local agencies needed to establish a labor com-
pliance program (LCP) or contract with a third party to operate their LCP. The state
Department of Industrial Relations (DIR) is responsible for the approval and review of
LCPs. In 2009, the legislature shifted enforcement of prevailing wage to the DIR. Local
governments are no longer required to establish LCPs; instead they may pay the DIR a fee
to oversee compliance (Ho 2009b).
Design-Build in the State of Ohio
Until 2011, public projects in Ohio were delivered in the same manner for more than 134
years (Ohio Construction Reform Panel 2009). After 2010 elections where reform and
change were key themes, the newly elected Governor John Kasich and his new major-
ity pushed for changes in the public construction laws for all types of construction. The
result was passage of two major design-build bills. One was the state's first comprehensive
design-build law, and the second was the expansion of the state's current design-build
authority for Ohio Department of Transportation. Passage of HB 153 brought sweeping
changes to the way Ohio delivers public projects. The law authorizes all state agencies,
state institutions of higher education, counties, cities, townships school districts, and all
political subdivisions to use DB.
Prior to passage of HB 153 there were three major barriers to DB in Ohio. First, most
public owners were required by law to award bids to the lowest responsive bidder. As a
result, the majority of projects were delivered via the DBB delivery method (Ohio Revised
Code, 153.50, 1953). Second, public projects had to be bid and performed on a multiple-
prime (MP) basis, which requires distinct bid packages for mechanical, electrical, and
plumbing work if work by these disciplines exceeds $5,000 and the total cost of the project
exceeds $50,000 (Frank and Ward 2010). The third obstacle to DB was the requirement
that design and construction services be procured separately (Frank and Ward 2010).
These antiquated statutes created significant hurdles to DB project delivery in Ohio
and generated considerable controversy. Many public owners have spoke out about inef-
ficiencies, cost overruns, poor quality, and project delays that were caused by these statu-
tory requirements (Frank and Ward 2010). Previously, the only public entities permitted
to use DB in Ohio were the Ohio Department of Transportation (ODOT) and chartered
municipalities that exercise home rule powers.
Governor Kasich's first design-build victory was his transportation budget bill
(H.B.114) signed into law Mar. 30, 2011. It dramatically expanded ODOT's authority to
use DB. It had been limited to a total not to exceed $250 million every two years. This
cap was increased to $1 billion annually. The bill (Ohio Revised Code, 5517.011, 2011) also
granted ODOT authority to enter into public-private partnerships and to select proposers
on a “best-value basis” rather then requiring the “lowest and best” bid. This gives ODOT
far greater flexibility in its DB program. The bill also codified the use of stipends ending