The use of the CM/GC method of alternative contracting has long been an issue requiring considerable AGC attention. Controversy over how public agencies utilized the method led to the introduction of multiple bills in recent legislative sessions. As a result, after an extensive year-long workgroup, successful passage of SB 254 during the 2013 legislative session and the subsequent administrative rulemaking process, new requirements for the use of CM/GC are now in effect. SB 254 became effective July 1, 2014, with permanent rules projected to be in place by the year’s end. At their core, the new law attempts to address some of the most prevalent concerns raised about CM/GC: 1) Lack of analysis by public agencies on whether CM/GC is actually the best fit for the particular project; 2) Lack of transparency in how contractors are selected by the public agency; and 3) Lack of understanding about how subcontractors can compete and participate in the selection process.
Another very important aspect of the new law is that all public contracting agencies must now follow the state’s Model Public Contracting Rules. Previously, agencies had the authority to “opt-out” and write their own rules, which had could lead to inconsistent approaches. One area not tackled by the legislative workgroup was enforcement of “bad actors.” AGC will be following very closely to see how the new laws are being implemented by agencies and is fully prepared to engage if additional changes are needed in the future.
If you have any questions on the new CM/GC statutes or administrative rules, please contact AGC Public Affairs Counsel Mike Eliason at (503) 685-8312.
For a more detailed explanation of the new legislation, read Schwabe, Wiliiamson & Wyatt Attorney Jeremy Vermilyea’s post on the Schwabe Construction blog. Jeremy served as Co-Chair of the legislative workgroup that developed SB 254 for the 2013 session.