(a) For the purposes of this section, the following definitions shall apply:

(1) “Design-build” means a construction procurement process in which both the design and construction of a project are procured from a single entity.

(2) “Progressive design-build” means a project delivery process in which both the design and construction of a project are procured from a single entity that is selected through a qualifications-based selection at the earliest feasible stage of the project.

(3) “Design-build project” means a capital outlay project using the design-build construction procurement process.

(4) “Progressive design-build project” means a capital outlay project using the progressive design-build construction procurement process.

(5) “Design-build entity” means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting, architectural, and engineering services as needed.

(6) “Design-build solicitation package” means the performance criteria, any concept drawings, the form of contract, and all other documents and information that serve as the basis on which bids or proposals will be solicited from the design-build entities for design-build projects.

(7) “Design-build phase” means the period following the award of a contract to a design-build entity for a design-build project in which the design-build entity completes the design and construction activities necessary to fully complete the project in compliance with the terms of the contract.

(8) “Performance criteria” means the information that fully describes the scope of a proposed design-build project and includes, but is not limited to, the size, type, and design character of the buildings and site; the required form, fit, function, operational requirements, and quality of design, materials, equipment, and workmanship; and any other information deemed necessary to sufficiently describe the state’s needs. Performance criteria may include concept drawings, which include any schematic drawings or architectural renderings that are prepared in the detail necessary to sufficiently describe the state’s needs.

(9) “Qualification-based selection” means the process by which a state agency solicits for services from the design-build entities for a progressive design-build project.

(10) “Preconstruction phase” means the period following the award of a contract to a design-build entity for a progressive design-build project in which the design-build entity completes design activities and any preconstruction activities necessary to produce a guaranteed maximum price.

(11) “Guaranteed maximum price” means the maximum payment amount agreed upon by the Department of General Services and the design-build entity for the design-build entity to finish all remaining design, preconstruction, and construction activities sufficient to complete and close out a progressive design-build project. If the cost for completing all remaining design, preconstruction, and construction activities sufficient to complete and close out the progressive design-build project exceed the guaranteed maximum price, the costs exceeding the guaranteed maximum price shall be the responsibility of the design-build entity. If the cost for these activities is less than the guaranteed maximum price, the design-build entity shall not be entitled to the difference between the cost and the guaranteed maximum price. These amounts shall be revert to the fund from which the appropriation was made.

(12) “Progressive design-build phase” means the remaining design and preconstruction activities necessary after the preconstruction phase, and all construction activities, necessary to complete construction and closeout of a progressive design-build project.

(b) (1) Except as described in paragraphs (2) and (3), funds appropriated for a design-build project or progressive design-build project shall not be expended by any state agency, including, but not limited to, the University of California, the California State University, the California Community Colleges, and the Judicial Council, until the Department of Finance and the State Public Works Board have approved performance criteria or the guaranteed maximum price.

(2)  Paragraph (1) shall not apply to any of the following for funds appropriated for a design-build project:

(A) Amounts for acquisition of real property, in fee or any lesser interest.

(B) Amounts for equipment.

(C) Amounts appropriated for performance criteria.

(D) Amounts appropriated for preliminary plans, if the appropriation was made prior to January 1, 2005.

(3) Paragraph (1) shall not apply to any of the following for funds appropriated for a progressive design-build project:

(A) Amounts for acquisition of real property, in fee or any lesser interest.

(B) Amounts for equipment.

(C) Amounts appropriated for qualification-based selection.

(D) Amounts appropriated for the preconstruction phase.

(c) (1) If funds have been expended on the design-build phase or the progressive design-build phase of a project by any state agency prior to the approval of the performance criteria or the guaranteed maximum price by the Department of Finance and the State Public Works Board, all appropriated amounts for the design-build phase or the progressive design-build phase of a project, including all amounts expended on design-build or progressive design-build activities, shall revert to the fund from which the appropriation was made.

(2) A design-build project for which a capital outlay appropriation is made shall not be put out to design-build solicitation until the bid package has been approved by the Department of Finance. A substantial change shall not be made to the performance criteria as approved by the board and the Department of Finance without written approval by the Department of Finance. The Department of Finance shall approve any proposed bid or proposal alternates set forth in the design-build solicitation package.

(d) The State Public Works Board may augment a design-build project or a progressive design-build project in an amount of up to 20 percent of the capital outlay appropriations for the project, irrespective of whether any such appropriation has reverted. For projects authorized through multiple fund sources, including, but not limited to, general obligation bonds and lease-revenue bonds, to the extent permissible, the Department of Finance shall have full authority to determine which of the fund sources will bear all or part of an augmentation. The board shall defer all augmentations in excess of 20 percent of the amount appropriated for each design-build project or a progressive design-build project until the Legislature makes additional funds available for the specific project.

(e) In addition to the powers provided by Section 15849.6, the State Public Works Board may further increase the additional amount in Section 15849.6 to include a reasonable construction reserve within the construction fund for any capital outlay project without augmenting the project. The amount of the construction reserve shall be within the 20 percent augmentation limitation. The board may use this amount to augment the project, when and if necessary, after the lease-revenue bonds are sold to ensure completion of the project.

(f) Any augmentation in excess of 10 percent of the amounts appropriated for each design-build project or a progressive design-build project shall be reported to the Chairperson of the Joint Legislative Budget Committee, or their designee, 20 days prior to board approval, or not sooner than whatever lesser time the chairperson, or their designee, may in each instance determine.

(g) (1) The Department of Finance may change the administratively or legislatively approved scope for major design-build projects or a progressive design-build projects.

(2) If the Department of Finance changes the approved scope pursuant to paragraph (1), the department shall report the changes and associated cost implications to the Chairperson of the Joint Legislative Budget Committee, the chairpersons of the respective fiscal committees, and the legislative members of the State Public Works Board 20 days prior to the proposed board action to recognize the scope change.

(h) The Department of Finance shall report to the Chairperson of the Joint Legislative Budget Committee, the chairpersons of the respective fiscal committees, and the legislative members of the State Public Works Board 20 days prior to the proposed board approval of performance criteria or guaranteed maximum price for any project when it is determined that the estimated cost of the total project is in excess of 20 percent of the amount recognized by the Legislature.

(Amended by Stats. 2021, Ch. 77, Sec. 13. (AB 137) Effective July 16, 2021.)