SB 136 expands the definition of “public works” and the resulting prevailing wage requirements to certain private works related to renewable energy. Specifically, any construction, alteration, demolition, installation, or repair work done under private contract that satisfies the following conditions will be subject to prevailing wage rates: (a) the work is performed in connection with the construction or maintenance of renewable energy generating capacity or energy efficiency improvements; (b) the work is performed on the property of the state or a political subdivision of the state; and (c) either (1) more than 50% of the energy generated is purchased or will be purchased by the state or a political subdivision of the state; or (2) the energy efficiency improvements are primarily intended to reduce energy costs that would otherwise be incurred by the state or a political subdivision of the state.
SB 835 extends and expands the Best Value Construction Contract Pilot Program to all University of California campus construction projects over $1 million. Previously only the University of California at San Francisco was authorized to use a best value determination in awarding construction contracts.
Type I Indemnity Agreements
SB 474, does not take effect until Jan. 1, 2013, but because it is an important change to California construction law, it warrants discussion. SB 474 prohibits “Type I” indemnity agreements that purport to require indemnification by subcontractors of general contractors for the latter’s active negligence or willful misconduct. Specifically, SB 474 provides that construction contracts “that purport to insure or indemnify, including the cost to defend, a general contractor, construction manager, or other subcontractor, by a subcontractor against liability for . . . loss, damage, or expense are void and unenforceable to the extent the claims arise out of, pertain to, or relate to the active negligence or willful misconduct of that general contractor, construction manager, or other subcontractor, or their other agents, . . . or for defects in design furnished by those persons, or to the extent the claims do not arise out of the scope of work of the subcontractor pursuant to the construction contract.” This section does not apply to, among other things, wrap-up insurance programs, additional insured endorsements; or contracts with design professionals.