California Expands CM/GC Authority for Public Agencies to Combat Drought and Climate Challenges
Governor Newsom signed in law California Senate Bill 598 (SB 598) on October 11, 2025, and will go into effect January 1, 2026. SB 598 will implement processes to streamline local agency water infrastructure projects. It will allow certain local agencies to use the Construction Manager/General Contractor (CM/GC) project delivery method for projects aimed at addressing ongoing drought or climate change-related water shortages.
Currently, California Public Contract Code section 21568.1 authorizes the Metropolitan Water District of Southern California to use the CM/GC project delivery method for regional recycled water projects or other water infrastructure projects under specified conditions. SB 598 adopts the current procedures used by the Metropolitan Water District of Southern California to deliver CM/GC projects.
The CM/GC project delivery method is an alternative to the traditional design-bid-build method and involves procuring a construction manager to provide services during both the design and construction phases of a project. The construction manager provides preconstruction services during the design phase, advising on, among other things, scheduling, pricing, and phasing to assist the local agency in designing a more constructable project. After the plans have been sufficiently developed and pricing has been successfully negotiated between the construction manager and local agency, the local agency awards the construction services to the construction manager and they become the general contractor for the project. However, the local agency is not obligated to move forward with construction services.
Specifically, SB 598 does the following:
- Allows cities, counties and special districts authorized by law to manage and provide for the production, storage, supply, treatment, or distribution of any water from any source to utilize the CM/GC project delivery method
- Applies to the construction of recycled water facilities or infrastructure designed to alleviate water shortages attributable to drought, climate change or other environmental factors
- Limited to 15 capital outlay projects for each agency. The authority sunsets on January 1, 2031. Contracts initiated before that date will continue until completion
- Requires an enforceable commitment from the construction manager that it, and its subcontractors, will use a skilled and trained workforce to perform all work on the project, unless there is a project labor agreement (Reference CA Public Contract Code section 21568.6 for requirements and carve-outs)
SB 598 aims to streamline and modernize how local water infrastructure projects are delivered, especially in response to California’s ongoing drought and climate challenges. There are several benefits to utilizing this authority. Early contractor input and collaboration during the design phase, including providing value engineering and constructability services, helps provide valuable input on the design prior to construction. This can expedite the completion of a project and minimize schedule delays. Additionally, real-time cost feedback during the design phase helps keep the project within budget and even reduces project costs. Collaboration between the construction manager and designer fosters better outcomes and accountability on the project, leading to reduced risks and costs for a public agency.
For questions or more information on SB 598, please contact Craig Hayes, Joseph Manalili, and Catherine Achy.
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