BILL NUMBER: AB 2567	CHAPTERED
	BILL TEXT

	CHAPTER  951
	FILED WITH SECRETARY OF STATE  SEPTEMBER 27, 2002
	APPROVED BY GOVERNOR  SEPTEMBER 26, 2002
	PASSED THE ASSEMBLY  AUGUST 29, 2002
	PASSED THE SENATE  AUGUST 26, 2002
	AMENDED IN SENATE  AUGUST 21, 2002
	AMENDED IN ASSEMBLY  APRIL 16, 2002

INTRODUCED BY   Committee on Business and Professions (Correa
(Chair), Bogh, Cedillo, Chavez, Corbett, Kelley, Koretz, Matthews,
and Nation)

                        FEBRUARY 21, 2002

   An act to amend Section 14838.5 of, to add Section 14838.7 to, and
to repeal Section 14859 of, the Government Code, to amend Sections
2002 and 2807 of the Penal Code, and to amend Section 10332 of the
Public Contract Code, relating to state agencies.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2567, Committee on Business and Professions.  State Agencies:
reports:  public contracts:  acquisitions of goods and services.
   Existing law authorizes any state agency, that receives delegated
authority from the Department of General Services to acquire, without
prior approval, materials, supplies, and equipment, to make
specified purchases, including acquisitions not exceeding $15,000
from vendors not listed on price schedules in specified
circumstances, and from vendors at a price lower than state warehouse
prices.
   Existing law also requires the Department of General Services, on
July 1 of each year, to establish the minimum dollar level below
which a state agency has the authority to acquire goods without prior
approval from the department.  The current established minimum
dollar level is set at $25,000.
   This bill would apply this annually established limit, in lieu of
the current $15,000 threshold, to acquisitions from vendors not
listed on price schedules and from vendors at a price lower than
state warehouse prices, made by any state agency that has been
delegated authority to make specified purchases without prior
approval from the Department of General Services.
   Existing law requires the Department of General Services to make a
written report to the Governor, embracing a record of the complete
transaction of the Office of State Printing for the preceding fiscal
year.
   This bill would eliminate that reporting requirement.
   Existing law requires various state agencies and officers to
report to the Director of General Services and to the Chairperson of
the Joint Legislative Budget Committee on their use of goods and
services, as specified.
   This bill would eliminate that reporting requirement.
   Existing law authorizes a local agency to provide for a small
business preference in construction, the procurement of goods, or the
delivery of services, and to establish a subcontracting
participation goal for small businesses on contracts with a
preference for those bidders who meet the goal.
   This bill would, for purposes of this authority, require the term
"small business" to be defined by each local agency, and would also
reduce, as specified, maximum contract value limits with respect to
the awarding of state contracts, under certain authority, to small
businesses, microbusinesses, or disabled veteran businesses.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 14838.5 of the Government Code is amended to
read:
   14838.5.  (a) Notwithstanding the advertising, bidding, and
protest provisions of Chapter 6 (commencing with Section 14825) of
this code and Chapter 2 (commencing with Section 10290) and Chapter 3
(commencing with Section 12100) of Part 2 of Division 2 of the
Public Contract Code, a state agency may award a contract for the
acquisition of goods, services, or information technology that has an
estimated value of greater than five thousand dollars ($5,000), but
less than one hundred thousand dollars ($100,000) , to a certified
small business, including a microbusiness, or to a disabled veteran
business enterprise, as long as the agency obtains price quotations
from two or more certified small businesses, including
microbusinesses, or from disabled veterans business enterprises.
   (b) In carrying out subdivision (a), state agencies shall consider
a responsive offer timely received from a responsible certified
small business, including a microbusiness, or from a disabled veteran
business enterprise.
   (c) If the estimated cost to the state is less than five thousand
dollars ($5,000) for the acquisition of goods, services, or
information technology, or a greater amount as administratively
established by the director, a state agency shall obtain at least two
price quotations from responsible suppliers whenever there is reason
to believe a response from a single source is not a fair and
reasonable price.
  SEC. 2.  Section 14838.7 is added to the Government Code, to read:

   14838.7.  (a) Notwithstanding the advertising and bidding
provisions of Chapter 6 (commencing with Section 14825) of this code
and Chapter 1 (commencing with Section 10100) of Part 2 of Division 2
of the Public Contract Code, a state agency may award a contract for
construction, including the erection, construction, alteration,
repair, or improvement of any state structure, building, road, or
other state improvement of any kind that has an estimated value of
greater than five thousand dollars ($5,000) but less than the cost
limit for State Contract Act projects, as specified in subdivision
(b) of Section 10105 of the Public Contract Code, to a certified
small business, including a microbusiness, or to a disabled veteran
business enterprise, as long as the agency obtains written bid
submittals from two or more certified small businesses, including
microbusinesses, or from disabled veteran business enterprises.
   (b) In implementing subdivision (a), state agencies shall consider
a responsive offer timely received from a responsible certified
small business, including a microbusiness, or from a disabled veteran
business enterprise.
   (c) If the estimated cost to the state is less than five thousand
dollars ($5,000) for the public work construction project, a state
agency shall obtain at least two written bid submittals from
responsible contractors whenever there is reason to believe a
response from a single source is not a fair and reasonable price.
  SEC. 3.  Section 14859 of the Government Code is repealed.
  SEC. 4.  Section 2807 of the Penal Code is amended to read:
   2807.  (a) The authority is hereby authorized and empowered to
operate industrial, agricultural, and service enterprises which will
provide products and services needed by the state, or any political
subdivision thereof, or by the federal government, or any department,
agency, or corporation thereof, or for any other public use.
Products may be purchased by state agencies to be offered for sale to
inmates of the department and to any other person under the care of
the state who resides in state-operated institutional facilities.
Fresh meat may be purchased by food service operations in state-owned
facilities and sold for onsite consumption.
   (b) All things authorized to be produced under subdivision (a)
shall be purchased by the state, or any agency thereof, and may be
purchased by any county, city, district, or political subdivision, or
any agency thereof, or by any state agency to offer for sale to
persons residing in state-operated institutions, at the prices fixed
by the board.  State agencies shall make maximum utilization of these
products, and shall consult with the staff of the authority to
develop new products and adapt existing products to meet their needs.

  SEC. 5.  Section 2002 of the Public Contract Code is amended to
read:
   2002.  (a) Notwithstanding any other provision of law requiring a
local agency to award contracts to the lowest responsible bidder, any
local agency may do any of the following in facilitating contract
awards to small businesses:
   (1) Provide for a small business preference in construction, the
procurement of goods, or the delivery of services where
responsibility and quality are equal.  The preference to a small
business shall be up to 5 percent of the lowest responsible bidder
meeting specifications.
   (2) Establish a subcontracting participation goal for small
businesses on contracts and grant a preference, up to a maximum of 5
percent, to those bidders who meet the goal.
   (3) Require bidders to make good faith efforts to meet a
subcontracting participation goal for small business contracts.
Bidders that fail to meet the goal shall demonstrate that they made
good faith efforts to utilize small business contractors.
   (b) The term "small business," as used in this section, shall be
defined by each local agency.
  SEC. 6.  Section 10332 of the Public Contract Code is amended to
read:
   10332.  Any state agency that receives delegated authority to
acquire goods shall be authorized, at a minimum, to make the
following types of acquisitions:
   (a) Acquisitions not exceeding the dollar value established
pursuant to Section 10330.
   (b) Acquisitions in any amount of goods available under an
unexpired statewide or regional contract.  Acquisitions of goods for
which a valid statewide or regional contract is in effect may not be
made, without the approval of the office, from a supplier other than
the supplier with whom the state has a valid contract.
   (c) Acquisitions in any amount of goods that state agencies are
required, by Section 2807 of the Penal Code, to acquire from the
Prison Industry Authority.
   (d) Acquisitions not exceeding the dollar amount, established
pursuant to Section 10330, of goods designated in price schedules
that the office has established with suppliers.  Acquisitions not
exceeding the dollar amount, established pursuant to Section 10330,
of goods designated in price schedules may be made from a supplier
other than the supplier specified on a price schedule if another
supplier offers the same or equivalent goods at a price lower than
the price established in the price schedule.  The agency shall notify
the office prior to making the acquisition.  The acquisition may be
made 48 hours after receipt of the notice by the office unless the
office advises the agency that the goods to be acquired are not the
same or equivalent to the goods specified on a price schedule.
   (e) Acquisitions not exceeding the dollar value, established
pursuant to Section 10330, of goods that are available from the state
warehouses but which the state agency can acquire from another
supplier at a price lower than the price charged by the department.
The agency shall notify the office prior to making the acquisition.
The acquisition may be made 48 hours after receipt of the notice by
the office unless the office advises the agency that the goods to be
acquired are not the same or equivalent to the goods available from
the state warehouses.