BILL NUMBER: SB 41	CHAPTERED
	BILL TEXT

	CHAPTER  699
	FILED WITH SECRETARY OF STATE  OCTOBER 9, 2003
	APPROVED BY GOVERNOR  OCTOBER 8, 2003
	PASSED THE SENATE  SEPTEMBER 12, 2003
	PASSED THE ASSEMBLY  SEPTEMBER 11, 2003
	AMENDED IN ASSEMBLY  SEPTEMBER 11, 2003
	AMENDED IN ASSEMBLY  SEPTEMBER 8, 2003
	AMENDED IN ASSEMBLY  SEPTEMBER 2, 2003
	AMENDED IN ASSEMBLY  JULY 10, 2003
	AMENDED IN ASSEMBLY  JUNE 23, 2003
	AMENDED IN ASSEMBLY  JUNE 4, 2003
	AMENDED IN SENATE  MARCH 19, 2003
	AMENDED IN SENATE  FEBRUARY 13, 2003

INTRODUCED BY   Senator Bowen

                        JANUARY 6, 2003

   An act to amend Sections 10430, 10515, 10518, and 10526 of, to add
Article 2.5 (commencing with Section 10510.4) to Chapter 2.1 of, and
to add Article 7.8 (commencing with Section 10830) to Chapter 2.5
of, Part 2 of Division 2 of, the Public Contract Code, relating to
public contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 41, Bowen.  Public contracts:  services.
   (1) Existing law requires that every contractor who enters into a
contract with the state or the University of California for $10,000
or more be assigned an identification number by the Department of
General Services or the university, and requires that if the
contractor is a corporation or firm, the president's assigned number
be used exclusively on each contract.
   This bill would require each university campus to assign the
identification numbers to contractors with whom the campus contracts,
instead of all campuses using numbers assigned by the Regents of the
University of California, provided that the regents are able to
track all identification numbers centrally.
   (2) Existing law requires that state or local government selection
for the professional services of private architectural, landscape
architectural, engineering, environmental, land surveying, or
construction project management firms be on the basis of demonstrated
competence and professional qualifications, rather than competitive
bidding, and imposes requirements for the implementation of this
method of selection.
   This bill would subject the University of California's selection
for the professional services of any of those firms, including real
property development services firms, as defined, to the same
requirements.
   (3) Existing law prohibits persons, firms, or their subsidiaries
who are awarded state contracts for consulting services from
submitting a bid or being awarded a contract on or after January 1,
2003, for any action related to the end product of the consulting
services contract.
   This bill would change that date to July 1, 2003.  This bill would
also specify that those provisions do not apply to consulting
services contracts that comply with the requirements for the
selection of professional services firms, as provided.
   (4) Existing law includes various prohibitions with respect to
conflicts of interest of persons who are awarded state contracts or
contracts with the University of California, or officers or employees
of the state or the university who are contracting with the state or
university either directly or through other entities.
   This bill would additionally require the California State
University to comply with those prohibitions.


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


  SECTION 1.  Section 10430 of the Public Contract Code, as amended
by Section 1 of Chapter 1122 of the Statutes of 2002, is amended to
read:
   10430.  This chapter does not apply to any of the following:
   (a) The Regents of the University of California and the Trustees
of the California State University, except that Article 9 (commencing
with Section 10420) shall apply to the Trustees of the California
State University.
   (b) (1) Transactions covered under Chapter 3 (commencing with
Section 12100), except that Sections 10365.5, 10410, and 10411 shall
apply to all transactions under that chapter.
   (2) Notwithstanding paragraph (1), Section 10365.5 shall not apply
to incidental advice or suggestions made outside of the scope of a
consulting services contract.
   (c) Except as otherwise provided in this chapter, any entity
exempted from Section 10295.  However, the Board of Governors of the
California Community Colleges shall be governed by this chapter,
except as provided in Sections 10295, 10335, and 10389.
   (d) Transactions covered under Chapter 10 (commencing with Section
4525) of Division 5 of Title 1 of the Government Code.
   (e) Except as provided for in subdivision (c), members of boards
or commissions who receive no payment other than payment for each
meeting of the board or commission, payment for preparatory time, and
payment for per diem.
   (f) The emergency purchase of protective vests for correctional
peace officers whose duties require routine contact with state prison
inmates.  This subdivision shall remain operative only until January
1, 1987.
   (g) Spouses of state officers or employees and individuals and
entities that employ spouses of state officers and employees, that
are vendored to provide services to regional center clients pursuant
to Section 4648 of the Welfare and Institutions Code if the vendor of
services, in that capacity, does not receive any material financial
benefit, distinguishable from the benefit to the public generally,
from any governmental decision made by the state officer or employee.

  SEC. 2.  Article 2.5 (commencing with Section 10510.4) is added to
Chapter 2.1 of Part 2 of Division 2 of the Public Contract Code, to
read:

      Article 2.5.  Contracts with Private Architects, Engineering,
Environmental, Land Surveying, and Construction Project Management
Firms

   10510.4.  For purposes of this article, the following definitions
apply:
   (a) "Firm" means any individual, firm, partnership, corporation,
association, or other legal entity permitted by law to practice the
profession of architecture, landscape architecture, engineering,
environmental services, land surveying, or construction project
management.
   (b) "Architectural, landscape architectural, engineering,
environmental, and land surveying services" include those
professional services of an architectural, landscape architectural,
engineering, environmental, or land surveying nature as well as
incidental services that members of these professions and their
employees may logically or justifiably perform.
   (c) "Construction project management" means those services
provided by a licensed architect, registered engineer, or licensed
general contractor that meet the requirements of Section 10510.9 for
management and supervision of work performed on university
construction projects.
   (d) "Environmental services" means those services performed in
connection with project development and permit processing in order to
comply with federal and state environmental laws.  "Environmental
services" also includes the processing and awarding of claims
pursuant to Chapter 6.75 (commencing with Section 25299.10) of
Division 20 of the Health and Safety Code.
   (e) "Real property development services" means those services
undertaken by a real estate developer in connection with the
development of a developer-owned project on land owned or controlled
by the university, including, but not limited to, environmental
analysis, landscape planning, site design, market and financial
feasibility, and other incidental services that a real estate
developer may perform for the project.
   10510.5.  (a) Selection by the University of California for
professional services of private architectural, landscape
architectural, engineering, environmental, land surveying, real
property development services, or construction project management
firms shall be on the basis of demonstrated competence and on the
professional qualifications necessary for the satisfactory
performance of the services required.  In order to implement this
method of selection, the university shall adopt procedures that
assure that these services are engaged on the basis of demonstrated
competence and qualifications for the types of services to be
performed and at fair and reasonable prices to the university.
Furthermore, these procedures shall assure maximum participation of
small business firms, as defined by the Director of General Services
pursuant to Section 14837 of the Government Code.
   (b) These procedures shall specifically prohibit practices that
might result in unlawful activity including, but not limited to,
rebates, kickbacks, or other unlawful consideration, and shall
specifically prohibit university employees from participating in the
selection process when those employees have a relationship with a
person or business entity seeking a contract under this section.
   10510.6.  (a) The University of California shall follow this
section in negotiating fees and executing a contract for professional
consulting services of a private architectural, landscape
architectural, engineering, land surveying, environmental, real
property development services, or construction project management
firm.
   (b) After providing notification to the successful firm of its
selection, the university shall provide written instructions for the
negotiations that are to follow.  These instructions shall provide
the private consulting firm with necessary information that shall
allow the negotiations to proceed in an orderly fashion.
Negotiations shall begin within 14 days after the successful firm has
been notified of its selection or upon receipt of the cost proposal.
  The contractor should be notified if additional time is necessary
to begin negotiations.
   (c) Upon the completion of negotiations, the university and the
private firm shall proceed to execute a contract that the university
shall complete within 45 days.  The contractor should be notified if
additional time is necessary to complete the contract.  The
university and private firm shall work together to ensure the
successful delivery of the requested services in a timely fashion.
   (d) In the event an impasse is reached in negotiations, the
university may terminate negotiations and enter into negotiations
with the next qualified firm, in the same manner as prescribed in
Section 10510.8 with respect to management services contracts.
   10510.7.  (a) In the procurement of architectural, landscape
architectural, engineering, environmental, land surveying, real
property development services, and construction project management
services, the university shall encourage firms engaged in the lawful
practice of their profession to submit annually a statement of
qualifications and performance data.
   (b) (1) Statewide announcement of all projects requiring
architectural, landscape architectural, engineering, environmental,
land surveying, real property development services, or construction
project management services shall be made by the university through
advertisements placed in the California State Contracts Register and
in publications of the respective professional societies and
organizations of persons that perform those services.  Alternatively,
the university may develop policies to provide for electronic
statewide notice of the required announcements to ensure notification
through, at a minimum, appropriate professional societies and
organizations and the California State Contracts Register, to those
persons that perform the services sought to be procured.
   (2) The university, for each proposed project, shall evaluate
current statements of qualifications and performance data on file
with the university, together with those that may be submitted by
other firms regarding the proposed project.
   (3) (A) The university, for each proposed project, shall conduct
discussions with no less than three firms regarding anticipated
concepts and the relative utility of alternative methods of approach
for furnishing the required services.
   (B) The university shall select, from the firms with which it
conducted discussions in order of preference, based upon criteria
established and published by the university, no less than three of
the firms deemed to be the most highly qualified to provide the
services required.
   (C) If a project announcement results in submissions from fewer
than three qualified firms, the university may then select from the
available qualified firms and shall document its efforts to receive
submissions from additional firms.
   (D) These procedures shall specifically prohibit practices that
might result in unlawful activity including, but not limited to,
rebates, kickbacks, or other unlawful consideration, and shall
specifically prohibit university employees from participating in the
selection process when those employees have a relationship with a
person or business entity seeking a contract under this section.
   (4) This subdivision does not apply to a contract for the services
described in Section 10510.4 with a total contract cost of one
hundred thousand dollars ($100,000) or less, provided that the type
of project for which the contract is awarded is identified by the
university in an annual announcement, made in accordance with the
provisions of paragraph (1), that identifies the project needs of the
university that are projected to have a total contract price of one
hundred thousand dollars ($100,000) or less.
   10510.8.  (a) The university shall negotiate a contract with the
best qualified firm for architectural, landscape architectural,
engineering, environmental, land surveying, real property development
services, and construction project management services at
compensation that the university determines is fair and reasonable to
the University of California.
   (b) Should the university be unable to negotiate a satisfactory
contract with the firm considered to be the most qualified, at a
price the university determines to be fair and reasonable to the
University of California, negotiations with that firm shall be
formally terminated.  The university shall then undertake
negotiations with the second most qualified firm.  Failing accord
with the second most qualified firm, the university shall terminate
negotiations.  The university shall then undertake negotiations with
the third most qualified firm.
   (c) Should the university be unable to negotiate a satisfactory
contract with any of the selected firms, the university shall select
additional firms in order of their competence and qualification and
continue negotiations in accordance with this article until an
agreement is reached.
   10510.9.  Any individual or firm proposing to provide construction
project management services pursuant to this article shall provide
evidence that the individual or firm and its personnel carrying out
onsite responsibilities have expertise and experience in construction
project design review and evaluation, construction mobilization and
supervision, bid evaluation, project scheduling, cost-benefit
analysis, claims review and negotiation, and general management and
administration of a construction project.
  SEC. 3.  Section 10515 of the Public Contract Code is amended to
read:
   10515.  (a) No person, firm, or subsidiary thereof who has been
awarded a consulting services contract may submit a bid for, nor be
awarded a contract on or after July 1, 2003, for the provision of
services, procurement of goods or supplies, or any other related
action that is required, suggested, or otherwise deemed appropriate
in the end product of the consulting services contract.
   (b) Subdivision (a) does not apply to either of the following:
   (1) Any person, firm, or subsidiary thereof who is awarded a
subcontract of a consulting services contract that amounts to no more
than 10 percent of the total monetary value of the consulting
services contract.
   (2) Consulting services contracts that comply with Article 2.5
(commencing with Section 10510.4).
   (c) (1) Subdivision (a) does not apply to any person, firm, or
subsidiary awarded a consulting services contract by a University of
California medical center when the provision of service, procurement
of goods or supplies, or any other related action required,
suggested, or otherwise deemed appropriate in the end product of the
consulting services contract, is necessary to avoid a competitive
disadvantage in the hospital industry, improve patient care, protect
the privacy of patient information, or avoid significant delay and
additional expense.
   (2) The University of California shall report within 30 days on
any exemption granted under paragraph (1) to the Joint Legislative
Budget Committee and the Department of Finance.  The report shall
include a description of the circumstances that warranted the
exemption, the effects of the exemption on patient care or patient
privacy, and a calculation of the projected costs savings to the
institution as a result of the exemption.
  SEC. 4.  Section 10518 of the Public Contract Code is amended to
read:
   10518.  (a) Except as otherwise provided in subdivision (b), each
contractor who enters into a contract with a University of California
campus for ten thousand dollars ($10,000) or more shall be assigned
an identification number by the chancellor of that university campus.
  Each contractor who has been assigned a number shall list it on
each contract the contractor enters into with the university campus,
regardless of the amount of the contract.  In the case of a
corporation or firm, the chancellor's assigned number shall be used
exclusively on each contract with that particular chancellor's
campus.  The assigned number shall remain unchanged regardless of
future name changes.
   (b) If the identification numbers cannot be tracked centrally by
the Regents of the University of California, then the regents, and
not the chancellors, shall assign the identification numbers.
  SEC. 5.  Section 10526 is added to the Public Contract Code, to
read:
   10526.  Sections 10522, 10523, 10524, and 10525 of this article do
not apply to violations of Article 2.5 (commencing with Section
10510.4) of this chapter.
  SEC. 6.  Article 7.8 (commencing with Section 10830) is added to
Chapter 2.5 of Part 2 of Division 2 of the Public Contract Code, to
read:

      Article 7.8.  Conflict of Interest

   10830.  (a) No person, firm, or subsidiary thereof who has been
awarded a consulting services contract may submit a bid or be awarded
a contract on or after July 1, 2003, for the provision of services,
the procurement of goods or supplies, or any other related action
that is required, suggested, or otherwise deemed appropriate in the
end product of the consulting services contract.
   (b) This section does not apply to any person, firm, or subsidiary
thereof who is awarded a subcontract of a consulting services
contract that amounts to no more than 10 percent of the total
monetary value of the consulting services contract.
   (c) This section does not apply to consulting services contracts
subject to Chapter 10 (commencing with Section 4525) of Division 5 of
Title 1 of the Government Code.
   10831.  No officer or employee of the California State University
shall engage in any employment, activity, or enterprise for which the
officer or employee receives compensation or in which the officer or
employee has a financial interest if that employment, activity, or
enterprise is sponsored or funded, or sponsored and funded, by any
California State University department through or by a California
State University contract unless the employment, activity, or
enterprise is within the course and scope of the officer's or
employee's regular California State University employment.  No
officer or employee in the California State University shall contract
on his or her own individual behalf as an independent contractor
with any California State University department to provide services
or goods.  This section shall not apply to officers or employees of
the California State University with teaching or research
responsibilities.
   10832.  (a) No retired, dismissed, separated, or formerly employed
person of the California State University employed with the
California State University or otherwise appointed to serve in the
California State University may enter into a contract in which he or
she engaged in any of the negotiations, transactions, planning,
arrangements, or any part of the decisionmaking process relevant to
the contract while employed in any capacity by any California State
University department.  The prohibition of this subdivision shall
apply to a person only during the two-year period beginning on the
date the person left California State University employment.
   (b) For a period of 12 months following the date of his or her
retirement, dismissal, or separation from the California State
University, no person employed in the California State University or
otherwise appointed to serve in the California State University may
enter into a contract with any California State University
department, if he or she was employed by that department in a
policymaking position in the same general subject area as the
proposed contract within the 12-month period prior to his or her
retirement, dismissal, or separation.  The prohibition of this
subdivision shall not apply to a contract requiring the person's
services as an expert witness in a civil case or to a contract for
the continuation of an attorney's services on a matter he or she was
involved with prior to leaving the California State University.
   (c) This section does not prohibit the rehire or reappointment of
California State University employees after retirement, consistent
with California State University administrative policies, nor does it
apply to inventors and authors of intellectual property licensed
under technology transfer agreements.
   10833.  (a) Except as otherwise provided in subdivision (b), each
contractor who enters into a contract with a California State
University campus for ten thousand dollars ($10,000) or more shall be
assigned an identification number by the president of that
California State University campus.  Each contractor who has been
assigned a number shall list it on each contract the contractor
enters into with the California State University campus, regardless
of the amount of the contract.  In the case of a corporation or firm,
the president's assigned number shall be used exclusively on each
contract with that president's campus.  The assigned number shall
remain unchanged regardless of future name changes.
   (b) If the identification numbers cannot be tracked centrally by
the Trustees of the California State University, then the trustees,
and not the presidents, shall assign the identification numbers.