BILL NUMBER: AB 722	CHAPTERED  09/04/03

	CHAPTER  266
	FILED WITH SECRETARY OF STATE  SEPTEMBER 4, 2003
	APPROVED BY GOVERNOR  SEPTEMBER 3, 2003
	PASSED THE ASSEMBLY  AUGUST 21, 2003
	PASSED THE SENATE  JULY 21, 2003
	AMENDED IN SENATE  JUNE 10, 2003
	AMENDED IN ASSEMBLY  MAY 12, 2003
	AMENDED IN ASSEMBLY  APRIL 7, 2003

INTRODUCED BY   Assembly Member Matthews

                        FEBRUARY 19, 2003

   An act to add Sections 10290.3 and 12101.7 to the Public Contract
Code, relating to public contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 722, Matthews.  Public contracts:  electronic bids:  reverse
auctions.
   Existing California public contract law encourages competition for
public contracts and establishes procedures to be followed by public
officials in the efficient administration of public contracting.
That law authorizes public entities to adopt methods and procedures
to receive bids on public works or other contracts over the Internet,
as provided.
   This bill would authorize the Department of General Services to
utilize reverse auctions for the acquisition of goods, services, and
information technology.  The bill would define "reverse auction" as a
competitive online solicitation process for fungible goods,
information technology, or services in which vendors compete against
each other online in real time in an open and interactive
environment.  This bill would also disallow the utilization of the
"reverse auction" process for bidding on specified construction
contracts.


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


  SECTION 1.  Section 10290.3 is added to the Public Contract Code,
to read:
   10290.3.  (a) Notwithstanding the bidding provisions of this
chapter, reverse auctions may be utilized for the acquisition of
goods and services.  The reverse auction process shall include a
specification of an opening date and time when real-time electronic
bids may be accepted, and provide that the procedure shall remain
open until the designated closing date and time.
   (b) All bids on reverse auctions shall be posted electronically on
the Internet, updated on a real-time basis, and shall allow
registered bidders to lower the price of their bid below the lowest
bid posted on the Internet.
   (c) The Department of General Services shall require vendors to
register before the reverse auction opening date and time, and as
part of the registration, agree to any terms and conditions and other
requirements of the solicitation.  The Department of General
Services may require vendors to be prequalified prior to placing bids
in a reverse auction.
   (d) For purposes of this section, "reverse auction" means a
competitive online solicitation process for fungible goods or
services in which vendors compete against each other online in real
time in an open and interactive environment.
   (e) The reverse auction process may not be used for bidding on any
construction contract that is subject to Chapter 1 (commencing with
Section 10100).
  SEC. 2.  Section 12101.7 is added to the Public Contract Code, to
read:
   12101.7.  (a) Notwithstanding the sealed bidding provisions of
this chapter, reverse auctions may be utilized for the acquisition of
information technology, in accordance with the procedures set forth
in Section 10290.3.
   (b) For purposes of this section, "reverse auction" means a
competitive online solicitation process for fungible information
technology in which vendors compete against each other online in real
time in an open and interactive environment.