BILL ANALYSIS                                                                                                                                                                                                    






                                                       Bill No:  AB  
          2036
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2009-2010 Regular Session
                                 Staff Analysis



          AB 2036  Author:  Bill Berryhill
          As Amended:  July 15, 2010
          Hearing Date:  August 10, 2010
          Consultant:  Paul Donahue


                                     SUBJECT  

                       Public Works Contracts: Documents

                                  DESCRIPTION
           
          AB 2036 is an  urgency   bill  requiring a state public entity  
          taking bids for a public work or improvement to distribute  
          a paper or electronic copy of the project's contract  
          documents to prospective bidders, subcontractor bidders and  
          suppliers when requested by a contractor plan room service.

          The bill specifies that, if the public entity requires that  
          a deposit be paid as part of a paper contract documents  
          distribution policy, the deposit cannot exceed $250 per  
          set, and it shall be refunded upon return of the contract  
          documents within 14 days after the project is awarded.  

          The bill provides that the government entity shall  
          reimburse a landscape architect, architect or professional  
          engineer for the actual costs of preparation and  
          distribution of the plans and specifications. 
           
                                   EXISTING LAW

           The State Contract Act enacts a comprehensive scheme  
          governing contracts between state departments and private  
          contractors for construction of public works contracts,  
          which are defined in existing law as agreements for the  
          "erection, construction, alteration, repair, or improvement  




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          of any public structure, building, road, or other public  
          improvement of any kind" (Public Contract Code  1101). 

          Public entities advertise for bids on the State Contracts  
          Register by way of a notification to contractors, and  
          larger public works projects are also advertised in  
          additional publications.  Before entering into any contract  
          for a project, the contracting entity must prepare full,  
          complete, and accurate plans and specifications and  
          estimates of cost, giving such directions as will enable  
          any competent mechanic or other builder to carry them out  
          (Public Contract Code  10120).  The original draft or a  
          certified copy of the plans, specifications, and estimates  
          of cost is required to be filed in the department's offices  
          before further action is taken on the contract for the  
          project (Public Contract Code 10121). 

                                    BACKGROUND
           
           Purpose of the bill  .  The author states that "a number of  
          public entities in California are requiring contractors,  
          subcontractors, and material suppliers to pay for the plans  
          and specification documents" on the particular bid  
          solicitation for the proposed public works project.  

          The author and supporters of the bill note that  
          historically, public entities authorized those seeking to  
          examine project plans for the purpose of determining  
          whether or not to bid on the proposed project to simply  
          take the plans and specifications after paying a deposit,  
          which was returned if the plans were returned to the entity  
          in good condition.  This is in fact still the practice in  
          many jurisdictions in the state.  

          Many builders' exchanges and other contractor groups  
          operate "contractor plan room services," which allow their  
          members to view hard copy plans or download plans and  
          specifications for projects throughout the state.  Many of  
          these services have become online plan services.  

           Arguments in support  .  The Associated General Contractors  
          (AGC) contend that charging for plans and specifications  
          leads to a reduction in the number of bidders competing on  
          a project, because subcontractors and material suppliers  
          avoid bidding on projects on which they must pay a  
          non-refundable fee just to view the plans and  




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          specifications.  In addition, AGC states that the practice  
          of charging fees to plans and specifications diminishes the  
          participation of small, minority-owned and women-owned  
          businesses because these firms are typically too small to  
          front payment of plans for project after project.  AGC  
          contends that it often takes bidding on 8 to 10 projects to  
          be successful on one project. 

          The National Electrical Contractors Association (NECA),  
          Golden State Builders' Exchanges, Engineering Contractors  
          Association, and others argue that this emerging practice  
          on the part of public entities to charge for plans and  
          specifications is contrary to good public policy because it  
          limits the number of bidders by forcing them to absorb the  
          upfront costs before they have had a chance to review the  
          project details. 

           SUPPORT:   

          American Fence Association, California Chapter
          Associated General Contractors of America, California  
          Chapters
          California Fence Contractors' Association
          California Legislative Conference of the Plumbing, Heating  
          and Piping Industry
          Engineering Contractors' Association
          Flasher/Barricade Association
          Golden State Builders' Exchanges
          Kern County Builders' Exchange
          Marin Builders' Association
          National Electrical Contractors Association, California  
          Chapters

           OPPOSE:   

          None on file.
           
          FISCAL COMMITTEE:   Senate Appropriations Committee


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