BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           2036 (B Berryhill)
          
          Hearing Date:  8/12/2010        Amended: 7/15/2010
          Consultant:  Bob Franzoia       Policy Vote: G O 8-0
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          ____
          BILL SUMMARY: AB 2036 would require an officer, department,  
          board, or commission taking bids for the construction of a  
          public work or improvement to distribute contract documents at  
          no charge to prospective bidders, including subcontractors and  
          suppliers.  Contract documents would be made available at no  
          charge to contractor plan room services when requested by a  
          contractor plan room service.  This bill would provide that if a  
          deposit is required as part of a paper contract documents  
          distribution policy, the deposit shall not exceed $250 per set  
          and shall be refunded within 14 days after award of the project,  
          as specified.  This bill would require a government entity to  
          reimburse a landscape architect, architect, or professional  
          engineer for the actual costs of preparation and distribution of  
          plans and specifications.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           Document charge prohibition       Unknown, potentially  
          significant loss of    General/
                                 of fee revenue, ongoing.  Negligible  
          toSpecial/                        significant increase in  
          project costs,         Bond
                                 potentially offset by more bidders on
                                 small projects and potentially lower bids
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          ____

          STAFF COMMENTS: This bill may meet the criteria for referral to  
          the Suspense File.
          
          This bill states that a governmental entity shall reimburse a  
          landscape architect, architect, or professional engineer for the  
          actual costs of preparation and distribution of plans and  
          specifications.  Staff notes the practical effect of this  
          language is unclear.  For example, is a low bid the same as  










          actual cost?   Would this exclude drawings which are noted  
          earlier in the bill as being part of a project's contract  
          documents?

          Staff notes the language of the bill is inconsistent.  For  
          example, the bill refers to construction of a public work or  
          improvement and later to a proposed public improvement and  
          public works projects.  The bill refers to the awarding of a  
          project which more accurately should be the awarding of a  
          contract.  Also, in various places, the bill refers to an  
          officer, department, board or commission, later to government  
          entity and finally, public agencies.

          At this time, the fiscal impact of this bill is unclear.  For  
          example, the Department of General Services charges potential  
          contractors, subcontractors, and suppliers for copies of bid  
          sets.   The department sends free sets to contractor plan room  
          services and builder exchanges in the area of the project so  
          that contractors, subcontractors, and suppliers can review bid  
          sets at no cost.  Persons can go to the department's contracts 
          Page 2
          AB 2036 (B Berryhill)

          office to review the plans.  The department has an on-line plan  
          room where persons can review bid sets at no cost.  This  
          benefits smaller subcontractors and suppliers that do not want  
          to buy an entire set.  

          The cost of the sets can vary greatly depending on the size of  
          the project and the size of the bid set.  A large project can  
          have several hundreds pages of drawings and fill large binders  
          with printed material.  For example:

          - A $3.5 million CalFIRE fire station in Colfax was $110 per bid  
          set.  29 contractors and subcontractors purchased sets of plans  
          at a total cost of $3,250.  
          - A $40 million renovation of the Library and Courts project was  
          $350 per bid set.  70 contractors and subcontractors purchased  
          sets of plans at a total cost of $25,000. 

          If contractors, subcontractors or suppliers paid a deposit that  
          was refundable, the contracting entity would incur the cost of  
          printing those sets of construction documents.  The practical  
          effect of this would be for the contracting entity to increase  
          the cost of the project in order to recover this cost.  Whether  
          such increases would be recovered by increased bidder interest  










          and lower bids is unknown as is whether, using the example of  
          the CalFIRE fire station, $110 for a bid set discourages  
          bidding.   

          Charging a fee for contract documents may serve to limit the  
          interest in bidding on a project to bidders with adequate  
          resources.  Making contract documents available without charge  
          would likely increase the number of contract documents  
          requested.  Currently, persons typically wait until after the  
          mandatory bid walk or a review of the free plans at the builders  
          exchange before paying for contract documents.