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 _________________________________________________________________ ____ 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. _________________________________________________________________ ____ 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 _________________________________________________________________ ____ 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.