BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2036
                                                                  Page  1

          Date of Hearing:   August 30, 2010

                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
                                Cameron Smyth, Chair
               AB 2036 (Bill Berryhill) - As Amended:  August 27, 2010
           
          SUBJECT  :   Public contracts: contract document distribution.

           SUMMARY  :  Requires state departments and local agencies to  
          provide at no charge an electronic copy of the project's  
          contract documents to a contractor plan room service upon  
          request from the contractor plan room service.  

           The Senate amendments  delete the Assembly version of this bill,  
          and instead:

          1)Require state departments, upon request from a contractor plan  
            room service, to provide at no charge an electronic copy of a  
            project's contract documents to the contractor plan room  
            service.  

          2)Require local agencies when taking bids for the construction  
            of a public work or improvement to distribute at no charge an  
            electronic copy of the project's contract documents to a  
            contractor plan room upon request from the contractor plan  
            room service.  

           EXISTING LAW  :

          1)The State Contract Act (Act) governs contract practices  
            between state departments and private contractors.

          2)The Act defines "project" to include the erection,  
            construction, alteration, repair, or improvement of any state  
            structure, building, road, or other state improvement of any  
            kind that will exceed a total cost of $250,000.

          3)The Act defines "department" to mean the Department of Water  
            Resources, the Department of General Services, the Department  
            of Boating and Waterways, the Department of Corrections and  
            Rehabilitation, the Military Department, and the Department of  
            Transportation.

          4)The Local Agency Public Construction Act sets forth the  
            procedures local agencies are required to use when soliciting  








                                                                  AB 2036
                                                                  Page  2

            and evaluating bids or proposals for the construction of a  
            public work or improvement.

           AS PASSED BY THE ASSEMBLY  , this bill limited the existing right  
          of public entities to withhold payment to contractors and  
          subcontractors when a stop notice is received to provide for  
          reasonable litigation costs associated with the stop notice such  
          that the right could be exercised only if the original  
          contractor fails to promptly accept a tender of defense of the  
          public entity in the litigation.
                                                                           
           FISCAL EFFECT  :  Unknown

           
          COMMENTS  :  

          1)According to the author's office, "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.  That fee is often between $100 and $500  
            per project.

          The author notes 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  
            take the plans and specifications after paying a deposit,  
            which was returned if the plans were returned to the public  
            entity in good condition.  

          The author also states that many construction firms are often  
            too small to pay non-refundable charges for plans and other  
            bid documents, thus reducing the competition for these bids  
            and potentially driving up the overall contract price for  
            public entities.  Furthermore, small, minority, and  
            women-owned businesses are among those firms unable to compete  
            because of these charges.

          2)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.  The author notes these  
            contractor plan rooms do not have the resources to purchase  
            plans and other bid documents from public entities.   








                                                                  AB 2036
                                                                  Page  3

            Electronic plans and documents avoid the cost of printing for  
            the public entity, and the construction industry can easily  
            accept and utilize these documents.

           3)Support Arguments  :  Supporters might say this bill would make  
            it economically feasible for more businesses to submit bids  
            for the construction of a public work or improvement.

           Opposition Arguments  :  Opposition might say this bill would  
            increase personnel time for public entities when bidding out  
            for the construction of a public work or improvement. 

           
















          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          American Fence Association, CA Chapter
          Associated General Contractors
          CA Fence Contractors' Association
          CA Legislative Conference of the Plumbing, Heating and Piping  
          Industry
          Engineering Contractors' Association
          Flasher/Barricade Association
          Golden State Builders' Exchanges
          Marin Builders' Association
          National Electrical Contractors Association, CA Chapter
           
          Opposition 








                                                                 AB 2036
                                                                  Page  4

           
          None on file
           
          Analysis Prepared by  :    Jennifer R. Klein / L. GOV. / (916)  
          319-3958