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