BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1341|
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                                 THIRD READING


          Bill No:  SB 1341
          Author:   Price (D)
          Amended:  5/11/10
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  7-1, 5/4/10
          AYES:  Lowenthal, Huff, DeSaulnier, Harman, Kehoe, Pavley,  
            Simitian
          NOES:  Ashburn
          NO VOTE RECORDED:  Oropeza


           SUBJECT  :    Los Angeles County Metropolitan Transportation  
          Authority: 
                      contracting practices

           SOURCE  :     Author


           DIGEST  :    This bill enacts provisions applicable to the  
          Los Angeles County Metropolitan Transportation Authority  
          relative to preferences in contracting for small business  
          enterprises, as defined.

           ANALYSIS  :    In 1996, California voters approved  
          Proposition 209, which amended the California Constitution  
          to preclude granting preferences on the basis of race, sex,  
          color, ethnicity, or national origin in the operation of  
          public employment, public education, or public contracting.  
           The provision does not apply to federal contracting  
          requirements.  In response to Proposition 209, the Los  
          Angeles County Metropolitan Transportation Authority  
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          (METRO) adopted a local ordinance that provides a  
          preference to small businesses and is not inconsistent with  
          the provisions of Proposition 209.  This bill endeavors to  
          codify the small business preference requirements.

          Existing law governing METRO procurement:

          1. Requires that construction contracts in excess of  
             $25,000 be awarded to the lowest responsible bidder.

          2. Requires that contracts involving the purchase of  
             supplies, equipment, and materials in excess of $100,000  
             be awarded to the lowest responsible bidder or to the  
             bidder that provides "best value" to METRO.  To award  
             contracts on the basis of best value METRO must include  
             in the solicitation for a bid the evaluation criteria  
             that will be used to determine best value. 

          3. Defines value as the "overall combination of quality,  
             price, and other elements of a proposal that, when  
             considered together, provide the greatest overall  
             benefit in response to requirements described in the  
             solicitation documents." 
           
           This bill:

          1. Adds to existing law the requirement that successful  
             bids for construction contracts and bids for supplies,  
             equipment, and materials must be "responsive" to the  
             terms of the bid solicitation documents as well as low  
             cost.  This condition is also added to best value  
             procurements.

          2. Authorizes METRO to grant a small business preference on  
             contracts with a value in excess of $100,000 for the  
             construction component of a design-build team, the  
             procurement of goods, or the delivery of services a five  
             percent bidding preference to the lowest responsive and  
             responsible bidder or best value proposer, if the firm  
             is a small businesses and a prime contractor. 

          3. Establishes for the lowest responsive and responsible  
             bidder or best value proposer a subcontracting  
             participation goal for small businesses of five percent  







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             on contracts with a value in excess of $100,000 and  
             financed with nonfederal funds.

          4. Requires bidders and proposers to make a good faith  
             effort to secure the services of small business  
             enterprises and establishes procedures to demonstrate a  
             good faith effort, including requiring attendance at  
             pre-bid conferences, identification of services and  
             skills available to small business subcontractors,  
             advertising for services and in trade publications,  
             assisting potential subcontractors in obtaining bonds  
             and insurance, and other related conditions. 

          5. Defines a small business enterprise as meeting the  
             definitions of the United States Small Business  
             Administration appropriate to the type of work.

           Comments  

           Purpose of the bill  .  The purpose of this bill is to create  
          a process to establish a small business participation goal  
          of five percent for construction projects, services, and  
          the acquisition of supplies funded with local, state, or  
          other nonfederal sources of revenue.  Under the terms of  
          the California Constitution business participation goals  
          associated with public contracting cannot be race or gender  
          based.  This bill meets that test. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

           SUPPORT  :   (Verified  5/4/10) (Unable to reverify)

           Los Angeles County Chapter of the American Council of  
            Engineering Companies of California
          ACE Fence Company
          AGS Architects
          Aviva Spectrum
          CK Management
          Integrated Engineering Management
          Langford and Carmichael
          Lenax Construction Services
          PJS&P Associates
          R-T Welding and Fabrication







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          Selbert Perkins Design
          Ultra Systems
          Wincal Technology


          JJA:mw  5/12/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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