BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 1341
                                                                  Page 1

          Date of Hearing:  June 28, 2010

                               Bonnie Lowenthal, Chair
                     SB 1341 (Price) - As Amended:  June 15, 2010

           SENATE VOTE  :  28-0
          SUBJECT  :  Los Angeles County Metropolitan Transportation  
          Commission:  small business preferences 

           SUMMARY  :  Authorizes the Los Angeles County Metropolitan  
          Transportation Authority (METRO) to facilitate contract awards  
          to small businesses on contracts over $100,000.  Specifically,  
           this bill  :  

          1)Provides, notwithstanding any other provision of law, METRO  
            may, for contracts in excess of $100,000 and except for  
            private architectural and engineering contracts, facilitate  
            contract awards to small businesses by doing any of the  

             a)   Provide for a 5% small business preference in  
               construction, the construction component of a design-build  
               team, the purchase of goods, or the delivery of services  
               (excluding contracts for architectural and engineering  

             b)   Establish small business goals on non-federally funded  
               projects and grant 5% preference to the lowest bidders  
               meeting the goal.  

             c)   Require bidders to make a good faith effort to comply  
               with small business goals prior to bid opening; for  
               purposes of evaluating a bidder's good faith efforts to  
               comply, the bill sets forth the following criteria:  

                 i)       The bidder attended pre-solicitation or pre-bid  
                   meetings at which the small business enterprise program  
                   requirements were discussed;  

                 ii)The bidder selected specific items of the project for  
                   which small businesses could participate;

                 iii)The bidder advertised for at least 10 days before bid  


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                   opening to solicit small businesses to participate,  
                   with some exceptions;

                 iv)The bidder notified small businesses of his or her  
                   intent to bid the contract;

                 v)       The bidder contacted small business that  
                   indicated interest in bidding on the contract;

                 vi)The bidder provided interested small businesses with  
                   information about project plans, specifications, and  

                 vii)The bidder requested assistance from the small  
                   business community organizations, small business  
                   contractor groups, and other small business-oriented  

                 viii)The bidder negotiated in good faith with small  

                 ix)The bidder, where applicable, helped small businesses  
                   obtain bonds, lines of credit, or insurance; and, 

                 x)       The bidder's efforts to obtain small business  
                   enterprise participation could reasonably be expected  
                   by METRO to produce a level of participation to meet  
                   the goals.  

             d)   Defines "small business enterprise" to mean a business  
               enterprise that is classified as a small business under the  
               United States Small Business Administration rules and meets  
               the current small business enterprise size standards found  
               in state regulations.  

           EXISTING LAW:  

          1)As provided for in the State Constitution, prohibits public  
            institutions from considering race, sex, or ethnicity in the  
            operation of public employment, public education, or public  

          2)Sets forth provisions governing contract and procurement  
            activities of county transportation commissions, including the  
            requirement that contracts over $25,000 for the purchase of  


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            supplies, equipment, and materials and for construction must  
            be awarded to the lowest responsible bidder.  

          3)Sets forth provisions unique to METRO's procurement  
            activities, including the allowance for awarding contracts  
            based on best value.  

          4)As set forth in federal regulations, requires transit agencies  
            (including METRO) to develop an annual disadvantaged business  
            enterprise participation goal on federally funded contracts  
            and report on the level of participation to the Federal  
            Transit Administration and the Federal Highway Administration.  

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  In 1996, California voters approved Proposition 209  
          that 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, 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 and, thus, help small businesses become more  
          competitive in the bid process.  

          According to the author, METRO recently conducted an audit of  
          its minority and small business programs.  Audit findings  
          suggest that METRO should increase its small business enterprise  
          participation on non-federally funded contracts, to be more  
          aligned with the area's business demographics.  

          This bill has been double-referred.  It will be heard in  
          Assembly Local Government prior to being heard in the Assembly  
          Transportation Committee today.  


          Los Angeles County Metropolitan Transportation Authority  


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          Abratique & Associates
          Absolute International Security
          BASE Architecture
          California Testing & Inspections, Incorporated
          California Watershed Engineering
          Choctaw Construction Company, Incorporated
          Community Resources Group
          CSE Technologies, Incorporated
          DMS Engineering & Associates, Incorporated
          Earl Security
          Fleming Alliance Architecture
          Integrated Engineering Management
          JMDiaz, Incorporated
          Katherine Padilla & Associates
          Larry Brown Construction Company, Incorporated
          Lenax Construction Services
          Safeprobe, Incorporated

          None on file

          Analysis Prepared by  :   Janet Dawson / TRANS. / (916) 319-2093