BILL ANALYSIS SB 1341 Page 1 Date of Hearing: June 28, 2010 ASSEMBLY COMMITTEE ON TRANSPORTATION 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 following: 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 services). 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 SB 1341 Page 2 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 requirements; vii)The bidder requested assistance from the small business community organizations, small business contractor groups, and other small business-oriented organizations; viii)The bidder negotiated in good faith with small businesses; 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 contracting. 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 SB 1341 Page 3 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. REGISTERED SUPPORT / OPPOSITION : Support Los Angeles County Metropolitan Transportation Authority SB 1341 Page 4 (sponsor) 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 Opposition None on file Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093