BILL ANALYSIS Ó
AB 720
Page 1
ASSEMBLY THIRD READING
AB 720 (Hall)
As Amended May 9, 2011
Majority vote
LOCAL GOVERNMENT 7-0
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|Ayes:|Smyth, Alejo, Bradford, | | |
| |Campos, Hueso, Knight, | | |
| |Norby | | |
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SUMMARY : Prohibits a public agency that opts in to the Uniform
Public Construction Cost Accounting Act (UPCCAA) from utilizing
as an alternative procedure those statutory provisions that
apply to contracts by county boards of supervisors (BOS) and
county road commissioners for the construction of a county
highway. Specifically, this bill :
1)Prohibits a public agency that opts in to UPCCAA from
utilizing as an alternative procedure those statutory
provisions that apply to contracts by a BOS and county road
commissioners for the construction of a county highway.
2)Increases the force account cap under UPCCAA from $30,000 to
$45,000, and increases the formal bidding threshold under
UPCCAA from $125,000 to $175,000.
EXISTING LAW :
1)Authorizes public agencies to opt in to UPCCAA.
2)Requires public agencies who opt in to UPCCAA to use the
following thresholds:
a) Public projects of $30,000 or less are authorized to be
performed by the employees
of a public agency by force account, negotiated contract, or
by purchase order;
b) Public projects of $125,000 or less are authorized to be
let to contract by informal procedures as established under
UPCCAA; and,
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c) Public projects of more than $125,000 are required to be
let to contract by formal bidding procedure, except as
otherwise provided in UPCCAA.
1)Requires the Uniform Public Construction Cost Accounting
Commission (Commission) to review the accounting procedures of
a participating public agency when an interested party
presents evidence that the work undertaken by the public
agency falls within any of the following categories:
a) The work is to be performed by a public agency after
rejecting all bids, claiming work can be done less
expensively by the public agency;
b) The work exceeded the force account limits; or,
c) The work has been improperly classified as maintenance.
1)Authorizes a BOS to enter into contracts for the construction,
repair, or maintenance of a county highway, and includes an
authorization for a BOS to delegate some of this authority to
its county road commissioner under specified circumstances.
2)Specifies that a BOS is authorized to direct a road
commissioner or a registered civil engineer under the
direction of the county director of transportation to have any
work upon county highways done in one of five ways:
a) By letting a contract covering both work and material,
with the contract let to the lowest responsible bidder;
b) By purchasing the material and letting a contract for
the performance of the work, with the material bought at
the lowest possible cost and the contract let to the lowest
responsible bidder;
c) By purchasing the material and having the work done by
day labor, in which case advertising for bids is not
required;
d) By authorizing the county road commissioner or a
registered civil engineer under the direction of the county
director of transportation to execute changes for any
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contract in an amount not to exceed $5,000 for contracts of
$50,000 or less, or 10% for contracts over $50,000 but not
to exceed $250,000. For contracts whose original cost
exceeds $250,000, the extra cost for any change or addition
to the work so ordered cannot exceed $25,000, plus 5% of
the amount of the original contract costs in excess of
$250,000; or,
e) By purchasing the material and letting a contract for
the work or by letting a contract covering both work and
material without advertising for bids when the estimated
cost
of emergency work necessitated by the imminence or occurrence
of a landslide, flood, storm damage, or other emergency
exceeds $25,000 and the public interest and necessity
demand immediate action to safeguard life, health, or
property.
FISCAL EFFECT : None
COMMENTS : The Public Contract Code spells out the procedures
that public agencies are required to follow when they build
public works projects, including limits on the contracts'
values. However, when public agencies voluntarily use UPCCAA,
they can use their own employees for projects worth $30,000 or
less. Projects worth $125,000 or less require informal bidding
and those worth more than $125,000 require formal bidding.
UPCCAA requires the Commission to review these limits to account
for higher costs every five years. If the Commission recommends
higher limits, the State Controller promulgates the new limits.
The Commission and the Controller last raised these limits in
2005, with them taking effect in 2007.
Under UPCCAA, there is an express authorization in Public
Contract Code Section 22031 for a BOS to use the alternative
procedures outlined for county highway work in Article 25
(commencing with Section 20390) of the Public Contract Code.
For most local agencies, state law imposes caps on the dollar
amount of public works projects that can be completed with local
government employees (i.e., force accounts) or day labor.
Projects that exceed the cap generally are required to be put
out to bid to the private sector and awarded to the lowest
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responsible bidder. Similar requirements are in place for state
agencies as well.
Existing law makes an exception, however, for counties that have
road commissioners or that have registered civil engineers
working under the authority of a county transportation director.
These counties have virtually unlimited authority to use day
labor or force account for highway projects. In fact, in an
Attorney General (A.G.) opinion (11 Op.Atty.Gen. 73), the AG
opined that work on county bridges may be performed without the
necessity of advertising for bids.
Counties without road commissioners are limited to doing work by
force account or day labor to contracts costing $25,000 or less.
The practical effect of this bill will be local agencies will
have to choose between UPCCAA and Public Contract Code Section
20395, which allows county road commissioners to use force
account for purposes of county highway construction.
With regard to California Court of Appeal Section 20395 in
Copeland v. Kern County (1951) 105 Cal.App.2d 821, ruled that
the words "day labor" in Streets and Highways Code Section 1075
(now codified as Section 20395) did not preclude regular trained
road crews
of a county from engaging in work pursuant to its provisions and
did not contemplate that only inexperienced and casual day
laborers were to be hired. Furthermore, the Court of Appeal
ruled, a county could use regular road crews and prisoners from
county road camps, as well as casual employees that were
available for this work. Thus, county road commissioners have
been authorized since that 1951 court of appeal decision to use
force account for the construction and maintenance of county
highways.
According to the author, this bill would end confusion with
regard as to whether public agency optees of UPCCAA can utilize
other aspects of the Public Contract Code. This bill, the
author says, will provide clarity that the county road
commissioner authorization in other provisions of the Public
Contract Code would apply only for purposes of maintenance and
emergency work. The author says public agencies still are free
to make a choice as to how they wish to perform county highway
and road construction projects: either by opting in to UPCCAA
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or by using the county road commissioner provisions.
Furthermore, the author says this bill raises the force account
limit under UPCCAA to offset any suggestion of job loss to the
public employee unions.
Counties say the county road commissioner authority to use force
account for county highway construction saves them money, time,
and effort necessary to prepare plans, specifications, and
contract documents for bidding out minor repair and construction
or renovation projects. It also allows them a faster delivery
time. The County of Del Norte says it would have to reduce its
public works department by as many as 10 positions if this bill
becomes law. This would have a ripple effect throughout the
department for its obligations ranging from road maintenance to
safety obligations.
AB 943 (Williams), pending in the Assembly, would increase the
formal bidding threshold under UPCCAA from $125,000 to $175,000.
Support arguments: Supporters say the ability to use the county
road commissioner authority while also being a signatory to
UPCCAA is in conflict with good public policy and eliminates the
opportunity for contractors to bid on work.
Opposition arguments: Opposition says the county road
commissioner authority provides county transportation
departments with the necessary flexibility to address local
issues and AB 720 would unfairly tie the hands of public
agencies.
Analysis Prepared by : Jennifer Klein Baldwin / L. GOV. /
(916) 319-3958
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