BILL ANALYSIS Ó
AB 720
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 720 (Hall)
As Amended July 12, 2011
Majority vote
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|ASSEMBLY: |49-18|(May 31, 2011) |SENATE: |38-0 |(August 18, |
| | | | | |2011) |
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Original Committee Reference: L. GOV.
SUMMARY : Revises the Uniform Public Construction Cost
Accounting Act (UPCCAA) road commissioner exemption.
The Senate amendments :
1)Remove the prohibition and instead, authorize, beginning
January 1, 2013, a board of supervisors (BOS) or a county road
commissioner for a county with a population of 50,000 or more
to use, as an alternative to procedures in the UPCCAA,
specified statutory county road commissioner alternative
procurement procedures for both:
a) Maintenance and emergency work; and,
b) New road construction and road reconstruction as long as
the total annual value of the new road construction and the
road reconstruction performed by day labor, as specified in
state law, does not exceed 30% of the total value of all
work performed by force account other than maintenance as
reported in the State Controller's Streets and Roads Annual
Report as of January 1 of each year.
2)Provide that on or after January 1, 2013, the UPCCAA does not
prohibit a BOS or a county road commissioner for a county with
a population of less than 50,000 from using, as an alternative
to procedures in the Uniform Public Construction Cost
Accounting Act, specified statutory county road commissioner
alternative procurement procedures.
3)Require a county BOS or county road commissioner to declare,
in advance, its intention to use county road commissioner
alternative procurement procedures for new road construction
and road reconstruction.
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4)State that specified UPCCAA requirements governing a public
agency's rejection of bids apply to any county that is subject
to the bill's provisions.
5)Authorize the governing body of a public agency on a
four-fifths vote to award a contract at $187,500, or less, to
the lowest responsible bidder if the following occur:
a) All bids received under informal bidding procedures are
in excess of $175,000; and,
b) The governing body determines the cost estimate of the
public agency was reasonable.
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,
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
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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
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
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necessity demand immediate action to safeguard life,
health, or property.
AS PASSED BY THE ASSEMBLY , this bill:
1)Prohibited 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, except for the following:
a) Maintenance and emergency work; and,
b) New road construction and road reconstruction as long as
the total annual value of the new road construction and the
road reconstruction does not exceed 20% of the total value
of all work performed by force account other than
maintenance as reported in the State Controller's Streets
and Roads Annual Report as of January 1 of each year.
2)Increased the force account cap under UPCCAA from $30,000 to
$45,000, and increased the formal bidding threshold under
UPCCAA from $125,000 to $175,000.
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
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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
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 (AG) 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.
While this bill does allow for some force account work on new
road construction and road reconstruction, the 30% cap means the
practical effect of this bill will be counties with a population
of 50,000 or more will have to choose between UPCCAA and Public
Contract Code Section 20395, which allows county road
commissioners to use force account for purposes of all county
highway construction. Because some counties would be required
to limit their force account road work to the prior year's State
Controller's report, these counties could be severely
hamstringed. For instance, if a county did very little road
work by force account that did not involve maintenance the prior
year, but in the current year faces a situation that requires a
large amount of road reconstruction, then that county would be
limited to 30% of that lower amount from the prior year
regardless of the circumstance.
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
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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
or by using the county road commissioner provisions
Support arguments: Supporters could say that the bill preserves
small counties' flexibility to use the road commissioner
alternative procurement procedures when necessary, while giving
private construction firms more opportunities to bid on large
road construction projects.
Opposition arguments: Opposition might say the county road
commissioner authority provides county transportation
departments with the necessary flexibility to address local
issues and this bill would unfairly tie the hands of some public
agencies.
Analysis Prepared by : Jennifer Klein Baldwin and Katie
Kolitsos / L. GOV. / (916) 319-3958
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