BILL NUMBER: AB 2440	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 18, 2012
	AMENDED IN ASSEMBLY  MAY 1, 2012
	AMENDED IN ASSEMBLY  APRIL 12, 2012

INTRODUCED BY   Assembly Member Bonnie Lowenthal

                        FEBRUARY 24, 2012

   An act to amend Sections 130232 and 130242 of,  to add Section
130051.22 to,  and to repeal Sections 130051.21 and 130243 of,
the Public Utilities Code, relating to transportation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2440, as amended, Bonnie Lowenthal. Los Angeles County
Metropolitan Transportation Authority: contracting.
   (1) Existing law creates the Los Angeles County Metropolitan
Transportation Authority, with specified powers and duties. Existing
law requires a contract by the authority for a purchase of supplies,
equipment, or materials with the purchase price exceeding $100,000 to
be let to the lowest responsible bidder, or best value proposer.
   This bill would increase that amount to $150,000.
   (2) Existing law requires the authority to obtain a minimum of 3
quotations when the expected expenditure exceeds $3,000 but not
$100,000.
   This bill would increase the upper limit of $100,000 to $150,000.

   (3) Existing law allows the authority, on certain contracts above
$100,000, to take various actions to facilitate contract awards to
small businesses.  
   This bill would, in this regard, delete the requirement for the
contracts to be above $100,000.  
   (3) 
    (4)  Existing law provides for the inspector general of
the authority to prepare a prequalification questionnaire to be
completed by certain potential contractors. Existing law requires the
authority to adopt a change order procedure meeting certain
requirements.
   This bill would repeal these provisions.  The bill would enact
new provisions authorizing the authority to establish and maintain a
prequalification program for bidders on certain contracts and
providing for the authority to require prospective bidders for
construction projects to complete and submit a standarized
questionnaire and financial statement, as specified. The bill would
state legislative intent with regard to the authority's construction
change order and related claims process. By imposing new
prequalification requirements on the authority, the bill would impose
a state-mandated local program.  
   (4) 
    (5)  Existing law authorizes the authority to enter into
contracts with private entities that combine into a single contract
all or some of the planning, design, permitting, development, joint
development, construction, construction management, acquisition,
leasing, installation, and warranty of some or all components of
transit systems and certain facilities. Existing law requires a
contract under these provisions to be let to the lowest responsible
bidder, with a notice requesting bids required to be published in a
newspaper of general circulation at least 60 days before receipt of
bids.
   This bill would allow the authority to select a contractor under
these provisions using  objective  selection criteria in
addition to  cost   price  . This bill
would retain the 60-day publication requirement for contracts
estimated to exceed $10,000,000, but would otherwise impose a 30-day
requirement. This bill, in the case of the design of projects
permitting the selection of subcontractors, would require the
contractor to competitively bid those portions and provide the
authority with a list of subcontractors, as specified. Once on the
list, the bill would provide that the subcontractors shall have the
rights provided under a certain part of the Public Contract Code.

   (6) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature finds and declares that
the Los Angeles County Metropolitan Transportation Authority
(LACMTA) should include in its contracting documents, processes,
terms and conditions to resolve construction change orders and
related claims. The Legislature further finds and declares that
LACMTA has solicited input from major construction contractors, small
businesses, the Department of Transportation, and peer agencies to
identify best practices and improve its change order process and
should continue to gather input and improve this process. 
   SECTION 1.   SEC. 2.   Section 130051.21
of the Public Utilities Code, as added by Section 4.3 of Chapter 10
of the Statutes of 1996, is repealed.
   SEC. 3.    Section 130051.22 is added to the 
 Public Utilities Code   , to read:  
   130051.22.  (a) The authority may establish and maintain a
prequalification program for bidders on contracts not covered by
subdivision (b).
   (b) On public projects, as defined in subdivision (c) of Section
22002 of the Public Contract Code, the authority shall require, at a
minimum, that prospective bidders for a construction contract
complete and submit to the authority a prequalification standardized
questionnaire and financial statement in a form specified by the
authority, pursuant to subdivision (a) of Section 20101 of the Public
Contract Code. 
   SEC. 2.   SEC. 4.   Section 130232 of
the Public Utilities Code is amended to read:
   130232.  (a) Except as provided in subdivision (f), purchase of
all supplies, equipment, and materials, and the construction of all
facilities and works, when the expenditure required exceeds
twenty-five thousand dollars ($25,000), shall be by contract let to
the lowest responsible bidder. Notice requesting bids shall be
published at least once in a newspaper of general circulation. The
publication shall be made at least 10 days before the date for the
receipt of the bids. The commission, at its discretion, may reject
any and all bids and readvertise.
   (b) Except as provided for in subdivision (f), whenever the
expected expenditure required exceeds one thousand dollars ($1,000),
but not twenty-five thousand dollars ($25,000), the commission shall
obtain a minimum of three quotations, either written or oral, that
permit prices and terms to be compared.
   (c) Where the expenditure required by the bid price is less than
fifty thousand dollars ($50,000), the executive director may act for
the commission.
   (d) All bids for construction work submitted pursuant to this
section shall be presented under sealed cover and shall be
accompanied by one of the following forms of bidder's security:
   (1) Cash.
   (2) A cashier's check made payable to the commission.
   (3) A certified check made payable to the commission.
   (4) A bidder's bond executed by an admitted surety insurer, made
payable to the commission.
   (e) Upon an award to the lowest bidder, the security of an
unsuccessful bidder shall be returned in a reasonable period of time,
but in no event shall that security be held by the commission beyond
60 days from the date that the award was made.
   (f) The following provisions apply only to the Los Angeles County
Metropolitan Transportation Authority:
   (1) The contract shall be let to the lowest responsible bidder or,
in the authority's discretion, to the person who submitted a
proposal that provides the best value to the commission on the basis
of the factors identified in the solicitation when the purchase price
of all supplies, equipment, and materials exceeds one hundred fifty
thousand dollars ($150,000). "Best value" means 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. The
contract shall be let to the lowest responsible bidder when the
purchase price of the construction of all facilities exceeds
twenty-five thousand dollars ($25,000).
   (2) The authority shall obtain a minimum of three quotations,
either written or oral, that permit prices and terms to be compared
whenever the expected expenditure required exceeds three thousand
dollars ($3,000), but not one hundred fifty thousand dollars
($150,000).
   (3) The authority may purchase supplies, equipment, and materials
from a public auction sale, including public auctions held via the
Internet, using the procedures established for all other participants
in the public auction.
   (4) The authority may participate in a procurement agreement
involving other public entities that is identified by a procuring
public entity or entities as a cooperative procuring agreement from
which other public entities may make purchases or enter into
contracts, and the authority may procure, and enter into contracts
for, items purchased pursuant to that procurement agreement,
notwithstanding that the authority may not be the procuring public
entity, provided the procurement agreement is awarded or entered into
by either of the following:
   (A) One or more public entities or an organization of public
entities, which may include the authority.
   (B) A federal, state, or local public entity.
   (5) (A) Notwithstanding any other provision of law requiring the
authority to award contracts to the lowest responsible bidder,
 on contracts above one hundred thousand dollars ($100,000),
 the authority may, except as to contracts for professional
services involving private architectural, landscape architectural,
engineering, environmental, land surveying, or construction
management as defined in Sections 4525 and 4529.10 of the Government
Code, do any of the following in facilitating contract awards to
small businesses:
   (i) Provide for a small business preference in construction, the
construction component of a design-build team, the procurement of
goods, or the delivery of services. The preference to a small
business shall be 5 percent of the lowest responsible bidder meeting
specifications that provide for small business participation.
   (ii) Establish a subcontracting participation goal for small
businesses on contracts financed with nonfederal funds and grant a
preference of 5 percent to the lowest responsible bidders who meet
the goal.
   (iii) Require bidders to make a good faith effort, in accordance
with the criteria established pursuant to subparagraph (B), prior to
the time bids are opened, to comply with the goals and requirements
established by the authority relating to participation in the
contract by small businesses.
   (B) The following shall apply to bidders under this paragraph:
   (i) The bidder attended any presolicitation or prebid meetings
that were scheduled by the authority to inform all bidders of the
small business enterprise program requirements for the project for
which the contract will be awarded. The authority may waive this
requirement if it determines that the bidder is informed as to those
program requirements.
   (ii) The bidder identified and selected specific items of the
project for which the contract will be awarded to be performed by
small business enterprises to provide an opportunity for
participation by those enterprises.
   (iii) The bidder advertised, not less than 10 calendar days before
the date the bids are opened, in one or more daily or weekly
newspapers, trade association publications or trade-oriented
publications, trade journals, or other media, specified by the
authority for small business enterprises that are interested in
participating in the project. This clause applies only if the
authority gave public notice of the project not less than 15 calendar
days prior to the date the bids are opened.
   (iv) The bidder provided written notice of his or her interest in
bidding on the contract to the number of small business enterprises
required to be notified by the project specifications not less than
10 calendar days prior to the opening of bids. The authority shall
make available to the bidder not less than 15 calendar days prior to
the date the bids are opened a list or a source of lists of
enterprises which are certified by the authority as small business
enterprises.
   (v) The bidder followed up initial solicitations of interest by
contacting the enterprises to determine with certainty whether the
enterprises were interested in performing specific items of the
project.
   (vi) The bidder provided interested small business enterprises
with information about the plans, specifications, and requirements
for the selected subcontracting or material supply work.
   (vii) The bidder requested assistance from small business
community organizations; small business contractor groups; local,
state, or small business assistance offices; or other organizations
that provide assistance in the recruitment and placement of small
business enterprises, if any are available.
   (viii) The bidder negotiated in good faith with the small business
enterprises, and did not unjustifiably reject as unsatisfactory bids
prepared by any small business enterprises, as determined by the
authority.
   (ix) Where applicable, the bidder advised and made efforts to
assist interested small business enterprises in obtaining bonds,
lines of credit, or insurance required by the authority or
contractor.
   (x) The bidder's efforts to obtain small business enterprise
participation could reasonably be expected by the authority to
produce a level of participation sufficient to meet the goals and
requirements of the authority.
   (C) "Small business enterprise" as used in this paragraph, means a
business enterprise that is classified as a small business under
United States Small Business Administration rules and meets the
current small business enterprise size standards found in  13
CFR  Part 121  of Title 13 of the Code of Federal
Regulations  appropriate to the type of work the enterprise
seeks to perform. The authority may establish limitations regarding
the average annual gross receipts of a small business over the
previous three fiscal years and establish limitations regarding the
personal net worth of the owner of the small business, exclusive of
the value of the owner's personal residence.
   SEC. 3.   SEC. 5.   Section 130242 of
the Public Utilities Code is amended to read:
   130242.  (a) In addition to the other powers it possesses, the Los
Angeles County Metropolitan Transportation Authority may enter into
contracts with private entities, the scope of which may combine
within a single contract all or some of the planning, design,
permitting, development, joint development, construction,
construction management, acquisition, leasing, installation, and
warranty of all or components of (1) transit systems, including,
without limitation, passenger loading or intermodal station
facilities, and (2) facilities on real property owned or to be owned
by the authority.
   (b) The authority may award contracts pursuant to subdivision (a)
after a finding, by a two-thirds vote of the members of the
authority, that awarding the contract under this section will achieve
for the authority, among other things, certain private sector
efficiencies in the integration of design, project work, and
components.
   (c) A contract awarded pursuant to this section may include
operation and maintenance elements, if the inclusion of those
elements (1) is necessary, in the reasonable judgment of the
authority, to assess vendor representations and warranties,
performance guarantees, or life-cycle efficiencies, and (2) does not
conflict with collective bargaining agreements to which the authority
is a party.
   (d) Any construction, alteration, demolition, repairs  , 
or other works of improvement performed under a contract awarded
pursuant to this section shall be considered a public works project
subject to Chapter 1 (commencing with Section 1720) of Part 7 of
Division 2 of the Labor Code, and shall be enforced by the Department
of Industrial Relations in the same way it carries out this
responsibility under the Labor Code.
   (e) A contract under this section shall be let to the lowest
responsible bidder whose bid is responsive to the criteria set forth
in the invitation for bids, or, at the authority's discretion, to a
contractor chosen by a competitive bidding process that employs 
objective  selection criteria  that may include, but are not
limited to, the proposed design approach, features, functions,
life-cycle costs, and other criteria deemed appropriate by the
authority, in addition to  cost   price
 . Notice requesting bids or proposals shall be published at
least once in a newspaper of general circulation. For contracts
estimated to exceed ten million dollars ($10,000,000), publication
shall be made at least 60 days before the receipt of the bids or
price proposals. For contracts estimated not to exceed ten million
dollars ($10,000,000), publication shall be made at least 30 days
before the receipt of the bids or price proposals. The authority, at
its discretion, may reject any and all bids and proposals, and may
readvertise. All bids and price proposals submitted pursuant to this
section shall be presented under sealed cover and shall be
accompanied by one of the following forms of bidder security: (1)
cash, (2) a cashier's check made payable to the authority, (3) a
certified check made payable to the authority, or (4) a bidder's bond
executed by an admitted surety insurer, made payable to the
authority. Upon an award, the security of each unsuccessful bidder
shall be returned in a reasonable period of time, but in no event
shall that security be held by the authority beyond 60 days from the
time the award is made.
   (f) When the design of portions of the project permits the
selection of subcontractors, the contractor shall competitively bid
those portions. The contractor shall provide to the authority a list
of subcontractors whose work is in excess of one-half of 1 percent of
the total project cost as soon as the subcontractors are identified.
Once listed, the subcontractors shall have the rights provided in
the Subletting and Subcontracting Fair Practices Act (Chapter 4
(commencing with Section 4100) of Part 1 of Division 2 of the Public
Contract Code).
   SEC. 4.   SEC. 6.   Section 130243 of
the Public Utilities Code is repealed.
   SEC. 7.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.