BILL ANALYSIS Ó
AB 2440
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ASSEMBLY THIRD READING
AB 2440 (Bonnie Lowenthal)
As Amended May 1, 2012
Majority vote
LOCAL GOVERNMENT 7-1 TRANSPORTATION 11-0
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|Ayes:|Smyth, Alejo, Bradford, |Ayes:|Bonnie Lowenthal, |
| |Davis, Gordon, Hueso, | |Achadjian, Blumenfield, |
| |Norby | |Bonilla, Buchanan, Eng, |
| | | |Carter, Galgiani, Miller, |
| | | |Portantino, Solorio |
|-----+--------------------------+-----+--------------------------|
|Nays:|Knight | | |
| | | | |
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SUMMARY : Expands the design-build authority of the Los Angeles
County Metropolitan Transportation Authority (MTA) to permit the
use of "best value" methodology and shorten notice requirements
for projects costing under $10 million, and raises certain
contracting thresholds for other uses of the "best value" method.
Specifically, this bill :
1)Repeals provisions unique to MTA that require its inspector
general to prepare a prequalification questionnaire for any
business seeking to provide goods or services under contract
with MTA.
2)Raises the threshold from $100,000 to $150,000 for purchases of
supplies, equipment and materials that may be selected under a
"best value" methodology.
3)Raises the upper threshold from $100,000 to $150,000 under which
MTA can use an informal procurement process based on a minimum
of three quotations.
4)Authorizes MTA to award design-build contracts based on a
competitive bidding process that employs selection criteria in
addition to cost.
5)Requires, for design-build contracts estimated to cost over $10
million, a request for bids or proposal to be advertised at
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least 60 days in advance. For design-build contracts estimated
to cost under $10 million, a request for bids or proposal must
be advertised at least 30 days in advance.
6)Requires the contractor on a design-build contract to
competitively bid those portions of the design work that can be
subcontracted.
7)Requires the contractor to provide to MTA a list of
subcontractors whose work is over one-half of one percent of the
total project cost, as soon as subcontractors are identified.
8)Provides that, once subcontractors are listed, they should have
the same rights as provided for in the Subletting and
Subcontracting Fair Practices Act.
9)Repeals the requirement that MTA adopt a change order procedure
for its contracts.
FISCAL EFFECT : None
COMMENTS : This bill makes four separate changes to MTA's
contracting authority, including minor expansions of MTA's use of
design-build and "best value" contracting methodologies. The
measure is sponsored by MTA.
Section 1 of the bill deletes the requirement that MTA's inspector
general develop a pre-qualification questionnaire for prospective
contractors. According to the author, "Subsequently, in 1999 AB
574 was passed creating a more general authority for
prequalification in Public Contract Code Section 20101 which
applies to all 'public entities.'
"Removing the ÝMTA] specific law would reduce the burden on
prospective bidders of having
to comply with ÝMTA]-unique requirements and would eliminate a
potential conflict raised by the requirement in PUC 130051.21 (a)
that the ÝMTA] Inspector General draft the pre-qualification
questionnaire, which leaves the office of the IG in the position
of inspecting its own work product."
Section 2 of the bill raises two contracting thresholds: a) for
the purchase of supplies, equipment and materials that may be
selected under a "best value" methodology, the limit goes from
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$100,000 to $150,000; and, b) for contracts where MTA may use an
informal procurement process based on a minimum of three
quotations, the upper threshold goes from $100,000 to $150,000.
According to the author, "Ýt]hese changes will allow ÝMTA] to take
advantage of the streamlining opportunities offered by its federal
funding partners by conforming state law to recent changes made in
federal contracting thresholds."
Section 3 of the bill makes a number of changes to MTA's
design-build authority statute (Public Utilities Code Section
130242). First, it gives MTA authority to utilize "best value"
methodology (i.e., using selection criteria other than cost) in
contract selection. The bill further specifies that for contracts
estimated to cost under $10 million, MTA need only publish a
notice requesting bids or proposals at least 30 days before
receipt (contracts in excess of $10 million must still advertise
for 60 days.) Finally, this bill requires the contractor to
competitively bid those portions of the design-work that can be
subcontracted, and to provide MTA with a list of subcontractors
whose work is over one-half of one percent of the total project
cost. Listed subcontractors shall have the same rights provided
in the Subletting and Subcontracting Fair Practices Act.
Relative to the shorter 30 day bid/proposal notice for projects
under $10 million, the author states that "Ýt]he notice period in
this section refers only to the timeframe under which a
solicitation is advertised. This does not impact the timeframe
that proposers have to both review the solicitation documents and
respond to the proposal. ÝMTA] uses a variety of methods to
publish proposals including posting on our webpage and a 60 day
look-ahead at upcoming projects. These methods are more effective
in providing notice of solicitations, are more effective in
targeting potential bidders. Additionally, bidders use these
methods to identify potential opportunities rather than broad
non-targeted newspaper advertising."
Section 4 of the bill simply deletes the requirement that MTA
adopt a change order procedure for contracts. According to the
author, "Ýt]his provision was written at a time when ÝMTA's]
contract administration function was under the control of its
construction department. Since then, however, ÝMTA] is required
by law to have an 'independent professional procurement staff.'
Consequently, this provision is no longer necessary to ensure that
change orders are reviewed appropriately."
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Analysis Prepared by : Hank Dempsey / L. GOV. / (916) 319-3958
FN: 0003444