BILL ANALYSIS Ó
AB 2580
Page 1
ASSEMBLY THIRD READING
AB 2580 (Furutani)
As Amended April 16, 2012
Majority vote
BUSINESS & PROFESSIONS 6-3 APPROPRIATIONS 12-5
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|Ayes:|Hayashi, Allen, Butler, |Ayes:|Fuentes, Blumenfield, |
| |Eng, Hill, Ma | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bill Berryhill, Hagman, |Nays:|Harkey, Donnelly, |
| |Smyth | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Extends the sunset date on the Los Angeles Unified
School District's (LAUSD) job order contracting (JOC) pilot
project from December 1, 2012, to December 31, 2020.
Specifically, this bill :
1)Extends the sunset date on the LAUSD's JOC pilot project from
December 1, 2012, to December 31, 2020.
2)Requires the LAUSD, by June 30, 2017, to submit an interim
report on all job order contract projects completed by
December 31, 2016, to the Department of General Services (DGS)
and the Legislature.
3)Requires the LAUSD, by December 31, 2019, to submit a report
describing each job order contract procured and the work
completed under each contract by June 30, 2019, as specified,
to the DGS and the Legislature.
4)Requires the LAUSD to award job order contracts to the most
qualified bidder, instead of the lowest responsive bidder, who
is prequalified and compliant with the LAUSD's project
stabilization agreement (PSA).
5)Specifies that PSA compliance shall constitute no more than
three major violations on any LAUSD project within the past
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three years. If the contractor has more than three
violations, the LAUSD shall seek administrative review of
those violations. Violations include, but are not limited to,
the following:
a) Failure to register core workers with the appropriate
building trade union;
b) Failure to assign apprentices, as specified;
c) Failure to comply with job order contract terms,
including contract amount thresholds, contract duration
limits, and notification requirements before work
commences, as specified; and,
d) Incorrect assignment of work in accordance with the
LAUSD's PSA.
6)Prohibits a job order contractor from working on a job
contract within seven days of issuance, and requires the job
contractor to provide at least seven days' notice to add or
substitute any subcontractor.
7)Requires that any job order changes be compliant with existing
law on allowable job order change amount thresholds, as
specified.
8)Requires the primary job order contractor, instead of LAUSD,
to provide public notice of available work to be subcontracted
by trade, and to notify the LAUSD of the subcontractor
selected. Requires the notification to:
a) Include every subcontractor for all tiers and establish
the authorized subcontractor list for the job order.
Prohibits the commencement of work prior to seven days'
notice of the established subcontract list and any
additions of any subcontractor to the job order;
b) Identify the scope of the work to be performed by each
subcontractor to the job order by craft. If a
subcontractor performs multiple crafts, the job order
contractor shall identify the work of each craft to be
performed; and,
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c) List any substitute subcontractors and the justification
for the substitution, with seven days' notice. Allows the
LAUSD to request a hearing to evaluate the substitution
request, in accordance with the Subletting and
Subcontracting Fair Practices Act (Act).
9)Authorizes the LAUSD to terminate the job order or a
contractor's authorization to proceed with awarded work
subject to the LAUSD's specified administrative due process,
if LAUSD determines the contractor violated the Act.
10)Authorizes the LAUSD to declare the contract ineligible for
future job orders and deny a contractor's prequalification
status for a period of time it determines, if LAUSD determines
the contractor violated the Act.
11)Sunsets the provisions this bill on December 31, 2020.
12)Redefines "job order contract" to mean a contract awarded to
the most qualified bidder, as specified.
13)Makes technical and clarifying changes.
14)Makes legislative findings and declarations related to the
JOC project delivery system being LAUSD-specific to reduce
project costs and expedite project completion, that the
contracts shall be awarded to the most qualified responsible
bidder, and that availability of JOC as a project delivery
method shall not preclude the use of traditional methods of
project delivery if a traditional method results in higher
cost savings.
EXISTING LAW authorizes the LAUSD to use JOC until December 1,
2012.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, negligible fiscal impact.
COMMENTS : According to the author's office, "JOC is set to
sunset on December 1, 2012. The JOC provision was established
as a pilot program to study the benefits of an alternative and
optional procedure for bidding public works projects. The LAUSD
is seeking to extend the pilot program for the LAUSD, as there
are a few areas of improvement that need to be addressed.
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This bill extends the sunset date on the LAUSD's JOC pilot
project from December 1, 2012, to December 31, 2020, creates a
compliance system for JOC, requires that job order contracts be
awarded to the most qualified bidder, and incorporates
prevailing wage, apprenticeship, and notification requirements.
JOC is a contracting procedure intended to accelerate completion
of projects, lower costs, and reduce the complexity of the
contracting process. JOC allows for the awarding of a
competitively bid contract based upon published construction
tasks and unit prices. Rather than bid a total price for the
project, a contractor will bid an adjustment factor, which
reflects specified costs, to the published unit prices. The
unit price, multiplied by the adjustment factor, equals the
final price for any future task.
JOC is generally believed to be well suited to repetitive jobs
and situations in which owners know that many small tasks will
arise, but the timing, type of work, and quantity of work are
unknown at the time the contract is signed. These jobs
typically have minimal design requirements, and design work is
typically accomplished quickly by the job order contractor's
in-house design staff. JOC is not generally viewed as an
appropriate method of contracting for large, complex
construction projects that require extensive or innovative
design or are likely to encounter changes and revisions during
construction.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301
FN: 0003553