BILL ANALYSIS Ó ----------------------------------------------------------------- | | | SENATE COMMITTEE ON NATURAL RESOURCES AND WATER | | Senator Fran Pavley, Chair | | 2011-2012 Regular Session | | | ----------------------------------------------------------------- BILL NO: SB 224 HEARING DATE: April 26, 2011 AUTHOR: Pavley URGENCY: No VERSION: April 14, 2011 CONSULTANT: Dennis O'Connor DUAL REFERRAL: No FISCAL: Yes SUBJECT: Public contracts: Department of Water Resources. BACKGROUND AND EXISTING LAW Under current law, all state contracts must be reviewed and approved by the Department of General Services (DGS), with some notable exceptions. For example, all of CalTrans's contracts are exempt from the DGS review. DGS tries to get back to the contracting department within 10 working days as to whether or not DGS has issues with the contract. If they do, there will be additional time required to work out the details of the contract issues - sometimes just days, sometimes over a month, depending on the issue with the contract. DGS also charges the contracting department for DGS's time - the DGS fee for contracts for last fiscal year was 1.6% of the value of the contract. Some of the Department of Water Resources' (DWR) contracts are exempt from DGS review. They are: Construction Contracts Architecture & Engineering Contracts State Water Project Contracts While those contracts cover a large part of DWR's contract activity, it still leaves a significant number of contracts subject to DGS review. These include contracts for procurement, energy, subscription services, bond funded grant programs, and miscellaneous service contracts. Last fiscal year, DWR spend about $ 21.7 million for non-construction contracting. PROPOSED LAW This bill would exempt from DGS review: 1 Any contract of a type specifically mentioned and authorized to be entered into by DWR under the Water Code. Any contract entered into by DWR that is not funded by money derived from state tax sources, but rather, is funded by money derived from federal and local sources. ARGUMENTS IN SUPPORT According to the author, "Each year, the Department of Water Resources (DWR) enters into hundreds of contracts, often valued in the millions. Despite having an extensive contracting operation staffed by dozens of experienced attorneys and contract specialists, DWR must still have many of its contracts reviewed and approved by the Department of General Services (DGS). This additional level of review delays the execution of contracts and adds unnecessary costs to each contract." "SB 224 will provide DWR the same exception to DGS's contract review that has been given to CalTrans. In doing so, SB 224 will eliminate costly contract delays and unnecessary bureaucratic review." ARGUMENTS IN OPPOSITION: None COMMENTS: None SUGGESTED AMENDMENTS: None SUPPORT Alameda County Flood Control and Water Conservation District Zone 7 Alameda County Water District Burbank Water and Power Calleguas Municipal Water District Castaic Lake Water Agency Cucamonga Valley Water District Desert Water Agency Eastern Municipal Water District Kern County Water Agency Las Virgenes Municipal Water District Metropolitan Water District of Southern California Mojave Water Agency San Bernardino Valley Municipal Water District State Water Contractors Three Valleys Municipal Water District Tulare Lake Basin Water Storage District OPPOSITION 2 None Received 3