BILL ANALYSIS �
Bill No: AB
44
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 44 Author: Buchanan
As Amended: June 20, 2013
Hearing Date: June 25, 2013
Consultant: Paul Donahue
SUBJECT
Subletting and subcontracting; bidding practices
DESCRIPTION
1)Requires a contractor to include the contractor license
number of each subcontractor listed in any bid or offer
submitted after July 1, 2014 for the construction of any
public work.
2)Specifies that an inadvertent error in listing the
contractor license number shall not be grounds for
considering the bid nonresponsive if the corrected
contractor's license number is submitted to the public
entity by the prime contractor within 24 hours after the
bid opening, and provided that the corrected contractor's
license number corresponds to the submitted name and
location for that subcontractor.
EXISTING LAW
1)Requires a prime contractor to list the name and business
location of each subcontractor performing work or
rendering service to the prime contractor in an amount
exceeding one-half of one percent of the contractor's
total bid.<1>
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<1> Subletting and Subcontracting Fair Practices Act,
Public Contract Code � 4100 et seq.)
AB 44 (Buchanan) continued
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2)Requires a state agency or department, prior to awarding
a contract for work to be performed by a contractor, to
do either of the following:
a) Verify with the Contractors' State License Board
that the person seeking the contract is licensed in a
classification appropriate to the work to be
undertaken;<2> or,
b) Require the person seeking the contract to present
his or her pocket license or certificate of
licensure and include a statement signed under penalty
of perjury declaring that the pocket license or
certificate of licensure presented is his or hers, is
current and valid, and is in a classification
appropriate to the work to be undertaken.<3>
3)Makes it a misdemeanor for any person to submit a bid to
a public agency in order to engage in the business or act
in the capacity of a contractor without having a license,
excepting those persons who are exempt from the licensing
laws or who are working on a public construction project
that is federally funded, as specified.
4)Requires every licensed contractor to provide his license
number on all construction contracts, subcontracts, calls
for bid, and all forms of advertising.<4>
BACKGROUND
Purpose of the bill : The author seeks to improve the
identification process for subcontractors on public
construction projects. The author states that, "under
current law, the Subcontracting and Subletting Fair
Practices Act requires an entity taking bids for the
construction of any public work or improvement to specify
in his or her bid, the name and location of the place of
business of each subcontractor who will perform the work or
render service to the prime contractor during the project.
The current requirement of listing the name and location of
the subcontractor is not always sufficient to determine the
exact identity of the subcontractor. In large urban areas
multiple contractors could have the same or very similar
-------------------------
<2> Verification need only be made once every two years.
<3> Public Contract Code � 6100
<4> Bus. & Prof. Code � 7030.5.
AB 44 (Buchanan) continued
PageC
names, making differentiating between them difficult or
impossible. Including the subcontractor's license number
will allow awarding bodies to quickly and efficiently
identify all the parties included in a bid."
The State Building and Construction Trades Council says
that this bill will "assist the state's efforts to combat
the underground economy by ensuring that all businesses are
properly licensed before they submit bids for public works
projects. The lack of a contractor's license number is a
common signal of failure to adhere to California's consumer
protection laws and regulations."
Recent amendments remove opposition : This bill was heard
at the June 11, 2013 meeting of the Committee, at which
time the author put the bill over to the next hearing to
discuss amendments with opponents. As amended, the bill
reflects an agreement reached among the parties.
Arguments in support : According to the Northern California
Carpenters Regional Council, the bill will "bring much
needed clarity to the public works bidding process by
requiring that prime contractors bidding on public works
projects list the name and contractor's license number of
subcontractors that will perform in excess of one-half of
one percent of the prime contractor's total bid at the time
of the bid. Requiring the subcontractor's California
contractor license number be included in the bid will
reduce the number of substitutions and create a more fair
and transparent competitive bidding process."
AB 44 (Buchanan) continued
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PRIOR/RELATED LEGISLATION
AB 2992 (Evans), 2005-2006 Session. Would have required the
California State University trustees to notify prospective
bidders that all subcontractors must submit answers to
questions contained in a questionnaire, and submit a
financial statement and document outlining the
subcontractor's experience performing public works
projects. (Vetoed)
AB 902 (Diaz), Chapter 180, Statutes of 2003. Authorizes an
awarding authority to consent to substituting a
subcontractor when the subcontractor listed in the bid
fails or refuses to execute a written contract for the
scope of the work specified in the subcontractor's bid and
at the price specified in the subcontractor's bid.
SUPPORT:
American Fence Association, California Chapter
Berger Brothers, Inc.
California Conference of Carpenters
California Fence Contractors' Association
California Legislative Conference, Plumbing, Heating and
Piping Industry
California Professional Association of Specialty
Contractors
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
Contractors State License Board
Engineering Contractors' Association
Flasher Barricade Association
Golden State Builders Exchanges
Marin Builders Association
Millwright Employers Association
Modular Installers Association
National Electrical Contractors Association, Northern
California Chapter
Northern California Carpenters Regional Council
Rutherford Company, Inc.
State Building and Construction Trades Council of
California
The Brady Company
The Raymond Group
Wall and Ceiling Alliance
AB 44 (Buchanan) continued
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Western States Council of Sheet Metal Workers
OPPOSE:
None on file
FISCAL COMMITTEE: Senate Appropriations Committee
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