BILL ANALYSIS �
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CONCURRENCE IN SENATE AMENDMENTS
AB 44 (Buchanan)
As Amended June 20, 2013
Majority vote
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|ASSEMBLY: |76-0 |(April 18, |SENATE: |38-0 |(August 15, |
| | |2013) | | |2013) |
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Original Committee Reference: B.,P. & C. P.
SUMMARY : Requires a prime contractor to list a subcontractor's
contractor license number when bidding on public construction
projects, beginning July 1, 2014.
The Senate amendments :
1)Delay the requirement that a contractor include the contractor
license number of each subcontractor listed in any bid or
offer for the construction of any public work until after July
1, 2014.
2)Specify that an inadvertent error in listing the contractor
license number shall not be grounds for filing a bid protest
or 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.
FISCAL EFFECT : According to Senate Appropriations Committee,
pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
1)Purpose of this bill . This bill aims to improve the ability
of a public entity to identify subcontractors for public
construction projects by requiring prime contractors to list
the contractor license number of each proposed subcontractor
on the bid document. By reducing the amount of time it takes
for a public entity to identify licensed subcontractors on a
bid, this bill would theoretically increase the efficiency of
awarding public contracts. This bill is sponsored by the
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Northern California Carpenters Regional Council.
2)Author's statement . According to the author's office, "Under
current law, the SSFPA 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 a subcontractor's] name and
location 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 names, making
differentiation 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."
3)Problems with the identification of subcontractors on public
bid documents . Current law under the Subletting and
Subcontracting Fair Practices Act (SSFPA) already requires
prime contractors bidding on state and local public
construction projects to list the name and business location
of subcontractors providing labor or services greater than
0.5% of the prime contractor's total bid amount.
When a public entity reviews bids submitted for public
construction projects, the entity must verify that the prime
contractor and subcontractors performing work for payment on
the project hold active contractor licenses that are in good
standing with the Contractors' State License Board (CSLB).
Currently, public entities must read the bid document's
subcontractor designation form and verify a subcontractor's
license status by performing a search on the CSLB's online
contractor database for a subcontractor's business name and
location, which can result in numerous possibilities that must
be further narrowed. If a public entity performs a search of
a listed subcontractor on the CSLB's online contractor
database by using a contract license number, there can only be
one possible search result because each contractor license
number is a unique six-digit number. In this way, this bill
should save staff time in the award of public construction
contracts and improve the efficiency in the award of public
contracts.
The inability of a public entity to identify subcontractors of
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the lowest bidder can result in the delay, denial, or protest
of a contract that is awarded to the lowest responsible
bidder. For example, the public entity may need to request
additional information from the prime contractor to confirm
the identity of subcontractors, which can delay the award of
the contract. Or, the public entity may reject the bidder for
being non-responsive (for failing to properly identify
subcontractors) or non-responsible (for failing to list
licensed subcontractors). Or, a losing bidder may protest a
winning bidder's right to the contract award by disputing the
identity or license status of subcontractors on the winning
bidder's subcontractor list.
The author's office contends that the current process of
listing only a subcontractor's name and business location
makes it difficult to identify subcontractors for two reasons:
a subcontractor's information may be handwritten and
difficult to read because the penmanship is illegible, or
because the use of abbreviations and acronyms makes it
difficult to identify which subcontractor the prime contractor
intended to list among multiple possibilities. This problem
is compounded when subcontractors residing in the same city
share common names or use similar acronyms for their business
name, particularly in larger cities.
As an example, the author's office provided public bid
documents that prime contractors had submitted to both the
Solano Community College District and the City of Martinez for
different low-bid projects valued at over $4 million each.
The top contenders for these projects contained various
problems with subcontractor designation forms, such as the use
of abbreviated names, business names using individual names,
misspellings, and the misidentification of a subcontractor's
business location even though the forms met the minimum
completion standards.
Analysis Prepared by : Hank Dempsey / B.,P. & C.P. / (916)
319-3301
FN: 0001723
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