BILL ANALYSIS Ó
AB 173
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
AB 173 (Weber) - As Amended: April 24, 2013
SUBJECT : Postsecondary education: Small Business Procurement
and Contract Act
SUMMARY : Provides public postsecondary institutions an
alternative to competitive bidding requirements when they
contract with California Certified Small Businesses and Disabled
Veteran Business Enterprises (DVBE).
Specifically, this bill :
1)Allows the University of California (UC) to award contracts
for the acquisition of goods, services, or information
technology that have an estimated value of between $100,000
and less than $250,000 to a certified small business or a DVBE
if UC obtains price quotations from two or more certified
small businesses or two or more DVBEs.
a) This shall only apply to UC if the Regents of the
University of California make the provision applicable by
appropriate resolution.
2)Allows the California State University (CSU) to award
contracts for the acquisition of goods, services, or
information technology that have an estimated value greater
than $5,000 and less than $250,000 to a certified small
business or a DVBE if CSU obtains price quotations from two or
more certified small businesses or two or more DVBEs.
3)Allows the California Community Colleges (CCC) to award
contracts for the acquisition of goods, services, or
information technology that have an estimated value greater
than $5,000 and less than $250,000 to a certified small
business or a DVBE if CCC obtains price quotations from two or
more certified small businesses or two or more DVBEs.
EXISTING LAW Various sections of Education, Government, and
Public Contract codes as well as the California Constitution set
rules related to public postsecondary institutions' procurement.
Additionally, policies adopted by these institutions impact
purchasing practices.
AB 173
Page 2
In general, laws and policies limit the contract amount before
postsecondary institutions must enter into competitive bidding
processes in which the bids are awarded to the lowest
responsible bidder. For the UC system, that threshold is
$100,000. For CSU, it is $50,000 and for CCC, it is $81,000.
Some exceptions apply.
Additionally, Government Code Section 14838.5 sets a small
business and DVBE program by allowing state agencies to award
contracts for the acquisition of goods, services, or information
technology that has an estimated value of greater than $5,000,
but less than $250,000 to a certified small business or to a
DVBE, as long as the agency obtains price quotations from two or
more certified small businesses, including microbusinesses, or
from two or more disabled veterans business enterprises. It is
not clear if this section applies to some or all of the state's
public postsecondary institutions.
FISCAL EFFECT : Unknown
COMMENTS : This bill provides public postsecondary institutions
an alternative to the competitive bidding process for contracts
under $250,000 for goods, services, or information technology.
Specifically, the institutions would be allowed to exempt
themselves from low bid requirements by contracting with a small
business or a disabled veteran business enterprise (DVBE). Under
the bill, postsecondary institutions using this option would be
required to obtain quotes from at least two small businesses or
at least two DVBEs before entering into a contract.
This bill would not require postsecondary institutions to enter
into contracts under $250,000 by using this process. Instead,
according to the author, the intent is to provide the
educational institutions with flexibility in order to encourage
contracting with small businesses and DVBEs.
As noted in the existing law section, it is not clear if the
Government Code section that specifies the small business and
DVBE already applies to some postsecondary institutions or if
these institutions already have the authority to establish such
programs. For example, the CSU Policy Manual for Contracting &
Procurement references the Government Code section when
describing its small business/DVBE option. Under the policy,
campuses are allowed to award contracts of more than $5,000 but
less than $250,000 to a certified small business or a DVBE as
AB 173
Page 3
long as the campus obtains quotes from at least two or more
small businesses or DVBEs.
Additionally, various code sections and the California
Constitution provide postsecondary institutions with contracting
parameters and requirements. The author explained that because
of different interpretations and requirements that apply to
different postsecondary institutions, the bill is meant to add
clarification by amending sections of the Government and Public
Contract codes to allow all of the state's postsecondary
institutions to use the small business and DVBE contracting
option.
While the fiscal impact is unknown, this bill could lead to
increased expenses since it allows postsecondary institutions to
avoid competitive bidding for some contracts.
REGISTERED SUPPORT / OPPOSITION :
Support
California Asian Pacific Chamber of Commerce
California Association for Micro Enterprise Opportunity
Opposition
None on File
Analysis Prepared by : Scott Herbstman / A. & A.R. / (916)
319-3600