BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 173
                                                                  Page  1

          Date of Hearing:   May 15, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                      AB 173 (Weber) - As Amended:  May 9, 2013 

          Policy Committee:                              Accountability  
          and Administrative Review                     Vote: 12-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill authorizes the University of California (UC), the  
          California State University (CSU), and the California Community  
          Colleges (CCC), in awarding contracts up to $250,000 for goods,  
          services, and information technology, and as an alternative to  
          receiving competitive bids, to instead obtain price quotations  
          from two or more state-certified small businesses, including  
          microbusinesses, or from two or more disabled veteran business  
          enterprises (DVBEs).

           FISCAL EFFECT  

          To the extent UC, CSU, and community college campuses use this  
          authority, contract costs could increase if only two small  
          businesses or two DVBEs were solicited rather than allowing all  
          potential vendors to competitively bid on the contracts. Any  
          additional costs should be largely offset due to administrative  
          cost savings in soliciting quotations rather than preparing bid  
          documents, advertising for bids, and receiving, evaluating and  
          awarding competitive bids on relatively small contracts.

           COMMENTS  

           Background and Purpose  . 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. The current thresholds are  
          $100,000 for UC, $50,000 for CSU, and $81,000 for the CCC, with  
          some exceptions.

          Government Code Section 14838.5 allows state agencies to award  








                                                                  AB 173
                                                                  Page  2

          contracts for the acquisition of goods, services, or information  
          technology with 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. AB 173  
          extends this authority to the state's three postsecondary  
          institutions.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081