BILL ANALYSIS Ó
AB 173
Page 1
ASSEMBLY THIRD READING
AB 173 (Weber)
As Amended May 23, 2013
Majority vote
ADMINISTRATIVE REVIEW 12-0 APPROPRIATIONS 12-0
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|Ayes:|Frazier, Achadjian, |Ayes:|Gatto, Bocanegra, |
| |Buchanan, | |Bradford, |
| |Ian Calderon, Cooley, | |Ian Calderon, Campos, |
| |Gorell, Hagman, | |Eggman, Gomez, Hall, |
| |Lowenthal, Medina, Olsen, | |Rendon, Pan, Quirk, Weber |
| |Quirk-Silva, Salas | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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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.
2)Provides that 1) above, shall only apply to UC if the Regents
of the University of California make the provision applicable
by appropriate resolution.
3)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.
4)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
AB 173
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business or a DVBE if CCC obtains price quotations from two or
more certified small businesses or two or more DVBEs.
EXISTING LAW :
1)Sets rules related to public postsecondary institutions'
procurement in various sections of Education, Government, and
Public Contract Codes as well as the California Constitution.
Additionally, policies adopted by these institutions impact
purchasing practices.
2)Provides that, 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.
3)States that 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 DVBEs.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, to the extent UC, CSU, and CCC 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 : 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 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
AB 173
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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.
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 and Procurement references the
Government Code section when describing its small business and
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 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.
Analysis Prepared by : Scott Herbstman / A. & A.R. / (916)
319-3600
FN: 0000677