BILL ANALYSIS                                                                                                                                                                                                    






                                                       Bill No:  AB  
          173
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2013-2014 Regular Session
                                 Staff Analysis



          AB 173  Author:  Weber
          As Amended:  May 23, 2013
          Hearing Date:  June 25, 2013
          Consultant:  Paul Donahue


                                     SUBJECT  

            Postsecondary education: Small Business Procurement and  
                                  Contract Act

                                   DESCRIPTION
           
          Provides public postsecondary institutions an alternative  
          to competitive bidding requirements when they contract with  
          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.<1>

          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  
          -------------------------
          <1> These provisions are applicable only upon adoption of  
          an authorizing resolution by the Regents of the University  
          of California. 





          AB 173 (Weber) continued                                  
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            more DVBEs.

          3)Authorizes 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

           1)Specifies that all contracts for the acquisition or lease  
            of goods in an amount of $25,000, or a higher amount as  
            established by the director of General Services, are  
            required to use competitive bidding.<2>

          2)Requires a community college governing board to let any  
            contract that involves an expenditure of $50,000 or more  
            for purchase of equipment, materials, supplies, repairs  
            and services, other than construction services, to the  
            lowest responsible bidder. 

          3)Requires the Board of Governors of the California  
            Community Colleges to annually adjust the $50,000  
            threshold to reflect the percentage change in the annual  
            average value of the Implicit Price Deflator for State  
            and Local Government Purchases of Goods and Services for  
            the United States. 

          4)Requires the CSU trustees to prescribe policies and  
            procedures for the acquisition of services, facilities,  
            materials, goods, supplies, or equipment, and requires  
            that these include competitive means for obtaining best  
            value while complying with legislative intent regarding  
            competitive bids or proposals.

          5)Requires the Regents of the University of California (UC)  
            to award any contract involving an expenditure of  
          -------------------------
          <2> The Department of General Service has set the threshold  
          amount for competitive bidding for these contracts at  
          $50,000





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            $100,000 or more for purchase of equipment, materials,  
            supplies, repairs and services, other than construction  
            services, to the lowest responsible bidder.

          6)Notwithstanding existing laws governing competitive  
            bidding requirements, state law authorizes a state agency  
            to award a contract for the acquisition of goods,  
            services, or information technology that has an estimated  
            value of greater than five thousand dollars ($5,000), but  
            less than two hundred fifty thousand dollars ($250,000),  
            to a certified small business, including a microbusiness,  
            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 (SB/DVBE Option).

                                    BACKGROUND
           
           1)Purpose  : According to the author, "this proposal would  
            allow all three systems to use the SB/DVBE Option for  
            contracts below $250,000. The UC and CCC system already  
            use the SB/DBVE option, but only for contracts below  
            $100,000(UC) and below $50,000(CSU) as stated previously.  
             CSU is the only system that currently uses the SB/DBVE  
            option for contracts below $250,000 and was adopted by  
            the CSU Board of Trustees. However, state law states that  
            the CSU can use SB/DBVE option for contracts valued under  
            $50,000 and the author believes it is important to update  
            exiting law and state that CSU is authorized to use this  
            option for contracts valued under $250,000."

           2)Statements in support  :  Supporters state that, the  
            colleges routinely complain that the competitive bidding  
            requirement is cumbersome and time consuming, often  
            taking months to purchase simple items. AB 173 is  
            intended to allow universities and colleges to use the  
            SB/DVBE Option for contracts up to $250,000, and enhance  
            the contracting opportunities for SB and DVBE businesses.

                            PRIOR/RELATED LEGISLATION
           
          AB 31 (Price), Chapter 212, Statues of 2009. Increased from  
          $100,000 to $250,000 the maximum amount that a state agency  
          may award a contract to a CSB or DVBE without complying  
          with competitive bidding requirements.






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           SUPPORT:   

          California Association for Micro Enterprise Opportunity  
          (CAMEO)
          California Black Chamber of Commerce
          Sacramento Black Chamber of Commerce

           OPPOSE:   

          None on file

           FISCAL COMMITTEE:   Senate Appropriations Committee



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