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
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<1> These provisions are applicable only upon adoption of
an authorizing resolution by the Regents of the University
of California.
AB 173 (Weber) continued
PageB
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
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<2> The Department of General Service has set the threshold
amount for competitive bidding for these contracts at
$50,000
AB 173 (Weber) continued
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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.
AB 173 (Weber) continued
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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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