BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 173
          Author:   Weber (D), et al.
          Amended:  5/23/13 in Assembly
          Vote:     21

           
           SENATE EDUCATION COMMITTEE  :  7-1, 6/19/13
          AYES:  Liu, Block, Correa, Hancock, Hueso, Monning, Torres
          NOES:  Huff
          NO VOTE RECORDED:  Wyland
           
          SENATE GOVERNMENTAL ORGANIZATION COMMITTEE  :  9-2, 6/25/13
          AYES:  Wright, Calderon, Cannella, Correa, De León, Galgiani,  
            Hernandez, Lieu, Padilla
          NOES:  Nielsen, Berryhill

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8
           
          ASSEMBLY FLOOR  :  60-13, 5/28/13 - See last page for vote


           SUBJECT  :    Small Business Procurement and Contract Act

          SOURCE  :     Author


           DIGEST  :    This bill authorizes the California Community  
          Colleges (CCC) and the California State University (CSU) to  
          award a contract with a value greater than $5,000 but less than  
          $250,000 for the acquisition of goods, services or information  
          technology without competitive bidding, to a certified small  
          business (SB) or a disabled veteran business enterprise (DVBE),  
          if the institution receives a price quote from two or more of  
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          these entities, as specified.  This bill 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 SB or a DVBE if UC obtains price quotations from two  
          or more certified SBs or two or more DVBEs and if the UC Regents  
          by an authorizing resolution.

           ANALYSIS  :    Existing law requires a community college governing  
          board to let any contract involving 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 or to reject all bids.  Existing law also  
          requires the Board of Governors of the CCC 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. 

          Existing law 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 as it is expressed in Public Contract Code (PCC)  
          provisions.   Under the PCC, 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 Department of General Service  
          (DGS), are required to use competitive bidding.  DGS has set the  
          threshold amount for competitive bidding for these contracts at  
          $50,000. 

          Existing law also requires that the UC Regents let any contract  
          involving an expenditure of $100,000 or more for purchase of  
          equipment, materials, supplies, repairs and services, other than  
          construction services, to the lowest responsible bidder or to  
          reject all bids.  

          Existing law, notwithstanding existing Government Code and PCC  
          provisions outlining competitive bidding requirements,  
          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 $5,000, but less than  
          $250,000, to a certified SB, including a microbusiness, or to a  

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          DVBE, as long as the agency obtains price quotations from two or  
          more certified SBs, including microbusinesses, or from two or  
          more DVBEs.  

          This bill provides public postsecondary institutions an  
          alternative to competitive bidding requirements when they  
          contract with certified SBs and DVBE.  Specifically, this bill:   


          1. Allows the 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 SB or a DVBE if the UC obtains price quotations  
             from two or more certified SBs or two or more DVBEs and if  
             the UC Regents by an authorizing resolution.

          2. Allows the CSU and 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 SB or a DVBE if CSU obtains price quotations from  
             two or more certified SBs or two or more DVBEs.

           Comments
           
          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."

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

           SUPPORT  :   (Verified  8/9/13)

          California Asian Pacific Chamber of Commerce
          California Association for Micro Enterprise Opportunity
          California Black Chamber of Commerce

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          National Federation of Independent Businesses
          Sacramento Black Chamber of Commerce
          University of California

           ARGUMENTS 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.  This bill 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.


           ASSEMBLY FLOOR  :  60-13, 5/28/13
          AYES:  Achadjian, Alejo, Ammiano, Atkins, Bloom, Blumenfield,  
            Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian  
            Calderon, Campos, Chau, Chesbro, Cooley, Dahle, Daly,  
            Dickinson, Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez,  
            Gonzalez, Gordon, Gorell, Gray, Hall, Jones-Sawyer, Levine,  
            Linder, Lowenthal, Medina, Mitchell, Morrell, Mullin,  
            Muratsuchi, Nazarian, Nestande, Olsen, Pan, Perea, V. Manuel  
            Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,  
            Ting, Weber, Wieckowski, Wilk, Williams, Yamada, John A. Pérez
          NOES:  Allen, Chávez, Donnelly, Beth Gaines, Grove, Hagman,  
            Harkey, Jones, Logue, Maienschein, Mansoor, Wagner, Waldron
          NO VOTE RECORDED:  Bigelow, Conway, Roger Hernández, Holden,  
            Melendez, Patterson, Vacancy


          PQ:k  8/12/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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