BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1857|
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THIRD READING
Bill No: AB 1857
Author: Frazier (D)
Amended: 8/22/14 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 10-1, 6/24/14
AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,
Lara, Liu, Pavley, Roth
NOES: Wyland
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De León, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 60-14, 5/27/14 - See last page for vote
SUBJECT : Caltrans equipment procurement
SOURCE : Transportation California
DIGEST : This bill authorizes the Department of General
Services (DGS), until January 1, 2021, to purchase and equip
heavy mobile fleet vehicles and special equipment for use by the
Department of Transportation (Caltrans) by means of best value
procurement, establishes requirements for bid evaluation and
protest procedures as specified.
Senate Floor Amendments of 8/22/14 shift the responsibility of
procuring this heavy equipment from Caltrans to DGS.
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ANALYSIS : Existing law requires DGS to investigate and
establish the need for acquiring new state-owned motor vehicles
and for all state agencies to acquire motor vehicles through, or
under the supervision of, DGS. Existing law further requires
state agencies to award contracts for goods and services to the
lowest responsible bidder, with a few limited exceptions.
This bill:
1.Authorizes DGS, until January 1, 2021, to purchase and equip
heavy mobile fleet vehicles and special equipment for use by
Caltrans by means of best value procurement.
2.Defines "best value procurement" as a contract award
determined by objective criteria related to price, features,
functions, and life-cycle costs that may include:
Total cost of ownership, including repair and
maintenance costs.
Product performance, productivity, and safety standards.
The supplier's ability to perform to the contract
requirements.
Environmental benefits, including reduction of
greenhouse gas emissions, reduction of air pollutant
emissions, or reduction of toxic or hazardous materials.
1.Requires, in addition to disclosure of the minimum
requirements for qualification, the solicitation document
specify what business performance measures in addition to
price shall be given a weighted value.
2.Requires DGS use a scoring method based on those factors and
price in determining the successful bid, and requires the
scoring method ensure substantial weight is given to the
contract price.
3.Requires the solicitation document provide for submission of
sealed price information, and that an evaluation of all
criteria other than price be completed before the opening of
price information.
4.Allows, upon written request of any bidder who has submitted a
bid, notice of the proposed award be posted in a public place
in the DGS offices at least 24 hours before awarding the
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contract or purchase order.
5.Provides for a protest procedure before making an award, as
specified.
6.Limits the total value of vehicles and equipment purchased
through this bill $20,000,000 annually.
7.Requires DGS, on or before June 1, 2020, prepare an evaluation
of the best value procurement, including a recommendation on
whether or not the process should be continued, to be posted
on the Caltrans Internet Web site on or before June 30, 2020.
Comments
According to the National Association of State Procurement
Officials' 2011-2012 Survey of State Procurement Practices, 34
states use full life-cycle costs to determine contract awards to
vendors. Studies suggest that results have generally been good
when public agencies utilize best value procurement, despite the
long-standing precedence for the low-bid procurement system.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Unknown annual increases in vehicle and equipment purchase
costs, if best value procurement results in higher initial
costs, likely offset by life-cycle cost savings over time.
(State Highway Account)
One-time costs to DGS, likely in the range of $150,000 in
2017-18, to prepare an evaluation of Caltrans' best value
procurement pilot program. (General Fund)
SUPPORT : (Verified 8/22/14)
Transportation California (source)
California Manufacturers & Technology Association
California Taxpayers Association
Caterpillar, Inc.
John Deere
AFSCME
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South Coast Air Quality Management District
ARGUMENTS IN SUPPORT : According to the author, this bill is
intended to provide DGS with an optional procurement method to
determine whether overall savings may be achieved by evaluating
factors other than price when purchasing heavy-duty vehicles and
equipment. While the standard lowest responsible bid
procurement process provides a clear and objective measure to
ensure the lowest initial procurement cost, it prevents
considering other value-related factors when purchasing heavy
vehicles. The author suggests that, while initial procurement
costs may be higher with best value procurement, through this
alternative procurement method Caltrans will realize overall
life-cycle cost savings.
Writing in support of this bill, Caterpillar Inc. and its
California dealers claim that the state would benefit from
moving to a life-cycle cost model for procuring heavy vehicles
and equipment. They note that allowing DGS to make a broader
based evaluation of equipment purchase options will attract
qualified bidders and hold them accountable for delivering the
highest quality product. They also note that the result of
including "downstream" operating costs associated with equipment
purchase decisions into solicitations and bids will likely
result in lower overall costs. Caltrans subjects much of its
heavy equipment to strenuous, taxing work, and therefore
factoring the cost of the equipment over its entire lifespan
appears reasonable and responsible.
ASSEMBLY FLOOR : 60-14, 5/27/14
AYES: Achadjian, Alejo, Ammiano, Bloom, Bocanegra, Bonilla,
Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Cooley, Dababneh, Dahle, Daly, Dickinson, Eggman,
Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gray, Hall, Roger Hernández, Holden, Jones-Sawyer, Levine,
Linder, Lowenthal, Maienschein, Medina, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Perea, John A. Pérez, V.
Manuel Pérez, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas,
Skinner, Stone, Ting, Weber, Wieckowski, Williams, Yamada,
Atkins
NOES: Allen, Conway, Donnelly, Beth Gaines, Gorell, Grove,
Hagman, Harkey, Jones, Mansoor, Melendez, Wagner, Waldron,
Wilk
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NO VOTE RECORDED: Bigelow, Chávez, Logue, Patterson,
Quirk-Silva, Vacancy
JA:nl 8/25/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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