AB 1971 Assembly Bill

BILL NUMBER: AB 1971	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 14, 2014
	AMENDED IN ASSEMBLY  MARCH 28, 2014

INTRODUCED BY   Assembly Member Bocanegra

                        FEBRUARY 19, 2014

   An act to add and repeal Article 3.3 (commencing with Section
20119) of Chapter 1 of Part 3 of Division 2 of the Public Contract
Code, relating to best value procurement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1971, as amended, Bocanegra.  Public contracts: school
  School  districts:  competitive bidding:
 best  value.   value procurement:
pilot program. 
   The Local Agency Public Construction Act requires the governing
board of any school district to let any contract for a public
project, as defined, involving an expenditure of $15,000 or more, to
the lowest responsible bidder that gives security as the board
requires, or else reject all bids.
   This bill would  authorize the   establish a
pilot program to authorize the Los Angeles Unified School District
and 3 other unspecified school districts to use, before January 1,
2017, a best value procurement method for  bid evaluation and
selection for public projects that exceed  $1,000,000 to be
determined by the best value for the school district.  
$1,000,000.  The bill would establish various requirements
applicable to the use of the best value procurement method 
for the evaluation and selection of public projects by school
districts  under this authorization.  The bill would
require a school district that uses the best value procurement method
t   o submit an interim and final report to the Legislative
Analyst, and would require the Legislative Analyst to submit an
interim and final report to the appropriate policy and fiscal
committees of the Legislature on the use of the procurement method
pursuant to the bill, in accordance with a specified schedule. These
provisions would be repealed on January 1, 2020.  
   This bill would make legislative findings and declarations as to
the necessity of a special statute for a limited number of school
districts of varying sizes, including, but not limited to, the Los
Angeles Unified School District. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Article 3.3 (commencing with Section 20119) is added to
Chapter 1 of Part 3 of Division 2 of the Public Contract Code, to
read:

      Article 3.3.  School  Districts -- Best  
Districts--Best  Value Procurement  Pilot Program 


   20119.  (a) It is the intent of the Legislature to enable school
districts to use cost-effective options for building and modernizing
school facilities. The Legislature has recognized the merits of the
best value procurement method process in the past by authorizing its
use for projects undertaken by the University of California.
   (b) The Legislature also finds and declares that school districts
using the best value procurement method require a clear understanding
of the roles and responsibilities of each participant in the best
value process. As reflected in the University of California report to
the Legislature, the benefits of a best value procurement method
include a reduction in contract delays, change orders, and claims
producing a savings in both contract costs and administration.
   (c) It is the intent of the Legislature to provide an optional,
alternative procedure for bidding and building school construction
projects.
   (d) In addition, it is the intent of the Legislature that the best
value procurement method is not intended to change in any manner any
guideline, criteria, procedure, or requirement of the governing
board of the school district to let any contract for a project to the
lowest responsible bidder or else reject all bids.
   20119.1.  As used in this article:
   (a) "Best value" means a procurement process whereby the selected
bidder may be selected on the basis of objective criteria for
evaluating the qualifications of bidders with the resulting selection
representing the best combination of price and qualifications.
   (b) "Best value contract" means a  competitively bid 
contract entered into pursuant to the provisions of this article.
   (c) "Best value contractor" means a properly licensed person,
firm, or corporation that submits a bid for, or is awarded, a best
value contract.
   (d) "Demonstrated management competency" means the experience,
competency, capability, and capacity of the proposed management
staffing to complete projects of similar size, scope, or complexity.
   (e) "Financial condition" means the financial resources needed to
perform the contract. The criteria used to evaluate a bidder's
financial condition shall include, at a minimum, capacity to obtain
all required payment bonds, and required insurance.
   (f) "Labor compliance" means the ability to comply with, and past
performance with, contract and statutory requirements for the payment
of wages and qualifications of the workforce. The criteria used to
evaluate a bidder's labor compliance shall include, at a minimum, the
bidder's ability to comply with the apprenticeship requirements of
the California Apprenticeship Council and the Department of
Industrial Relations, its past conformance with such requirements,
and its past conformance with requirements to pay prevailing wages on
public works projects.
   (g) "Project" has the same meaning as "public project"  is
  as  defined in subdivision (c) of Section 22002.

   (h) "Qualifications" means financial condition, relevant
experience, demonstrated management competency, labor compliance, the
safety record of the bidder, and to the extent relevant, the
preceding qualifications as they pertain to all subcontractors
proposed to be used by the bidder for designated portions of the
work.
   (i) "Relevant experience" means the experience, competency,
capability, and capacity to complete projects of similar size, scope,
or complexity.
   (j) "Safety record" shall be deemed "acceptable" if its experience
modification rate for the most recent three-year period is an
average of 1.00 or less, and its average total recordable injury or
illness rate and average lost work rate for the most recent
three-year period do not exceed the applicable statistical standards
for its business category, or if the bidder is a party to an
alternative dispute resolution system as provided for in Section
3201.5 of the Labor Code. If the experience modification rate for the
most recent three-year period is or was 1.00 or higher, a bidder may
attach a letter of explanation that the school district may review
and take into consideration when evaluating the bidder's acceptable
safety record.
   (k) (1) "Skilled and trained workforce" means a workforce that
meets both of the following criteria, as applicable:
   (A) All the workers are either registered apprentices or skilled
journeypersons.
   (B) (i) As of January 1, 2015, at least 30 percent of the skilled
journeypersons are graduates of an apprenticeship program for the
applicable occupation that was either approved by the Chief of the
Division of Apprenticeship Standards pursuant to Section 3075 of the
Labor Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by the
federal Secretary of Labor.
   (ii) As of January 1, 2016, at least 45 percent of the skilled
journeypersons are graduates of an apprenticeship program for the
applicable occupation that was either approved by the Chief of the
Division of Apprenticeship Standards pursuant to Section 3075 of the
Labor Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by the
federal Secretary of Labor.
   (iii) As of January 1, 2017, at least 60 percent of the skilled
journeypersons are graduates of an apprenticeship program for the
applicable occupation that was either approved by the Chief of the
Division of Apprenticeship Standards pursuant to Section 3075 of the
Labor Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by the
federal Secretary of Labor.
   (2) A school district and a contractor are not required to track
the percentage of journeypersons that are graduates of an
apprenticeship program if the governing board of the school district
has entered into a project labor agreement that will bind all
contractors and subcontractors performing work on the project and
complies with Section 2500.
   20119.2.  (a)  This article provides for a pilot program for
four school districts of different sizes to use best value
procurement for projects over one million dollars ($1,000,000). 

    (b)    The governing  board 
 boards  of  any   the following four
 school  district,   districts,  for
projects over one million dollars ($1,000,000),  before January
1, 2017,  may use the best value procurement method in
accordance with this  article.   article: 

   (1) The Los Angeles Unified School District.  
   (2) A small school district, ____.  
   (3) A medium-sized school district, ____.  
   (4) A large school district, ____.  
   (b) 
    (c)  The governing board of any school district shall
let any contract for a project pursuant to this article to the
selected bidder that represents the best value or else reject all
bids. 
   (c) 
    (d)  The bidder may be selected on the basis of the best
value to the governing board of the school district. In order to
implement this method of selection, the governing board of the school
district shall adopt and publish procedures and required guidelines
for evaluating the qualifications of the bidders that ensure the best
value selections by the school district are conducted in a fair and
impartial manner. These procedures and guidelines shall conform to
this article and shall be mandatory for the school district when
using best value selection. 
   (d) 
    (e)  If the governing board of the school district deems
it to be for the best interest of the school district, the governing
board of the school district  may,  on the refusal
or failure of the successful bidder for a project to execute a
tendered contract,  may  award it to the second bidder that
represents the best value. If the second bidder fails or refuses to
execute the contract, the governing board of the school district may
likewise award it to the third bidder.
   20119.3.  The governing board of the school district shall proceed
in accordance with the following when awarding best value contracts
under this article:
   (a) The governing board of the school district shall prepare a
solicitation for bids and give notice pursuant to Section 20112.
   (b) The governing board of the school district shall establish a
procedure to prequalify bidders pursuant to Sections 20101 and
20111.6. Information submitted by the bidder as part of the
evaluation process shall not be open to public inspection to the
extent that information is exempt from disclosure under the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code).
   (c) Each solicitation for bids shall do all of the following:
   (1) Invite prequalified bidders to submit sealed bids in the
manner prescribed by this article.
   (2) Include a section identifying and describing the following:
   (A) Criteria that the governing board of the school district will
consider in evaluating the qualifications of the bidders.
   (B) The methodology and rating or weighting system that will be
used by the governing board of the school district in evaluating
 bids and specifically whether proposals will be rated
according to numeric or qualitative values.   bids.

   (C) The relative importance or weight assigned to the criteria for
evaluating the qualifications of bidders identified in the request
for bids.
   (d) Final evaluation of the best value contractor shall be done in
a manner that prevents  the identity of the bidders and the
 cost or price information from being revealed to the committee
evaluating the qualifications of the bidders prior to completion and
announcement of that committee's decision.  A meeting to 
 evaluate bids shall be open to the public. 
   20119.4.  Selection of the best value contractor shall be made as
follows:
   (a) (1) The governing board of the school district shall evaluate
the qualifications of the bidders based solely upon the criteria set
forth in the solicitation documents, and shall assign a qualification
score to each bid.
   (2) Factors in determining a qualification score shall include,
but are not limited to, price, relevant experience, skilled and
trained workforce, and acceptable safety record and shall be weighted
in accordance with the following:
   (A) At least 50 percent of the total weight or consideration shall
be given to the following factors: relevant expertise, skilled and
trained workforce, and acceptable safety record. A factor listed in
this subparagraph shall not make up less than 15 percent of the total
weight or consideration.
   (B) No more than 50 percent of the total weight or consideration
shall be given to price. A bidder that qualifies as a certified small
business shall receive a 5-percent bid preference.
   (b) The award of the contract shall be made to the bidder whose
bid is determined, by the school district in writing, to be the best
value to the governing board of the school district. To determine the
best value contractor, the governing board of the school district
shall divide each bidder's price by its qualifications score. The
lowest resulting cost per quality point will represent the best value
bid.
   (c) The governing board of the school district shall issue a
written decision of its contract award.
   (d) Upon issuance of a contract award, the governing board of the
school district shall publicly announce its award identifying the
best value contractor to which the award is made, the project, the
project price, and the selected best value contractor's score based
on the qualifications criteria for evaluating the bidders listed in
the request for bids. The notice of award shall be made public and
include the score of the selected best value contractor in relation
to all other responsive bidders and their respective prices. The
names of the remaining responsive bidders may be concealed upon the
request of the bidders, in which case the governing board of the
school district shall determine an alternative method for publicly
announcing its award of the contract. The contract file shall include
documentation sufficient to support the decision to award. 
   20119.5.  (a) (1) A school district that uses the best value
procurement method pursuant to this article shall submit to the
Legislative Analyst the following reports completed by an independent
third party:
   (A) An interim report on or before July 1, 2017.
   (B) A final report on or before January 1, 2019.
   (2) A report shall include, but is not limited to, the following
information:
   (A) A description of the projects awarded using the best value
procedures.
   (B) The contract award amounts.
   (C) The best value contractors awarded the projects.
   (D) A description of any written protests concerning any aspect of
the solicitation, bid, or award of the best value contracts,
including the resolution of the protests.
   (E) A description of the prequalification process.
   (F) The criteria used to evaluate the bids, including the
weighting of the criteria and an assessment of the effectiveness of
the methodology.
   (G) If a project awarded under this article has been completed, an
assessment of the project performance, to include a summary of any
delays or cost increases.
   (b) (1) The Legislative Analyst shall submit an interim report to
the appropriate policy and fiscal committees of the Legislature on
the use of the best value procurement method by school districts on
or before January 1, 2018, and a final report on or before July 1,
2019. The report may include the information provided from the school
district reports pursuant to subdivision (a) and any pertinent
information that the Legislative Analyst deems instructive in
evaluating whether the best value procurement method should be
continued, expanded, or prohibited.
   (2) The requirement for submitting a report imposed pursuant to
this subdivision is inoperative on January 1, 2020, pursuant to
Section 10231.5 of the Government Code. 
    20119.5.   20119.6.   This article
shall remain in effect only until January 1,  2022, 
 2020,  and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1,  2022,
  2020,  deletes or extends that date.
   SEC. 2.    The Legislature finds and declares that a
special law is necessary and that a general law cannot be made
applicable within the meaning of Section 16 of Article IV of the
California Constitution because of the need to establish a pilot
project for a limited number of school districts of varying sizes,
including, but not limited to, the Los Angeles Unified School
District, to determine the potential benefits and consequences of
using best value procurement to facilitate infrastructure
improvements and ease fiscal impacts.