BILL NUMBER: AB 1971 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 18, 2014
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. School districts: best 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 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. The bill would establish various requirements
applicable to the use of the best value procurement method under this
authorization. The bill would require a school district that uses
the best value procurement method to 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 These provisions would be repealed on January 1,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 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
and 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" as defined
in subdivision (c) of Section 22002.
(h) "Qualifications" means financial condition, relevant
experience, demonstrated management competency, labor compliance,
skilled and trained workforce, 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. if required by the bidding document, some or all
of the preceding qualifications as they pertain to 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)
(B) (i ) As of January
1, 2016, 2015, 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)
( ii) As of January 1,
2017, 2016, 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 .
(l) "Skilled journeyperson" means a worker who meets either of the
following criteria:
(1) The worker either graduated from an apprenticeship for the
applicable occupation that was approved by the Chief of the Division
of Apprenticeship Standards or adheres to the apprenticeship
regulations adopted by the federal Secretary of Labor.
(2) The worker has at least as many hours of on-the-job experience
in the applicable occupation that would be required to graduate from
an apprenticeship program for the applicable occupation that is
approved by the Chief of the Division of Apprenticeship Standards.
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 boards of the following four school 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:
(1) The Los Angeles Unified School District.
(2) A small school district, ____.
(3) A medium-sized school district, ____.
(4) A large school district, ____.
(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.
(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.
(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 , on the refusal or failure of the
successful selected bidder for a
project to execute a tendered contract, may award it to the second
lowest scored 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 lowest scored bidder.
(f) (1) If the district elects to award a project pursuant to this
section, retention proceeds withheld by the district from the
selected best value contractor shall not exceed 5 percent if a
performance and payment bond, issued by an admitted surety insurer,
is required in the solicitation of bids.
(2) In a contract between the selected best value contractor and a
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld shall not exceed the percentage specified in the contract
between the district and the selected best value contractor. If the
selected best value contractor provides written notice to a
subcontractor that, prior to or at the time the bid is requested, a
bond may be required and the subcontractor subsequently is unable or
refuses to furnish a bond to the selected best value contractor, then
the selected best value contractor may withhold retention proceeds
in excess of the percentage specified in the contract between the
district and the selected best value contractor from any payment made
by the selected best value contractor to the subcontractor.
(g) All subcontractors bidding on contracts pursuant to this
chapter shall be afforded the protection contained in Chapter 4
(commencing with Section 4100).
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 as required by this code
. 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.
(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
bidders 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 in
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. of
qualification scoring.
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
experience , 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. A factor listed above shall
make up at least 15 percent of the total weight or consideration.
Other factors may be included, in addition to relevant experience,
skilled and trained workforce, and acceptable safety
record, in determining a qualification score.
(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.
A preference of up to 5 percent shall be applied to
the price of a bid submitted by a small business, as defined by the
school district, before dividing the bidder's price by its
qualification score. The lowest resulting cost per quality point will
represent the best value bid. 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 school district.
(c) The governing board of the school district
shall issue a written decision of its contract award or else
reject all bids .
(d) Upon issuance of a contract award, the governing
board of the school district shall publicly announce its
award identifying the project, the project price, 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.
as well as the prices, qualification scores, and resulting costs
per qualification point for all responsive bidders. 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.
20119.6. Except as otherwise provided in this article, the best
value procurement method is not intended to change any guideline,
criterion, procedure, or requirement of the governing board of the
school district to let a contract for a project to the lowest
responsible bidder or else reject all bids.
20119.6. 20119.7. This article shall
remain in effect only until January 1, 2020, and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 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.