BILL NUMBER: AB 2471	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Frazier

                        FEBRUARY 21, 2014

   An act to add Section 7204 to the Public Contract Code, relating
to public contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2471, as introduced, Frazier. Public contracts: change orders.
   Existing law contains various provisions relating to contracts by
a public entity for the performance of public works of improvement,
including provisions for the payment of progress payments and the
disbursing and withholding of retention proceeds. Existing law, until
January 1, 2016, prohibits progress payments upon state contracts
from being made in excess of 100% of the percentage of actual work
completed, and authorizes the Department of General Services to
withhold not more than 5% of the contract price until final
completion and acceptance of the project, except as specified.
   This bill would require a public entity, when authorized to order
changes or additions in the work in a public works contract awarded
to the lowest bidder, to issue a change order promptly, and in no
event later than 30 days after the changes or additions are required.
The bill would require, if this requirement is not met, the public
entity to be liable to the original contractor for payment of the
contractor's invoice for the change order or additional work. The
bill would require prejudgment interest to accrue on any amount for
which the public entity fails to issue a change order promptly or
make a payment due pursuant to this bill.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 7204 is added to the Public Contract Code, to
read:
   7204.  (a) A public entity, including a charter city, when
authorized to order changes or additions to the work in a public
works contract awarded to the lowest bidder, shall, for extra work
required of the original contractor, issue a change order promptly,
and in no event later than 30 days after the extra work is required.
   (b) Upon the failure of the public entity to promptly issue a
change order, the original contractor may bill for the work, and the
state or public entity shall be liable for the work.
   (c) If there is a dispute concerning the need for a change order
for extra work, the public entity shall pay a reasonable amount for
the portion of the extra work that is not in dispute.
   (d) When the dispute concerning the extra work relates only to the
amount that the original contractor shall be paid, the public entity
shall promptly pay the reasonable value of the work or the amount
that the public entity does not dispute, whichever is greater.
   (e) The public entity, and the original contractor, may reserve
their respective rights as to any amount paid that remains in
dispute.
   (f) Prejudgment interest shall accrue at the rate of 10 percent
per annum on any amount for which the public entity fails to issue a
change order or fails to pay in accordance with this section.
   (g) In addition to any other remedies that may be available to it,
an original contractor may enforce this provision through a writ of
mandate.
   (h) The public entity shall not require the original contractor to
waive any provision of this section.