BILL NUMBER: AB 2471	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 24, 2014
	AMENDED IN ASSEMBLY  APRIL 7, 2014

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 amended, 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, as defined, 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   60
 days after the  changes or additions are required.
  extra work is performed.  The bill would, if this
requirement is not met, make the public entity liable to the
original contractor for  payment of the contractor's invoice
for the change order or additional work.   the work that
has already been performed.  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. The bill would also authorize an original contractor to
present to the public entity a request for a change order for extra
work performed by a subcontractor, including a lower tier
subcontractor. It would also authorize a subcontractor to request
that an original contractor present a change order request for extra
work directed by the public entity that was performed by the
subcontractor or lower tier subcontractor. The bill would require the
original contractor to notify the subcontractor as to whether the
original contractor presented the request to the public entity, as
specified.
   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) (1) A public entity, 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   60  days after the extra work is
 required.   performed.  For purposes of
this section, extra work includes extra work performed by the
original contractor, a subcontractor, or a lower tier subcontractor.
   (2) An original contractor may present to the public entity a
request for a change order for extra work performed by a
subcontractor or a lower tier subcontractor. A subcontractor may
request in writing that an original contractor present a change order
request for extra work, directed by the public entity, that was
performed by the subcontractor or by a lower tier subcontractor on
behalf of the subcontractor. Within 45 days of receipt of this
written request, the original contractor shall notify the
subcontractor in writing as to whether the original contractor
presented the request to the public entity and, if the original
contractor did not present the request, provide the subcontractor
with a statement of the reasons for not doing so.
   (b) Upon the failure of the public entity to promptly issue a
change order, the original contractor may bill for the  work,
  work that has already been performed,  and the
public entity shall be liable for  the   that
 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 or unpaid that remains
in dispute.
   (f) Prejudgment interest shall accrue on any amount for which the
public entity fails to issue a change order or fails to pay in
accordance with this section at the legal rate described in
subdivision (a) of Section 685.010 of the Code of Civil Procedure.
   (g) In addition to any other remedies that may be available to it,
an original contractor may enforce this section through a writ of
mandate.
   (h) The public entity shall not require the original contractor to
waive any provision of this section.
   (i) For purposes of this section, "public entity" means the state,
including a state agency, department, office, division, bureau,
board, or commission, the California State University, the University
of California, a city, county, city and county, including a charter
county, district, special district, public authority, political
subdivision, public corporation, or nonprofit transit corporation
wholly owned by a public agency and formed to carry out the purposes
of the public agency.