BILL NUMBER: AB 2471 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 23, 2014
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
to the work in a public works contract awarded to the lowest
bidder, to issue a change order promptly, and in
no event later than 60 days after the extra work
is performed and reasonable documentation has been submitted,
except as specified . The bill would, if this requirement is
not met, make the public entity liable to the original contractor for
the extra 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 Except as otherwise
provided in paragraph (2), 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 60 days after the extra work is performed and the
original contractor has submitted reasonable documentation to support
the request for a change order . For purposes of this section,
extra work includes extra work performed by the original contractor,
a subcontractor, or a lower tier subcontractor. Extra work also
includes work or requirements that differ from those under the
public works contract with the public entity before the amendment of
the contract by the change order.
(2) (A) When a
change order is subject to approval by the governing body of a public
entity, but the governing body is not scheduled to meet in the 60
days following the performance of extra work, and reasonable
documentation to support the request for a change order for extra
work has been submitted, the public entity shall have three days
following the next scheduled meeting of the governing body to issue a
change order for extra work performed.
(B) When a change order for extra work by a school district or
community college district is subject to approval by the Division of
the State Architect, the school district or community college
district shall submit the change order to the division no later than
30 days following receipt of reasonable documentation to support the
change order for extra work. The Division of the State Architect
shall respond to the request for the change order no later than 30
days from receipt of the documentation.
(3) Nothing in this section shall be construed to prohibit a
public entity from issuing a change order in less than 60 days
following the performance of extra work, prior to the work being
performed, or during the course of the work being performed.
(2)
(4) 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. This subcontractor shall furnish
reasonable documentation to support the change order. 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 within the time limits prescribed
in subdivision (a) , the original contractor may bill for the
extra work that has already been performed, and the public
entity shall be liable for that extra 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.
7 percent per annum.
(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, including a charter city, county,
including a charter county , city and county,
including a charter city and 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.