BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 522 (Burke) - Public contracts:  information technology:   
          contractor performance assessment report
          
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          |Version: May 28, 2015           |Policy Vote: G.O. 10 - 1        |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 17, 2015   |Consultant: Mark McKenzie       |
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          This bill meets the criteria for referral to the Suspense File. 


          Bill  
          Summary:  AB 522 would require the Director of Technology to  
          develop and implement a standardized contractor performance  
          assessment report system by January 1, 2017 to evaluate  
          contractor performance on specified information technology (IT)  
          contracts and projects.


          Fiscal  
          Impact:  
           Department of Technology estimates annual costs of  
            approximately $350,000 to develop a performance assessment  
            system, and to maintain the information received from  
            evaluations of contractors and vendors. (General Fund)

           Unknown ongoing costs to state departments or agencies  
            acquiring IT projects to perform contractor evaluations.   
            These costs are likely to be built into overall contract  
            costs. (General Fund or special funds, as applicable)







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          Background:  Existing law generally requires that all contracts for the  
          acquisition of IT goods or services be made by, or under the  
          supervision of, the Department of General Services (DGS), unless  
          otherwise expressly provided.  Acquisition authority may be  
          delegated by DGS to any state agency determined to be capable of  
          effective use of that authority, subject to specified  
          limitations.  Existing law provides the Department of Technology  
          with the express authority over all contracts for the  
          acquisition of IT projects that are "reportable" under Chapter  
          4800 of the State Administrative Manual (those that require  
          advance approval from the Department of Technology) and not  
          delegated to state agencies, as specified.  
          Section 4819.37 of the State Administrative Manual (SAM)  
          specifies which IT projects are "reportable," requiring state  
          agencies to either obtain a specified reporting exemption or  
          obtain approval from the Department of Technology before  
          dedicating funding or staff resources for projects that meet the  
          following criteria:


           Projects whose initiation depends upon decisions made during  
            the state budget process, such as proposals to increase the  
            agency's existing IT activities.
           Projects that involve a new system development or acquisition  
            that is specifically required by legislative mandate, or is  
            subject to legislative review, as specified.
           Projects that have a cost that exceeds the agency's delegated  
            cost threshold assigned by the Department of Technology and do  
            not meet the criteria of a specified desktop and mobile  
            computing commodity expenditure.
           Projects that meet previously imposed conditions by the  
            Department of Technology.

          Generally speaking, the Department of Technology provides  
          independent project oversight for medium- and high-criticality  
          state IT projects.  Currently, there are 45 projects under  
          development with a reported cost of over $4 billion that are  
          subject to oversight by the Department of Technology.


          Proposed Law:  
            AB 522 would require the Department of Technology to develop a  








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          standardized contractor performance assessment report system by  
          January 1, 2017 to evaluate the performance of a contractor on  
          any IT contract or project reportable under Chapter 4800 of the  
          SAM.  The bill requires the system to include an objective  
          contractor performance evaluation, and information about the  
          type of contract, whether the contract was completed on time,  
          and the number of previously completed contracts or projects by  
          the contractor.
          The bill would also require the Department of Technology to  
          implement the contractor performance assessment report system  
          for all reportable IT contracts and projects, and requires that  
          the system be used to evaluate and award any IT contract or  
          project awarded under existing law for the acquisition of IT  
          goods and services.




          Proposed Author  
          Amendments:  The author proposes to amend the bill to require  
          multiple evaluations before the final evaluation, and to provide  
          a minimum 30-day response period for the contractor to respond  
          to the final evaluation


          Recommended  
          Amendments:  Staff recommends a technical amendment to paragraph  
          (2) of subdivision (b) of the new code section for consistency  
          with the rest of the bill, as follows:
               (2) The contractor performance assessment report system  
               shall, in addition to any other applicable information  
               technology procurement procedures, be utilized to evaluate  
               and award any information technology contract or project  
                reportable under Chapter 4800 of the State Administrative  
               Manual  awarded pursuant to this chapter.





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