BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 522| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 522 Author: Burke (D), et al. Amended: 8/31/15 in Senate Vote: 21 SENATE GOVERNMENTAL ORG. COMMITTEE: 10-1, 7/14/15 AYES: Hall, Block, Gaines, Galgiani, Glazer, Hernandez, Hill, Hueso, Lara, McGuire NOES: Vidak NO VOTE RECORDED: Berryhill, Runner SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 78-0, 6/2/15 - See last page for vote SUBJECT: Public contracts: information technology: contractor performance assessment report SOURCE: Author DIGEST: This bill requires the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology (IT) contract or project reportable to the Department of Technology (Caltech), as provided. ANALYSIS: Existing law: AB 522 Page 2 1)Establishes Caltech within the Government Operations Agency. 2)Provides that Caltech is responsible for the approval and oversight of specified IT projects. 3)Sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services (DGS) and other state agencies in overseeing and implementing state contracting procedures and policies. 4)Requires, generally, that all contracts for the acquisition of IT goods or services be made by or under the supervision of DGS. This bill: 1)Requires the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any IT contract or project reportable to Caltech. 2)Specifies that the contractor performance assessment report system shall include, but is not limited to, multiple evaluations before the final evaluation, a minimum 30-day response period for the contractor to respond to the final evaluation, an objective evaluation of the performance of the contractor, information about the type of contract or project and whether or not that contract or project was completed on time, and information about the number of completed contracts or projects by the contractor. 3)Provides that upon the development of the contractor performance assessment report system, the Director of Technology shall implement the contractor performance assessment report system for all IT contracts and projects. 4)Specifies that the contractor performance assessment report system shall, in addition to any other applicable information technology procurement procedures, be utilized to evaluate and award any IT contract or project awarded pursuant to the provisions of this bill. AB 522 Page 3 Background Purpose of the bill. According to the author, "over the past several years, the State of California has experienced many difficulties with IT projects that have resulted in projects going over budget, over time, and in some cases not working at all. As indicated in the recent state auditor report between 1994 and 2013 the state terminated or suspended seven IT projects after spending nearly $1 billion and currently the state has 45 IT projects under development that are reported to cost more than $4 billion." The author further argues that, "currently the federal government relies heavily on past performance of vendors as an evaluation criterion and has implemented a system known as the Contractor Performance Assessment Reporting System (CPARS). This provides real-time data that is collected through the use of a report card that evaluates vendor performance in key areas that are directly correlated to the quality of work, including project schedule, cost control, project management, communication, and compliance. Providing a means to collect real-time data on vendor's performance during an IT project offers a significant benefit to California by offering a relevant way to assess quality of work, gauging actual customer satisfaction, and creating an incentive to maximize performance on contracts." Contractor Performance Assessment Reporting System. CPARS is a web-enabled application that collects and manages the library of automated Contractor Performance Assessment Reports (CPAR). A CPAR assesses a contractor's performance and provides a record, both positive and negative, on a given contractor during a specific period of time. Each assessment is based on objective facts and supported by program and contract management data, such as cost performance reports, customer comments, quality reviews, technical interchange meetings, financial solvency assessments, construction/production management reviews, contractor operations reviews, functional performance evaluations, and earned contract incentives. Prior/Related Legislation AB 2523 (Cooley, Chapter 391, Statutes of 2014) required Caltech to review a specified project management methodology manual and, AB 522 Page 4 based on that review, provide a report to the Legislature by July 1, 2016, recommending how a team of senior consulting IT experts can assist senior department executives charged with oversight of major IT projects. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, Caltech 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). In addition, unknown ongoing costs to state departments or agencies acquiring IT projects to perform contractor evalutions. These costs are likely to be built into overall contracts costs (General Fund or special funds, as applicable). SUPPORT: (Verified8/28/15) Natoma Technologies OPPOSITION: (Verified8/28/15) None received ARGUMENTS IN SUPPORT: According to Natoma Technologies, "currently, State IT procurements qualify vendors via irrelevant and arbitrary data points that include the vendor's annual revenue, the size of previous contracts the vendor has acquired, and whether a vendor can provide a positive reference. To be clear, most vendors can identify someone associated with the project who will speak positively about it, rendering the highly used reference method rather arbitrary. While conclusions can be made from collecting this type of data, it falls short of providing key evaluation criteria that actually matter for successful IT projects." AB 522 Page 5 ASSEMBLY FLOOR: 78-0, 6/2/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Chávez, Grove Prepared by:Felipe Lopez / G.O. / (916) 651-1530 8/30/15 19:42:15 **** END ****