AB 552,
as amended, O'Donnell. begin deletePreferences in contracting. end deletebegin insertPublic works contracts: damages.end insert
Existing lawbegin delete sets forth various goals and timetables for participation of minorities and women with respect to state employment and certain state contracts, including contracts entered into by the University of California. end deletebegin insert prescribes requirements for contracts between private parties and public entities, as defined.end insert
This bill wouldbegin delete make nonsubstantive changes to this provision.end deletebegin insert require public works contracts entered into by a public agency, as defined, on or after
January 1, 2016, to provide that damages recoverable from a nonperforming party be liquidated and specified in the contract, to provide that liquidated damages not be disproportionate to potential actual consequential and provable damages, and to not require that a contractor be responsible for consequential damages unless those damages have been liquidated to a set amount, as provided. The bill would also make findings and declarations related to public contracts.end insert
Vote: majority.
Appropriation: no.
Fiscal committee: begin deleteno end deletebegin insertyesend insert.
State-mandated local program: no.
The people of the State of California do enact as follows:
(a) The Legislature finds and declares that, as
2a matter of public policy, it is in the best interest of California
3taxpayers to ensure uniformity in the bidding and contracting
4process for public works construction projects within the State of
5California.
6(b) The Legislature further finds and declares that contractually
7imposing undefined and unlimited risk on to public works
8construction contractors increases public works construction costs
9because construction contractors must account for the undefined
10and unlimited risk, which is generally uninsurable, in their bids.
11(c) It is therefore in the best interest of California taxpayers
12and public works construction contractors for the Legislature to
13establish clear guidelines for how liquidated damages and
14consequential damages are expressed in a public works contract.
begin insertSection 7203 is added to the end insertbegin insertPublic Contract Codeend insertbegin insert, to
16read:end insert
(a) Public works contracts entered into by a public
18agency on or after January 1, 2016, shall provide that damages
19recoverable from a nonperforming party shall be liquidated and
20specified in the contract in order to be enforceable against the
21nonperforming party. Liquidated damages shall not be
22disproportionate to potential actual consequential and provable
23damages, otherwise all damages shall not be recoverable against
24the nonperforming party.
25(b) A public agency shall not require a contractor to be
26responsible for consequential damages of any sort unless the
27consequential damages have been liquidated to a set amount and
28identified in a public works contract entered into on or after
29January 1, 2016.
30(c) “Public agency” shall include the state, the Regents of the
31University of California, a city, charter city, county, charter county,
32district, public authority, public agency, municipal utility, and any
33other political subdivision or public corporation of the state.
Section 10500.5 of the Public Contract Code is
35amended to read:
It is the intent of the Legislature to facilitate the
37participation of small businesses, particularly small disadvantaged
38or minority business enterprises, women business enterprises, and
P3 1disabled veteran business enterprises, in business contracting with
2the University of California. The Legislature intends that the
3Regents of the University of California adopt policies and
4procedures to ensure that a fair proportion of university contracts
5be placed with small business enterprises, particularly small
6disadvantaged, women, and disabled veteran business enterprises,
7in areas of commodity purchases, services, and construction
8contracts. It is the further intent of the Legislature that the regents
9adopt, by January 1, 1985, with
respect to small business
10enterprises, particularly small disadvantaged and women business
11enterprises, and by January 1, 1992, with respect to disabled
12veteran business enterprises, policies and procedures that include,
13but are not limited to, all of the following:
14(a) Annual targets for utilization of small businesses, particularly
15disadvantaged business enterprises, women business enterprises,
16and disabled veteran business enterprises, including subcontracts
17for construction.
18(b) Annual statistical reports on the participation of small
19businesses, particularly disadvantaged business enterprises, women
20business enterprises, and disabled veteran business enterprises, as
21general contractors and subcontractors in each project.
22(c) Outreach programs.
23(d) Directories of disadvantaged business enterprises, women
24business enterprises, and disabled veteran business enterprises.
25(e) Monitoring by the regents of progress with respect to
26utilizing disadvantaged business enterprises, women business
27enterprises, and disabled veteran business enterprises.
28It is also the intent of the Legislature that the Regents of the
29University of California report annually to the Legislature, on or
30before each July 1, on the participation of small disadvantaged
31business enterprises, women business enterprises, and disabled
32veteran business enterprises in university business contracting.
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