BILL NUMBER: AB 552	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 26, 2015

INTRODUCED BY   Assembly Member O'Donnell

                        FEBRUARY 23, 2015

   An act to  amend Section 10500.5 of   add
Section 7203 to  the Public Contract Code, relating to public
contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 552, as amended, O'Donnell.  Preferences in
contracting.   Public works contracts: damages. 
   Existing law  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.   prescribes
requirements for contracts between private parties and public
entities, as defined. 
   This bill would  make nonsubstantive changes to this
provision.   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. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    (a) The Legislature finds and declares
that, as a matter of public policy, it is in the best interest of
California taxpayers to ensure uniformity in the bidding and
contracting process for public works construction projects within the
State of California.  
   (b) The Legislature further finds and declares that contractually
imposing undefined and unlimited risk on to public works construction
contractors increases public works construction costs because
construction contractors must account for the undefined and unlimited
risk, which is generally uninsurable, in their bids.  
   (c) It is therefore in the best interest of California taxpayers
and public works construction contractors for the Legislature to
establish clear guidelines for how liquidated damages and
consequential damages are expressed in a public works contract. 

   SEC. 2.    Section 7203 is added to the  
Public Contract Code   , to read:  
   7203.  (a) Public works contracts entered into by a public agency
on or after January 1, 2016, shall provide that damages recoverable
from a nonperforming party shall be liquidated and specified in the
contract in order to be enforceable against the nonperforming party.
Liquidated damages shall not be disproportionate to potential actual
consequential and provable damages, otherwise all damages shall not
be recoverable against the nonperforming party.
   (b) A public agency shall not require a contractor to be
responsible for consequential damages of any sort unless the
consequential damages have been liquidated to a set amount and
identified in a public works contract entered into on or after
January 1, 2016.
   (c) "Public agency" shall include the state, the Regents of the
University of California, a city, charter city, county, charter
county, district, public authority, public agency, municipal utility,
and any other political subdivision or public corporation of the
state.  
  SECTION 1.    Section 10500.5 of the Public
Contract Code is amended to read:
   10500.5.  It is the intent of the Legislature to facilitate the
participation of small businesses, particularly small disadvantaged
or minority business enterprises, women business enterprises, and
disabled veteran business enterprises, in business contracting with
the University of California. The Legislature intends that the
Regents of the University of California adopt policies and procedures
to ensure that a fair proportion of university contracts be placed
with small business enterprises, particularly small disadvantaged,
women, and disabled veteran business enterprises, in areas of
commodity purchases, services, and construction contracts. It is the
further intent of the Legislature that the regents adopt, by January
1, 1985, with respect to small business enterprises, particularly
small disadvantaged and women business enterprises, and by January 1,
1992, with respect to disabled veteran business enterprises,
policies and procedures that include, but are not limited to, all of
the following:
   (a) Annual targets for utilization of small businesses,
particularly disadvantaged business enterprises, women business
enterprises, and disabled veteran business enterprises, including
subcontracts for construction.
   (b) Annual statistical reports on the participation of small
businesses, particularly disadvantaged business enterprises, women
business enterprises, and disabled veteran business enterprises, as
general contractors and subcontractors in each project.
   (c) Outreach programs.
   (d) Directories of disadvantaged business enterprises, women
business enterprises, and disabled veteran business enterprises.
   (e) Monitoring by the regents of progress with respect to
utilizing disadvantaged business enterprises, women business
enterprises, and disabled veteran business enterprises.
   It is also the intent of the Legislature that the Regents of the
University of California report annually to the Legislature, on or
before each July 1, on the participation of small disadvantaged
business enterprises, women business enterprises, and disabled
veteran business enterprises in university business contracting.