BILL NUMBER: AB 552	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 16, 2015
	AMENDED IN ASSEMBLY  APRIL 27, 2015
	AMENDED IN ASSEMBLY  MARCH 26, 2015

INTRODUCED BY   Assembly Member O'Donnell

                        FEBRUARY 23, 2015

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 552, as amended, O'Donnell. Public works contracts: damages.
   Existing law prescribes requirements for contracts between private
parties and public entities, as defined.
   This bill would provide that a public works contract entered into
on or after January 1, 2016, that contains a clause  expressly
 requiring a contractor to be responsible for 
consequential damages   delay damages, as defined, 
is not enforceable unless the  consequential  
delay  damages have been liquidated to a set amount and
identified in the public works contract. The bill would also make
findings and declarations related to public contracts.
   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.  (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  associa   ted
with delays in completion of public works  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.   costs. 
   (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   imposing delay
damages in a public works contract.
  SEC. 2.  Section 7203 is added to the Public Contract Code, to
read:
   7203.  (a) A public works contract entered into on or after
January 1, 2016, that contains a clause  requiring 
 that expressly requires  a contractor to be responsible for
 consequential   delay  damages is not
enforceable unless the  consequential   delay
 damages have been liquidated to a set amount and identified in
the public works contract. 
   (b) "Delay damages" as used in this section, means damages
incurred by the public agency for each day after the date on which
the work was to be completed by the contractor pursuant to the public
works contract. Delay damages shall not include damages incurred by
a public agency after the filing of a notice of completion or, in the
absence of a notice of completion, the acceptance by the public
agency of the public work as complete.  
   (b) 
    (c)  "Public agency" shall include the state, the
Regents of the University of California, a city, charter city,
county, charter county, district, public authority, municipal
utility, and any other political subdivision or public corporation of
the state. 
   (d) This section shall not be construed to limit a right or remedy
that the public agency has to enforce the express terms of the
public works contract, except for delay damages.