BILL NUMBER: AB 552	CHAPTERED
	BILL TEXT

	CHAPTER  434
	FILED WITH SECRETARY OF STATE  OCTOBER 2, 2015
	APPROVED BY GOVERNOR  OCTOBER 2, 2015
	PASSED THE SENATE  SEPTEMBER 9, 2015
	PASSED THE ASSEMBLY  SEPTEMBER 10, 2015
	AMENDED IN SENATE  SEPTEMBER 4, 2015
	AMENDED IN SENATE  AUGUST 24, 2015
	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, O'Donnell. Public works contracts: damages.
   Existing law prescribes requirements for contracts between private
parties and public entities, as defined.
   This bill would, among other things, 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 delay
damages, as defined, is not enforceable unless the delay damages have
been liquidated to a set amount and identified in the public works
contract. Under the bill, these provisions would not apply to
specified state agencies. The bill would also make findings and
declarations related to public contracts.


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 associated with delays in
completion of public works on to public works construction
contractors increases public works construction 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 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 that expressly requires a
contractor to be responsible for delay damages is not enforceable
unless the 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.
   (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 a clause that expressly requires a
contractor to be liable for delay damages.
   (e) This section shall not be construed to preclude a public
agency from including more than one clause for delay damages for
specified portions of work when the delay damages have been
liquidated to a set amount for each individual clause and identified
in the public works contract.
   (f) This section shall not apply to departments identified in
Section 10106.