BILL ANALYSIS Ó
AB 558
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Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION
Mike Gatto, Chair
AB 558
(Low) - As Amended March 26, 2015
SUBJECT: Public contracts: state contracts: information
technology goods and services
SUMMARY: Requires the Department of Technology (CalTech) to
develop procedures to make large-scale information technology
(IT) procurements more efficient by requiring electronic
submission of bids and other documents whenever possible.
Specifically, this bill:
1)Requires CalTech, in developing procedures to make large-scale
IT acquisition more efficient, to require the use of
electronic means for the submission of bids and proposals,
whenever possible.
2)Requires sealed cost proposals, which are submitted for
certain IT acquisitions, to be submitted as electronic cost
proposals, whenever possible.
3)Requires cost proposals that are submitted electronically to
be sufficiently secured electronically.
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4)Requires the Department of General Services (DGS) and CalTech
to include in the standard methods for submitting and
receiving requests for proposals (RFPs) for IT procurement the
use of electronic formats for submission and receipt of bid
proposals, whenever possible.
5)Requires the rules and requirements governing a given IT
procurement to be communicated electronically, whenever
possible, to all vendors who have expressed an intent to bid
on a project and requires those rules and requirements to be
posted on the DGS and CalTech website, whenever possible.
EXISTING LAW:
1)Authorizes state and local agencies to enter into contracts by
way of electronic transmission, including the issuance of
solicitation documents and the receipt of responses thereto.
(Public Contract Code (PCC) Section 1600)
2)Allows state and local agencies to accept bids on public works
or other contracts over the Internet (PCC Section 1601)
3)Allows DGS to use a competitive online-bidding procedure known
as "reverse auctioning" for the acquisition of goods, services
and IT. (PCC 10290)
4)Requires CalTech to work with the private sector and state
agencies to develop procedures that streamline the IT
procurement process for large-scale systems integration
projects (PCC 12102.2)
5)Requires cost proposals for solicitations for acquisitions
based on evaluation criteria other than cost alone to be
submitted as sealed cost proposals, which are held under "lock
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and key" until the time the cost proposals are opened. (PCC
12102.2)
6)Requires the State Contracting Manual to set forth procedures
and methods to be used by the state when seeking bids for the
acquisition of IT and requires the DGS and CalTech to develop,
implement, and maintain standardized methods for the
development of all IT RFPs (PCC 12104)
7)Requires DGS or CalTech to communicate in writing the rules
and requirements governing IT procurement to all vendors who
have expressed intent to bid on a project and, in addition,
requires those rules and requirements to be posted in a public
location. (PCC 12104.5)
FISCAL EFFECT: Unknown
COMMENTS:
1)Purpose of this bill . This bill intends to streamline state
IT procurement by allowing state agencies to use electronic
means whenever possible for the submission and receipt of bids
and cost proposals and requires DGS and CalTech to post
certain project documents on the Internet, whenever possible.
AB 558 is sponsored by TechAmerica.
2)Author's statement . According to the author, "In the late
1970s, the Legislature passed the most innovative and
groundbreaking IT procurement policies in the nation.
However, the original statute was not written in a way to
accommodate future technological advancements and the
capabilities of modern IT systems. These policies are
critical to the state's IT procurements and require frequent
amendments to allow the state to have the ability to
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efficiently acquire IT good and services."
"Currently, the State is in the process of launching the
FI$Cal System, one of the most significant administrative
technology upgrades in decades. The FI$Cal System will be
implementing the State's first ever electronic procurement
system in December 2015 which will automate the current paper
based process currently in use by State Departments.
"The current laws governing IT procurement are outdated, as
there are several statutory requirements for the processing of
paper documents and the posting of notices in public places.
These burdensome practices require procurement professionals
to process and post paper documents outside of any automated
systems and require extensive physical storage for all paper
documents."
3)The benefits of going digital . In 1993, the Legislature
authorized state and local agencies to enter into contracts
electronically, and in 2002 the Legislature first authorized
state and local agencies to accept bids for public works and
other projects via the Internet. Around the same time,
then-Governor Gray Davis issued Executive Order D-17-00
establishing a Director of E-Government within the Governor's
office responsible for working with the then-Department of
Information Technology (DOIT) and state agencies to develop
plans to move many state services from paper-based systems to
electronic systems using the Internet to transmit documents.
An E-Government Business Advisory Council composed of
representatives from the state's IT firms advised the state on
e-government architecture and policy during the state's
transition from paper-based services to electronic and
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Internet-based services. During the 15 years that followed,
the Legislature changed state laws to permit the electronic
submission of documents to state agencies, including business
filings, income tax returns, professional license renewals,
driver or vehicle license renewals, campaign finance reports,
voter registration applications and more.
However for complex IT projects, bidders are still be required
to submit documents on paper to state agencies. For example,
according to the bill's sponsor TechAmerica, for state
projects such as the California Medicaid Management
Information System (CA-MMIS), vendors were required to submit
Bid Proposal Responses containing so much paper it had to be
delivered on pallets, which the state then had to store and
destroy at a later date. If the IT procurement had been
structured to allow for the submission of electronic
proposals, then the state and the prospective vendors would
have saved paper, staff time, and money.
This bill requires CalTech and DGS to streamline the state's
large IT procurement projects by establishing procedures that
permit the electronic submission and receipt of key documents,
such as RFPs and cost proposals.
4)Public college systems and some agencies exempted . The
University of California, California State University, and the
California Community College systems, would not be subject to
this bill's requirements, because IT procurement at the public
college systems is governed by policies and procedures
developed by those systems individually.
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5)Arguments in support . TechAmerica, the bill's sponsor, states
in support of AB 558, "Procurement is a critical element of IT
Project Lifecycle and updating our State's Public Contract
Codes to embrace future technology capabilities will not only
bring value to the State of California but will help ensure
more competitive procurements."
Natoma Technologies states, "There are still several statutory
requirements for submitting paper documents and posting
notices in public places. This bill would allow for
electronic bid submissions for IT procurements by cleaning up
statutory requirements that currently require paper public
documents, and will allow using electronic means whenever
possible."
6)Prior Legislation . AB 565 (Polanco), Chapter 1175, Statutes
of 1993, authorized cities, counties and state agencies to
enter into, and may payment on, contracts by way of electronic
submission.
SB 1687 (Margett), Chapter 398, Statutes of 2002, authorized
public entities to adopt methods and procedures to receive
bids on public works or other contracts over the Internet.
AB 722 (Matthews), Chapter 266, Statutes of 2003, authorized
DGS to use a competitive online-bidding procedure known as
"reverse auctioning" for the acquisition of goods, services
and IT.
7)Double-referral . This bill was double-referred to the
Assembly Accountability and Administrative Review Committee,
where it was heard on April 15, 2015, and passed out on a 9-0
vote.
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REGISTERED SUPPORT / OPPOSITION:
Support
TechAmerica (sponsor)
Natoma Technologies
Opposition
None received.
Analysis Prepared by:Jennie Bretschneider / P. & C.P. / (916)
319-2200
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