BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        AB 558|
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                                      CONSENT 


          Bill No:  AB 558
          Author:   Low (D)
          Amended:  3/26/15 in Assembly
          Vote:     21  

           SENATE GOVERNMENTAL ORG. COMMITTEE:  12-0, 6/29/15
           AYES:  Hall, Berryhill, Block, Gaines, Glazer, Hernandez, Hill,  
            Hueso, Lara, McGuire, Runner, Vidak
           NO VOTE RECORDED:  Galgiani

           SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  78-0, 5/14/15 (Consent) - See last page for  
            vote

           SUBJECT:   Public contracts: state contracts: information  
                     technology goods and services


          SOURCE:    TechAmerica

          DIGEST:    This bill 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. 

          ANALYSIS:
          
          Existing law:

          1)Authorizes the Department of General Services (DGS) and  
            Caltech to adopt rules and regulations that are necessary to  
            govern the acquisition and disposal of IT goods and services. 









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          2)Requires contract awards for all large-scale systems  
            integration projects to be based on the proposal that provides  
            the most value-effective solutions to the state's  
            requirements, as specified, and requires evaluation criteria  
            for the acquisition of IT goods and services, including  
            systems integration, to provide for the selection of a  
            contractor on an objective basis not limited to cost alone. 

          3)Requires Caltech to invite active participation, review,  
            advice, comment, and assistance from their private sector and  
            state agencies in developing procedures to streamline and make  
            the acquisition process more efficient, and requires  
            solicitations for acquisitions based on evaluation criteria  
            other than cost alone to provide that sealed cost proposals be  
            submitted. 

          4)Requires DGS and Caltech to develop, implement, and maintain  
            standardized methods for the development of all IT requests  
            for proposals.

          5)Requires all rules and requirements and any changes to the  
            rules and requirements governing an IT acquisition, for which  
            DGS or Caltech determines that a request for proposal is  
            appropriate, to be communicated in writing to all vendors that  
            have expressed an intent to bid and to be posted in a public  
            location.

          This bill:

          1)Requires Caltech, in developing procedures to streamline and  
            make the acquisition process more efficient, to require the  
            acquisition methodology to use electronic means, whenever  
            possible, to reduce paper submissions and allow for electronic  
            submission of bids and proposals.

          2)Requires solicitations for acquisitions based on evaluation  
            criteria other than cost alone to provide that electronic cost  
            proposals be submitted whenever possible.

          3)Requires that standardized methods currently developed by DGS  
            and Caltech include, whenever possible, electronic formats for  
            electronic bid solicitation and electronic receipt of bid  








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            proposals.

          4)Requires all rules and requirements and any changes to the  
            rules and requirements to be communicated electronically and  
            to be posted on the Internet Web site of DGS and Caltech. 

          Background
          
          Purpose of the bill.  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.  For example, state projects like the California  
          Medicaid Management Information System (CA-MMIS), required  
          vendors 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.  However, had the  
          procurement been structured to allow for the submission of  
          electronic proposals, the state and company would have saved  
          paper, staff time, and money."

          Electronic submissions in California.  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 and state agencies to develop plans to  
          move many state services from paper-based systems to electronic  
          systems using the Internet to transmit documents.  Since that  
          time the State of California has encouraged state agencies and  
          departments to use electronic submissions and posting of  
          information whenever possible. 

          Prior/Related Legislation
          
          AB 410 (Obernolte, 2015) requires a state agency to post on its  
          Internet Web site any report it is required by law to submit to  
          a committee of the Legislature.  (Pending on the Senate Floor)








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          AB 1365 (John A. Perez, Chapter 192, Statutes of 2013) required  
          state and local agencies to file mandated reports with the  
          Legislative Counsel electronically instead of as a printed copy.

          AB 722 (Matthews, Chapter 266, Statutes of 2003) authorized DGS  
          to use a competitive online-bidding procedure for the  
          acquisition of goods, services and IT.

          AB 1585 (Accountability and Administrative Review, Chapter 7,  
          Statutes of 2010), eliminated hundreds of obsolete reports and  
          revised the procedure for mandatory reporting requirements by  
          state agencies with the goal of reducing paperwork and expanding  
          electronic reporting. 

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          SUPPORT:   (Verified8/18/15)


          TechAmerica (source)
          Natoma Technologies


          OPPOSITION:   (Verified8/18/15)


          None received


          ARGUMENTS IN SUPPORT:     According to TechAmerica, "the State  
          of California is in the process of launching the Fi$cal System,  
          one of California's most significant administrative technology  
          upgrades in decades.  The Fi$cal System will implement the  
          State's first ever electronic procurement system in December  
          2015, which will automate the current paper-based process  
          currently in use by state agencies and departments."   
          TechAmerica further argues that without AB 558 the State of  
          California may not be able to fully implement these capabilities  
          in the procurement of IT goods and services








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          ASSEMBLY FLOOR:  78-0, 5/14/15
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,  
            Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Linder, Medina


          Prepared by:Felipe Lopez / G.O. / (916) 651-1530
          8/18/15 12:46:18


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