BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 558| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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. AB 558 Page 2 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 AB 558 Page 3 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) AB 558 Page 4 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 AB 558 Page 5 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 **** END ****