BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: AB 653
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|Author: |Levine |
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|Version: |June 15, 2015 Hearing |
| |Date: June 24, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Kathleen Chavira |
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NOTE: This bill has been amended to replace its contents and
this is the first time the bill is being heard in its current
form.
Subject: Postsecondary education: community college
contracting practices
SUMMARY
This bill authorizes a district to secure bids by posting the
notice for bids on its internet website or bidding platform; as
defined, expands the allowable term for continuing contracts to
seven years, and clarified that existing Education Code and
Contract Code provisions do not preclude the governing board of
a district from purchasing materials, equipment, supplies, or
services under the same conditions as those specified in a
contract lawfully awarded by the University of California (UC)
or the California State University (CSU).
BACKGROUND
Existing law, for the purpose of securing bids, requires a
community college board to publish at least once a week for two
weeks in some newspaper of general circulation published in the
district, or if there is no such paper, then in some newspaper
of general circulation, circulated in the county a notice
calling for bids or proposals, stating the work to be done or
materials or supplies to be furnished and the time when and the
place where bids or proposals will be opened. (Education Code §
81641)
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Existing law limits the term of continuing contracts for work to
be done with an accepted vendor for services to be performed, or
for apparatus or equipment to be furnished, sold, built,
installed, or repaired for the district, to no more than five
years. Continuing contracts for materials or supplies to be
furnished or sold to the district may not exceed three years.
(EC § 81644)
ANALYSIS
This bill:
1)Expands the means by which a community college district can meet
the requirements for securing bids for contracts by
authorizing the posting of the notice for bids on its internet
website or bidding platform.
2)Defines "bidding platform" as an online environment that allows
users to bid for the provision of goods or services.
3)Deletes the current continuing contract term restrictions for
vendors to and authorizes all contracts not to exceed seven
years.
4)Clarifies that Education Code contracting provisions applicable
to the community colleges do not preclude the governing board
of a district from purchasing materials, equipment, supplies,
or services under the same conditions as those specified in a
contract lawfully awarded by the University of California (UC)
or the California State University (CSU) and makes a parallel
change making the same clarification in the Public Contract
Code.
STAFF COMMENTS
1)Need for the bill. According to the author, the purpose of this
bill is to create efficiencies by making it easier for
community college districts, the UC and the CSU to share
contracts with each other. While the UC and CSU have
coordinated in sharing contracts negotiated by one segment
with another, existing statutes governing the community
colleges have made it difficult for them to participate in
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these shared contracts.
2)Shared contracting. According to the author, shared contracting
is the practice of making a procurement contract negotiated by
one campus available to another campus. The CSU and UC have
already coordinated in sharing between campuses at a regional
level to meet their procurement needs. This bill seeks to
facilitate the ongoing collaboration between the segments by
making it clear that the community colleges are able to
participate in the practice of shared contracting.
3)Recent gut and amend. This bill was recently gutted and amended.
As heard and passed in the Assembly, this bill required the
public segments of higher education to coordinate the efforts
of their respective segments when procuring systemwide
information technology. The recently added provisions in
Sections 3 and 4 of the bill would apply to contracts for
purposes beyond just technology, but modify current law to
facilitate the coordination envisioned and appear consistent
with the policy which was heard in the Assembly. According to
the Chancellor's Office, shared contracts could allow the
segments to leverage a better price on major purchases such as
data systems, network equipment, office supplies, furniture,
and the accompanying services for these commodities.
The remaining provisions, however, go farther than simply
facilitating coordination. These provisions make changes to
contracting requirements and restrictions which would be
applicable whether or not the community college district
participated in a shared contract. This is the first time
these provisions have been reviewed by a policy committee.
4)California Community Colleges (CCC) contracting requirements.
Community colleges, like school districts, are required to
secure bid proposals by posting notice of such in a local
newspaper. While K-12 districts are authorized to publish in
newspapers and may also secure electronic bids/notice, this
authority is in addition to, not in place of, newspaper
notices.
Section 1 of this bill would authorize a community college
district to meet its public notice requirements by posting
such notice on its internet website/bidding platform or by
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publishing notice in a newspaper. While some districts might
continue to use newspapers to notice and secure bids, they
would not be required to do so. Contractors have argued that
newspaper notices are the only way to ensure broad public
notice of the opportunity to bid for public works projects to
existing and new contractors.
Staff recommends that Section 1 of the bill be amended to
parallel the authority extended to K-12 districts.
Section 2 of the bill authorizes a community college to enter
into continuing contracts for work, services, materials, or
supplies for up to seven years, whereas current law would
restrict the term to five years for work or services and 3
years for materials or supplies. While the University of
California (UC) and the California State University (CSU) have
no similar restrictions, the UC reports that it generally
enters into 3 year contracts that incorporate renewal
provisions that typically allow for extension of the contract
for 5-7 years, depending upon the contractor's performance.
The UC and the CSU both have centralized procurement systems
which allow a state level entity to ensure open and
competitive bid processes to secure favorable contracts for
campuses throughout the state. Community college districts are
run by a locally elected board, with much greater discretion
over its purchasing and contracting decisions. Arguably, the
continuing contract restrictions in current law balance this
autonomy to ensure open and competitive bid practices at the
local level.
Finally, this bill would not require community colleges to
participate in shared contracts but would incentivize such by
allowing districts to participate in contracts lawfully
entered into by the UC and CSU regardless of the existing
restrictions on community college contracting. Would the
elimination of these constraints in the community college
contracting provisions act as a disincentive for districts to
"share" contracts with UC and CSU?
Staff recommends the bill be amended to delete Section 2 of
the bill.
5)Current collaboration of segments. During the March 26, 2014,
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CSU Board of Trustees meeting, CSU Chancellor Timothy P.
White, UC President Janet Napolitano, and the California
Community Colleges (CCC) Chancellor Brice W. Harris gave a
joint presentation about collaboration among the three
systems. The three leaders highlighted a number of efforts
that are leading to extended collaboration among the systems
including, but not limited to, streamlining student transfer
pathways, shared administrative services, and contracts.
More recently, leadership at the CSU, CCC and UC in an effort
to identify opportunities to find synergies and to encourage
working smarter, and have launched
http://www.uknowledgeshare.com, an online collaborative site
created to encourage the sharing of information, ideas and
high-impact practices in support of improved administrative
performance, service and outcomes.
SUPPORT
None received.
OPPOSITION
None received.
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