BILL NUMBER: AB 975 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 26, 2015
INTRODUCED BY Assembly Member Frazier
FEBRUARY 26, 2015
An act to amend Section 10701 Sections
20101, 20111.5, and 20111.6 of the Public Contract Code,
relating to public contracts.
LEGISLATIVE COUNSEL'S DIGEST
AB 975, as amended, Frazier. California State University
Contract Law. Local Agency Public Construction Act:
bid criteria.
The Local Agency Public Construction Act authorizes the governing
board of any school district, without advertising for bids, to
authorize any public corporation or agency, including any county,
city, town, or district, to lease data-processing equipment, and to
purchase materials, supplies, equipment, automotive vehicles,
tractors, and other personal property for the district, as provided.
The act requires prospective bidders for a construction contract to
complete and submit to the governing board a prequalification
questionnaire and financial statement, and requires the board to
adopt and apply a uniform system of rating bidders on the basis of
completed questionnaires and financial statements.
This bill would also prohibit a public agency, under the act, from
disqualifying or penalizing a prospective bidder based on the bidder'
s involvement in an affirmative claim filed by the project owner or
the fact that the bidder has filed a claim against a project owner,
unless the claim is based upon a violation of the Labor Code or has
been finally adjudicated and the settlement or award provided on the
final judgment or settlement is greater than 20% of the adjusted
contract amount against the prospective bidder.
Because this bill would impose new requirements on the governing
body of a local school board, it would impose a state-mandated local
program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
The existing California State University Contract Law sets forth a
process through which contracts for projects, as defined, that are
entered into with respect to the California State University may be
competitively bid, entered into, and executed.
This bill would make nonsubstantive changes to these provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 20101 of the Public
Contract Code is amended to read:
20101. (a) Except as provided in Section 20111.5, a public entity
subject to this part may require that each prospective bidder for a
contract complete and submit to the entity a standardized
questionnaire and financial statement in a form specified by the
entity, including a complete statement of the prospective bidder's
experience in performing public works. The standardized questionnaire
may not require prospective bidders to disclose any violations of
Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of
the Labor Code committed prior to January 1, 1998, if a violation was
based on a subcontractor's failure to comply with these provisions
and the bidder had no knowledge of the subcontractor's violations.
The Department of Industrial Relations, in collaboration with
affected agencies and interested parties, shall develop model
guidelines for rating bidders, and draft the standardized
questionnaire, that may be used by public entities for the purposes
of this part. The Department of Industrial Relations, in developing
the standardized questionnaire, shall consult with affected public
agencies, cities and counties, the construction industry, the surety
industry, and other interested parties. The questionnaire and
financial statement shall be verified under oath by the bidder in the
manner in which civil pleadings in civil actions are verified. The
questionnaires and financial statements shall not be public records
and shall not be open to public inspection; however, records of the
names of contractors applying for prequalification status shall be
public records subject to disclosure under Chapter 3.5 (commencing
with Section 6250) of Division 7 of Title 1 of the Government Code.
(b) Any public entity requiring prospective bidders to complete
and submit questionnaires and financial statements, as described in
subdivision (a), shall adopt and apply a uniform system of rating
bidders on the basis of the completed questionnaires and financial
statements, in order to determine both the minimum requirements
permitted for qualification to bid, and the type and size of the
contracts upon which each bidder shall be deemed qualified to bid.
The uniform system of rating prospective bidders shall be based on
objective criteria.
(c) A public entity may establish a process for prequalifying
prospective bidders pursuant to this section on a quarterly basis and
a prequalification pursuant to this process shall be valid for one
calendar year following the date of initial prequalification.
(d) Any public entity requiring prospective bidders on a public
works project to prequalify pursuant to this section shall establish
a process that will allow prospective bidders to dispute their
proposed prequalification rating prior to the closing time for
receipt of bids. The appeal process shall include the following:
(1) Upon request of the prospective bidder, the public entity
shall provide notification to the prospective bidder in writing of
the basis for the prospective bidder's disqualification and any
supporting evidence that has been received from others or adduced as
a result of an investigation by the public entity.
(2) The prospective bidder shall be given the opportunity to rebut
any evidence used as a basis for disqualification and to present
evidence to the public entity as to why the prospective bidder should
be found qualified.
(3) If the prospective bidder chooses not to avail itself of this
process, the proposed prequalification rating may be adopted without
further proceedings.
(e) For the purposes of subdivision (a), a financial statement
shall not be required from a contractor who has qualified as a Small
Business Administration entity pursuant to paragraph (1) of
subdivision (d) of Section 14837 of the Government Code, when the bid
is no more than 25 percent of the qualifying amount provided in
paragraph (1) of subdivision (d) of Section 14837 of the Government
Code.
(f) Nothing in this section shall preclude an awarding agency from
prequalifying or disqualifying a subcontractor. The disqualification
of a subcontractor by an awarding agency does not disqualify an
otherwise prequalified contractor.
(1) Any public agency requiring prospective bidders to complete
and submit questionnaires shall not disqualify or otherwise penalize
a prospective bidder through its uniform system of rating bidders
based on either of the following:
(A) A prospective bidder is or has been involved in an affirmative
claim filed by a project owner through the courts, mediation, or
arbitration.
(B) A prospective bidder has filed a claim through the courts,
mediation, or arbitration against a project owner.
(2) (A) For purposes of this subdivision, "affirmative claim" or
"claim" does not include any claim based on a violation of the Labor
Code.
(B) Nothing in this subdivision precludes a public agency from
including in its uniform system of rating bidders criteria related to
affirmative claims that have been finally adjudicated or settled,
provided the settlement or final judgment or award on the affirmative
claim is greater than 20 percent of the adjusted contract amount
against the prospective bidder.
SEC. 2. Section 20111.5 of the Public
Contract Code is amended to read:
20111.5. (a) The governing board of the district may require that
each prospective bidder for a contract, as described under Section
20111, complete and submit to the district a standardized
questionnaire and financial statement in a form specified by the
district, including a complete statement of the prospective bidder's
financial ability and experience in performing public works. The
questionnaire and financial statement shall be verified under oath by
the bidder in the manner in which civil pleadings in civil actions
are verified. The questionnaires and financial statements shall not
be public records and shall not be open to public inspection.
(b) Any school district requiring prospective bidders to complete
and submit questionnaires and financial statements, as described in
subdivision (a), shall adopt and apply a uniform system of rating
bidders on the basis of the completed questionnaires and financial
statements, in order to determine the size of the contracts upon
which each bidder shall be deemed qualified to bid.
(c) Each prospective bidder on any contract described under
Section 20111 shall be furnished by the school district letting the
contract with a standardized proposal form that, when completed and
executed, shall be submitted as his or her bid. Bids not presented on
the forms so furnished shall be disregarded.
(d) A proposal form required pursuant to subdivision (c) shall not
be accepted from any person or other entity who is required to
submit a completed questionnaire and financial statement for
prequalification pursuant to subdivision (a), but has not done so at
least five days prior to the date fixed for the public opening of
sealed bids or has not been prequalified, pursuant to subdivision
(b), for at least one day prior to that date.
(e) Notwithstanding subdivision (d), any school district may
establish a process for prequalifying prospective bidders pursuant to
this section on a quarterly basis and may authorize that
prequalification to be considered valid for up to one calendar year
following the date of initial prequalification.
(f) (1) Any public agency requiring prospective bidders to
complete and submit questionnaires shall not disqualify or otherwise
penalize a prospective bidder through its uniform system of rating
bidders based on either of the following:
(A) A prospective bidder is or has been involved in an affirmative
claim filed by a project owner through the courts, mediation, or
arbitration.
(B) A prospective bidder has filed a claim through the courts,
mediation, or arbitration against a project owner.
(2) (A) For purposes of this subdivision, "affirmative claim" or
"claim" does not include any claim based on a violation of the Labor
Code.
(B) Nothing in this subdivision precludes a public agency from
including in its uniform system of rating bidders criteria related to
affirmative claims that have been finally adjudicated or settled,
provided the settlement or final judgment or award on the affirmative
claim is greater than 20 percent of the adjusted contract amount
against the prospective bidder.
SEC. 3. Section 20111.6 of the Public
Contract Code is amended to read:
20111.6. (a) This section shall apply only to public projects, as
defined in subdivision (c) of Section 22002, for which the governing
board of the district uses funds received pursuant to the Leroy F.
Greene School Facilities Act of 1998 (Chapter 12.5 (commencing with
Section 17070.10) of Part 10 of Division 1 of Title 1 of the
Education Code) or any funds from any future state school bond for a
public project that involves a projected expenditure of one million
dollars ($1,000,000) or more.
(b) If the governing board of the district enters into a contract
meeting the criteria of subdivision (a), then the governing board of
the district shall require that prospective bidders for a
construction contract complete and submit to the board of the
district a standardized prequalification questionnaire and financial
statement. The questionnaire and financial statement shall be
verified under oath by the bidder in the manner in which civil
pleadings in civil actions are verified. The questionnaires and
financial statements shall not be public records and shall not be
open to public inspection.
(c) The board of the district shall adopt and apply a uniform
system of rating bidders on the basis of the completed questionnaires
and financial statements. This system shall also apply to a person,
firm, or corporation that constructs a building described in Section
17406 or 17407 of the Education Code.
(d) The questionnaire and financial statement described in
subdivision (b), and the uniform system of rating bidders described
in subdivision (c), shall cover, at a minimum, the issues covered by
the standardized questionnaire and model guidelines for rating
bidders developed by the Department of Industrial Relations pursuant
to subdivision (a) of Section 20101.
(e) Each prospective bidder shall be furnished by the school
district letting the contract with a standardized proposal form that,
when completed and executed, shall be submitted as his or her bid.
Bids not presented on the forms so furnished shall be disregarded.
(f) A proposal form required pursuant to subdivision (e) shall not
be accepted from any person or other entity that is required to
submit a completed questionnaire and financial statement for
prequalification pursuant to subdivision (b) or from any person or
other entity that uses a subcontractor that is required to submit a
completed questionnaire and financial statement for prequalification
pursuant to subdivision (b), but has not done so at least 10 business
days prior to the date fixed for the public opening of sealed bids
or has not been prequalified for at least five business days prior to
that date. The district may require the completed questionnaire and
financial statement for prequalification to be submitted more than 10
business days prior to the fixed date for the public opening of
sealed bids. The district may also require the prequalification more
than five business days prior to the fixed date.
(g) (1) The board of the district may establish a process for
prequalifying prospective bidders pursuant to this section on a
quarterly or annual basis and a prequalification pursuant to this
process shall be valid for one calendar year following the date of
initial prequalification.
(2) The board shall establish a process to prequalify a person,
firm, or corporation, including, but not limited to, the prime
contractor and, if used, an electrical, mechanical, and plumbing
subcontractor, to construct a building described in Section 17406 or
17407 of the Education Code on a quarterly or annual basis. A
prequalification pursuant to this process shall be valid for one
calendar year following the date of initial prequalification.
(h) This section shall not preclude the governing board of the
district from prequalifying or disqualifying a subcontractor of any
specialty classification described in Section 7058 of the Business
and Professions Code.
(i) For purposes of this section, bidders shall include both of
the following:
(1) A prime contractor, as defined in Section 4113, that is either
of the following:
(A) A general engineering contractor described in Section 7056 of
the Business and Professions Code.
(B) A general building contractor described in Section 7057 of the
Business and Professions Code.
(2) If utilized, each electrical, mechanical, and plumbing
contractor, whether as a prime contractor or as a subcontractor, as
defined in Section 4113.
(j) If a public project covered by this section includes
electrical, mechanical, or plumbing components that will be performed
by electrical, mechanical, or plumbing contractors, a list of
prequalified general contractors and electrical, mechanical, and
plumbing subcontractors shall be made available by the school
district to all bidders at least five business days prior to the
dates fixed for the public opening of sealed bids. The district may
require the list to be made available more than five business days
prior to the fixed dates for the public opening of sealed bids.
(k) For purposes of this section, electrical, mechanical, and
plumbing subcontractors are contractors licensed pursuant to Section
7058 of the Business and Professions Code, specifically contractors
holding C-4, C-7, C-10, C-16, C-20, C-34, C-36, C-38, C-42, C-43, and
C-46 licenses, pursuant to regulations of the Contractors' State
License Board.
(l) This section shall not apply to a school district with an
average daily attendance of less than 2,500.
(m) (1) Any public agency requiring prospective bidders to
complete and submit questionnaires shall not disqualify or otherwise
penalize a prospective bidder through its uniform system of rating
bidders based on either of the following:
(A) A prospective bidder is or has been involved in an affirmative
claim filed by a project owner through the courts, mediation, or
arbitration.
(B) A prospective bidder has filed a claim through the courts,
mediation, or arbitration against a project owner.
(2) (A) For purposes of this subdivision, "affirmative claim" or
"claim" does not include any claim based on a violation of the Labor
Code.
(B) Nothing in this subdivision precludes a public agency from
including in its uniform system of rating bidders criteria related to
affirmative claims that have been finally adjudicated or settled,
provided the settlement or final judgment or award on the affirmative
claim is greater than twenty percent of the adjusted contract amount
against the prospective bidder.
(m)
(n) (1) This section shall apply only to contracts
awarded on or after January 1, 2014.
(2) The amendments made to this section by the act adding this
paragraph shall apply only to contracts awarded on or after January
1, 2015.
(n)
(o) (1) On or before January 1, 2018, the Director of
Industrial Relations shall (A) submit a report to the Legislature
evaluating whether, during the years this section has applied to
contracts, violations of the Labor Code on school district projects
have decreased as compared to the same number of years immediately
preceding the enactment of this section, and (B) recommend
improvements to the system for prequalifying contractors and
subcontractors on school district projects.
(2) A report to be submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
(o)
(p) This section shall become inoperative on January 1,
2019, and, as of July 1, 2019, is repealed.
SEC. 4. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.
SECTION 1. Section 10701 of the Public Contract
Code is amended to read:
10701. As used in this chapter:
(a) "Project" includes the erection, construction, alteration,
painting, repair, or improvement of a state structure, building,
road, or other state improvement of any kind. "Project" includes a
project located on California State University property and performed
pursuant to a contract entered into or awarded by an auxiliary
organization, as defined in Section 89901 of the Education Code, and
funded in whole or in part by public funds.
(b) "Service contract" means a contract for services in connection
with a project other than a project contract, and includes, but is
not limited to, contracts for architectural, engineering, planning,
testing, general studies, or feasibility services.
(c) "Trustees" means the Trustees of the California State
University and their designees.