California Legislature—2015–16 Regular Session

Assembly BillNo. 1185


Introduced by Assembly Member Ridley-Thomas

February 27, 2015


An act to add and repeal Article 3.3 (commencing with Section 20119) of Chapter 1 of Part 3 of Division 2 of the Public Contract Code, relating to best value procurement.

LEGISLATIVE COUNSEL’S DIGEST

AB 1185, as introduced, Ridley-Thomas. Los Angeles Unified School District: best value procurement: pilot program.

The Local Agency Public Construction Act requires the governing board of any school district to let any contract for a public project, as defined, involving an expenditure of $15,000 or more, to the lowest responsible bidder that gives security as the board requires, or else reject all bids.

This bill would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization. The bill would require the school district to submit an interim and final report to the Legislative Analyst, and would require the Legislative Analyst to submit an interim and final report to the appropriate policy and fiscal committees of the Legislature on the use of the procurement method pursuant to the bill, in accordance with a specified schedule. These provisions would be repealed on January 1, 2021.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles Unified School District.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Article 3.3 (commencing with Section 20119) is
2added to Chapter 1 of Part 3 of Division 2 of the Public Contract
3Code
, to read:

4 

5Article 3.3.  Los Angeles Unified School District -- Best Value
6Procurement
7

 

8

20119.  

(a) It is the intent of the Legislature to enable school
9districts to use cost-effective options for building and modernizing
10school facilities. The Legislature has recognized the merits of the
11best value procurement method process in the past by authorizing
12its use for projects undertaken by the University of California.

13(b) The Legislature also finds and declares that school districts
14using the best value procurement method require a clear
15understanding of the roles and responsibilities of each participant
16in the best value process. As reflected in the University of
17California report to the Legislature, the benefits of a best value
18procurement method include a reduction in contract delays, change
19orders, and claims producing a savings in both contract costs and
20administration.

21(c) It is the intent of the Legislature to provide an optional,
22alternative procedure for bidding and building school construction
23projects.

24

20119.1.  

As used in this article:

25(a) “Apprenticeable Occupation” means an occupation for which
26the Chief of the Division of Aprenticeship Standards had approved
27an apprenticeship program pursuant to Section 3075 of the Labor
28Code prior to January 1, 2015.

29(b) “Best value” means a procurement process whereby the
30selected bidder may be selected on the basis of objective criteria
31for evaluating the qualifications of bidders with the resulting
32selection representing the best combination of price and
33qualifications.

P3    1(c) “Best value contract” means a competitively bid contract
2entered into pursuant to this article.

3(d) “Best value contractor” means a properly licensed person,
4firm, or corporation that submits a bid for and is awarded a best
5value contract.

6(e) “Demonstrated management competency” means the
7experience, competency, capability, and capacity of the proposed
8management staffing to complete projects of similar size, scope,
9or complexity.

10(f) “Financial condition” means the financial resources needed
11to perform the contract. The criteria used to evaluate a bidder’s
12financial condition shall include, at a minimum, capacity to obtain
13all required payment bonds and required insurance.

14(g) “Governing board” or “governing board of the school
15district” means the governing board of the Los Angeles Unified
16School District.

17(h) “Labor compliance” means the ability to comply with, and
18past performance with, contract and statutory requirements for the
19payment of wages and qualifications of the workforce. The criteria
20used to evaluate a bidder’s labor compliance shall include, at a
21minimum, the bidder’s ability to comply with the apprenticeship
22requirements of the California Apprenticeship Council and the
23Department of Industrial Relations, its past conformance with such
24requirements, and its past conformance with requirements to pay
25prevailing wages on public works projects.

26(i) “Project” has the same meaning as “public project” as defined
27in subdivision (c) of Section 22002.

28(j) “Qualifications” means financial condition, relevant
29experience, demonstrated management competency, labor
30compliance, skilled and trained workforce, the safety record of the
31bidder, and, if required by the bidding document, some or all of
32the preceding qualifications as they pertain to subcontractors
33proposed to be used by the bidder for designated portions of the
34work.

35(k) “Relevant experience” means the experience, competency,
36capability, and capacity to complete projects of similar size, scope,
37or complexity.

38(l) “Safety record” shall be deemed “acceptable” if its experience
39modification rate for the most recent three-year period is an average
40of 1.00 or less, and its average total recordable injury or illness
P4    1rate and average lost work rate for the most recent three-year period
2do not exceed the applicable statistical standards for its business
3category, or if the bidder is a party to an alternative dispute
4resolution system as provided for in Section 3201.5 of the Labor
5Code.

6(m) “School district” means the Los Angeles Unified School
7District.

8(n) “Skilled and trained workforce” means a workforce that
9meets all of the following conditions:

10(1) All the workers are either skilled journeypersons or
11apprentices registered in an apprenticeship program approved by
12the Chief of the Division of Apprenticeship Standards.

13(2) (A) As of January 1, 2016, at least 20 percent of the skilled
14journeypersons employed to perform work on the contract or
15project by the entity and each of its subcontractors at every tier
16are graduates of an apprenticeship program for the applicable
17occupation that was either approved by the Chief of the Division
18of Apprenticeship Standards pursuant to Section 3075 of the Labor
19Code or located outside California and approved for federal
20 purposes pursuant to the apprenticeship regulations adopted by
21the federal Secretary of Labor.

22(B) As of January 1, 2017, at least 30 percent of the skilled
23journeypersons employed to perform work on the contract or
24project by the entity and each of its subcontractors at every tier
25are graduates of an apprenticeship program for the applicable
26occupation that was either approved by the Chief of the Division
27of Apprenticeship Standards pursuant to Section 3075 of the Labor
28Code or located outside California and approved for federal
29purposes pursuant to the apprenticeship regulations adopted by
30the federal Secretary of Labor.

31(C) As of January 1, 2018, at least 40 percent of the skilled
32journeypersons employed to perform work on the contract or
33project by the entity and each of its subcontractors at every tier
34are graduates of an apprenticeship program for the applicable
35occupation that was either approved by the Chief of the Division
36of Apprenticeship Standards pursuant to Section 3075 of the Labor
37Code or located outside California and approved for federal
38purposes pursuant to the apprenticeship regulations adopted by
39the federal Secretary of Labor.

P5    1(D) As of January 1, 2019, at least 50 percent of the skilled
2journeypersons employed to perform work on the contract or
3project by the entity and each of its subcontractors at every tier
4are graduates of an apprenticeship program for the applicable
5occupation that was either approved by the Chief of the Division
6of Apprenticeship Standards pursuant to Section 3075 of the Labor
7Code or located outside California and approved for federal
8purposes pursuant to the apprenticeship regulations adopted by
9the federal Secretary of Labor.

10(E) As of January 1, 2020, at least 60 percent of the skilled
11journeypersons employed to perform work on the contract or
12project by the entity and each of its subcontractors at every tier
13are graduates of an apprenticeship program for the applicable
14occupation that was either approved by the Chief of the Division
15of Apprenticeship Standards pursuant to Section 3075 of the Labor
16Code or located outside California and approved for federal
17purposes pursuant to the apprenticeship regulations adopted by
18the federal Secretary of Labor.

19(3) For an apprenticeable occupation in which no apprenticeship
20program had been approved by the chief prior to January 1, 1995,
21up to one-half of the graduation percentage requirements of
22paragraph (2) may be satisfied by skilled journeypersons who
23commenced working in the apprenticeable occupation prior to the
24chief’s approval of an apprenticeship program for that occupation
25in the county in which the project is located.

26(o) “Skilled journeyperson” means a worker who either:

27(1) Graduated from an apprenticeship program for the applicable
28occupation that was approved by the chief or located outside
29California and approved for federal purposes pursuant to the
30apprenticeship regulations adopted by the federal Secretary of
31Labor.

32(2) Has at least as many hours of on-the-job experience in the
33applicable occupation as would be required to graduate from an
34apprenticeship program for the applicable occupation that is
35approved by the chief.

36

20119.2.  

(a) This article provides for a pilot program for the
37Los Angeles Unified School District to use best value procurement
38for projects over one million dollars ($1,000,000).

P6    1(b) The governing board, for projects over one million dollars
2($1,000,000), before December 31, 2020, may use the best value
3procurement method in accordance with this article.

4(c) The governing board of the school district shall let any
5contract for a project pursuant to this article to the selected bidder
6that represents the best value or else reject all bids.

7(d) The bidder may be selected on the basis of the best value to
8the governing board of the school district. In order to implement
9this method of selection, the governing board of the school district
10shall adopt and publish procedures and required guidelines for
11evaluating the qualifications of the bidders that ensure the best
12value selections by the school district are conducted in a fair and
13impartial manner. These procedures and guidelines shall conform
14to this article and shall be mandatory for the school district when
15using best value selection.

16(e) If the governing board of the school district deems it to be
17for the best interest of the school district, the governing board of
18the school district, on the refusal or failure of the selected bidder
19for a project to execute a tendered contract, may award it to the
20second lowest scored bidder that represents the best value. If the
21second bidder fails or refuses to execute the contract, the governing
22board of the school district may likewise award it to the third lowest
23scored bidder.

24(f) (1) If the school district elects to award a project pursuant
25to this section, retention proceeds withheld by the district from the
26selected best value contractor shall not exceed 5 percent if a
27performance and payment bond, issued by an admitted surety
28insurer, is required in the solicitation of bids.

29(2) In a contract between the selected best value contractor and
30a subcontractor, and in a contract between a subcontractor and any
31subcontractor thereunder, the percentage of the retention proceeds
32withheld shall not exceed the percentage specified in the contract
33between the district and the selected best value contractor. If the
34selected best value contractor provides written notice to a
35subcontractor that, prior to or at the time the bid is requested, a
36bond may be required and the subcontractor subsequently is unable
37or refuses to furnish a bond to the selected best value contractor,
38then the selected best value contractor may withhold retention
39proceeds in excess of the percentage specified in the contract
40between the district and the selected best value contractor from
P7    1any payment made by the selected best value contractor to the
2subcontractor.

3(g) All subcontractors bidding on contracts pursuant to this
4chapter shall be afforded the protection contained in Chapter 4
5(commencing with Section 4100) of Part 1.

6

20119.3.  

The governing board of the school district shall
7proceed in accordance with the following when awarding best
8value contracts under this article:

9(a) The school district shall prepare a solicitation for bids and
10give notice pursuant to Section 20112.

11(b) The school district shall establish a procedure to prequalify
12bidders as required by this code. Information submitted by the
13bidder as part of the evaluation process shall not be open to public
14inspection to the extent that information is exempt from disclosure
15under the California Public Records Act (Chapter 3.5 (commencing
16with Section 6250) of Division 7 of Title 1 of the Government
17Code).

18(c) Each solicitation for bids shall do all of the following:

19(1) Invite prequalified bidders to submit sealed bids in the
20manner prescribed by this article.

21(2) Include a section identifying and describing the following:

22(A) Criteria that the school district will consider in evaluating
23the qualifications of the bidders.

24(B) The methodology and rating or weighting system that will
25be used by the school district in evaluating bids.

26(C) The relative importance or weight assigned to the criteria
27for evaluating the qualifications of bidders identified in the request
28for bids.

29(d) Final evaluation of the bidders shall be done in a manner
30that prevents the identity of the bidders and the cost or price
31information from being revealed in evaluating the qualifications
32of the bidders prior to completion of qualification scoring.

33

20119.4.  

Selection of the best value contractor shall be made
34as follows:

35(a) (1) The school district shall evaluate the qualifications of
36the bidders based solely upon the criteria set forth in the solicitation
37documents, and shall assign a qualification score to each bid.

38(2) Factors in determining a qualification score shall include,
39but are not limited to, relevant experience, skilled and trained
P8    1workforce, and acceptable safety record and shall be weighted in
2accordance with the following:

3(A) At least 50 percent of the total weight or consideration shall
4be given to the following factors: relevant expertise, skilled and
5trained workforce, and acceptable safety record. A factor listed in
6this subparagraph shall not make up less than 15 percent of the
7total weight or consideration. Other factors may be included, in
8addition to relevant experience, skilled and trained workforce, and
9acceptable safety record, in determining a qualification score.

10(B) No more than 50 percent of the total weight or consideration
11shall be given to price. A bidder that qualifies as a certified small
12business shall receive a 5-percent bid preference.

13(b) To determine the best value contractor, the school district
14shall divide each bidder’s price by its qualifications score. A
15preference of up to 5 percent shall be applied to the price of a bid
16submitted by a small business, as defined by the school district,
17before dividing the bidder’s price by its qualification score. The
18lowest resulting cost per quality point will represent the best value
19bid. The award of the contract shall be made to the bidder whose
20bid is determined, by the school district in writing, to be the best
21value to the school district.

22(c) The school district shall issue a written decision of its
23contract award or else reject all bids.

24(d) Upon issuance of a contract award, the school district shall
25publicly announce its award identifying the project, the project
26price, the best value contractor to which the award is made, as well
27as the prices, qualification scores, and resulting costs per
28qualification point for all responsive bidders. The contract file
29shall include documentation sufficient to support the decision to
30award.

31

20119.5.  

(a) (1) A school district that uses the best value
32procurement method pursuant to this article shall submit to the
33Legislative Analyst the following reports completed by an
34independent third party:

35(A) An interim report on or before July 1, 2018.

36(B) A final report on or before January 1, 2020.

37(2) A report shall include, but is not limited to, the following
38information:

39(A) A description of the projects awarded using the best value
40procedures.

P9    1(B) The contract award amounts.

2(C) The best value contractors awarded the projects.

3(D) A description of any written protests concerning any aspect
4of the solicitation, bid, or award of the best value contracts,
5including the resolution of the protests.

6(E) A description of the prequalification process.

7(F) The criteria used to evaluate the bids, including the
8weighting of the criteria and an assessment of the effectiveness of
9the methodology.

10(G) If a project awarded under this article has been completed,
11an assessment of the project performance, to include a summary
12of any delays or cost increases.

13(b) (1) The Legislative Analyst shall submit an interim report
14to the appropriate policy and fiscal committees of the Legislature
15on the use of the best value procurement method by school districts
16on or before January 1, 2019, and a final report on or before July
171, 2020. The report may include the information provided from
18the school district reports pursuant to subdivision (a) and any
19pertinent information that the Legislative Analyst deems instructive
20in evaluating whether the best value procurement method should
21be continued, expanded, or prohibited.

22(2) The requirement for submitting a report imposed pursuant
23to this subdivision is inoperative on January 1, 2021, pursuant to
24Section 10231.5 of the Government Code.

25

20119.6.  

Except as otherwise provided in this article, the best
26value procurement method is not intended to change any guideline,
27criterion, procedure, or requirement of the governing board of the
28school district to let a contract for a project to the lowest
29responsible bidder or else reject all bids.

30

20119.7.  

This article shall remain in effect only until January
311, 2021, and as of that date is repealed, unless a later enacted
32statute, that is enacted before January 1, 2021, deletes or extends
33that date.

34

SEC. 2.  

The Legislature finds and declares that a special law
35is necessary and that a general law cannot be made applicable
36within the meaning of Section 16 of Article IV of the California
37Constitution because of the need to establish a pilot project for the
38Los Angeles Unified School District to determine the potential
P10   1benefits and consequences of using best value procurement to
2facilitate infrastructure improvements and ease fiscal impacts.



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