Amended in Assembly May 6, 2015

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 amended, 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 These provisions would be repealed on January 1, 2021.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.

begin insert

6(e) “Best value score” means the resulting score when the
7school district divides the bidder’s price by the bidder’s
8qualification score.

end insert
begin delete

9(e)

end delete

10begin insert(f)end insert “Demonstrated management competency” means the
11experience, competency, capability, and capacity of the proposed
12management staffing to complete projects of similar size, scope,
13or complexity.

begin delete

14(f)

end delete

15begin insert(g)end insert “Financial condition” means the financial resources needed
16to perform the contract. The criteria used to evaluate a bidder’s
17financial condition shall include, at a minimum, capacity to obtain
18all required payment bonds and required insurance.

begin delete

19(g)

end delete

20begin insert(h)end insert “Governing board” or “governing board of the school
21district” means the governing board of the Los Angeles Unified
22School District.

begin delete

23(h)

end delete

24begin insert(i)end insert “Labor compliance” means the ability to comply with, and
25past performance with, contract and statutory requirements for the
26payment of wages and qualifications of the workforce. The criteria
27used to evaluate a bidder’s labor compliance shall include, at a
28minimum, the bidder’s ability to comply with the apprenticeship
29requirements of the California Apprenticeship Council and the
30Department of Industrial Relations, its past conformance with such
31 requirements, and its past conformance with requirements to pay
32prevailing wages on public works projects.

begin delete

33(i)

end delete

34begin insert(j)end insert “Project” has the same meaning as “public project” as defined
35in subdivision (c) of Section 22002.

begin delete

36(j)

end delete

37begin insert(k)end insert “Qualifications” means financial condition, relevant
38experience, demonstrated management competency, labor
39compliance,begin delete skilled and trained workforce,end delete the safety record of the
40bidder, and,begin delete if required by the bidding document, some or all ofend delete
P4    1begin insert to the extent relevant,end insert the preceding qualifications as they pertain
2tobegin insert allend insert subcontractors proposed to be used by the bidder for
3designated portions of the work.

begin delete

4(k)

end delete

5begin insert(l)end insert “Relevant experience” means the experience, competency,
6capability, and capacity to complete projects of similar size, scope,
7or complexity.

begin delete

8(l)

end delete

9begin insert(m)end insert “Safety record” shall be deemed “acceptable”begin insert as determined
10by the school district. In its determination, the school district shall
11consider, but is not required to find, a contractor’s safety record
12as acceptableend insert
if its experience modification rate for the most recent
13three-year period is an average of 1.00 or less, and its average total
14recordable injury or illness rate and average lost work rate for the
15most recent three-year period do not exceed the applicable
16statistical standards for its business category, or if the bidder is a
17party to an alternative dispute resolution system as provided for
18in Section 3201.5 of the Labor Code.

begin delete

19(m)

end delete

20begin insert(n)end insert “School district” means the Los Angeles Unified School
21District.

begin delete

22(n)

end delete

23begin insert(o)end insert “Skilled and trained workforce” means a workforce that
24meets all of the following conditions:

25(1) All the workers are either skilled journeypersons or
26apprentices registered in an apprenticeship program approved by
27the Chief of the Division of Apprenticeship Standards.

28(2) (A) As of January 1, 2016, at leastbegin delete 20end deletebegin insert 30end insert percent of the
29skilled journeypersons employed to perform work on the contract
30or project by the entity and each of its subcontractors at every tier
31are graduates of an apprenticeship program for the applicable
32occupation that was either approved by the Chief of the Division
33of Apprenticeship Standards pursuant to Section 3075 of the Labor
34Code or located outside California and approved for federal
35 purposes pursuant to the apprenticeship regulations adopted by
36the federal Secretary of Labor.

37(B) As of January 1, 2017, at leastbegin delete 30end deletebegin insert 40end insert percent of the skilled
38journeypersons employed to perform work on the contract or
39project by the entity and each of its subcontractors at every tier
40are graduates of an apprenticeship program for the applicable
P5    1occupation that was either approved by the Chief of the Division
2of Apprenticeship Standards pursuant to Section 3075 of the Labor
3Code or located outside California and approved for federal
4purposes pursuant to the apprenticeship regulations adopted by
5the federal Secretary of Labor.

6(C) As of January 1, 2018, at leastbegin delete 40end deletebegin insert 50end insert percent of the skilled
7journeypersons employed to perform work on the contract or
8project by the entity and each of its subcontractors at every tier
9are graduates of an apprenticeship program for the applicable
10occupation that was either approved by the Chief of the Division
11of Apprenticeship Standards pursuant to Section 3075 of the Labor
12Code or located outside California and approved for federal
13purposes pursuant to the apprenticeship regulations adopted by
14the federal Secretary of Labor.

15(D) As of January 1, 2019, at leastbegin delete 50end deletebegin insert 60end insert percent of the skilled
16journeypersons employed to perform work on the contract or
17project by the entity and each of its subcontractors at every tier
18are graduates of an apprenticeship program for the applicable
19occupation that was either approved by the Chief of the Division
20of Apprenticeship Standards pursuant to Section 3075 of the Labor
21Code or located outside California and approved for federal
22purposes pursuant to the apprenticeship regulations adopted by
23the federal Secretary of Labor.

24(E) As of January 1, 2020, at leastbegin delete 60end deletebegin insert 70end insert percent of the skilled
25journeypersons employed to perform work on the contract or
26project by the entity and each of its subcontractors at every tier
27are graduates of an apprenticeship program for the applicable
28occupation that was either approved by the Chief of the Division
29of Apprenticeship Standards pursuant to Section 3075 of the Labor
30Code or located outside California and approved for federal
31purposes pursuant to the apprenticeship regulations adopted by
32the federal Secretary of Labor.

33(3) For an apprenticeable occupation in which no apprenticeship
34program had been approved by the chief prior to January 1, 1995,
35up to one-half of the graduation percentage requirements of
36paragraph (2) may be satisfied by skilled journeypersons who
37commenced working in the apprenticeable occupation prior to the
38chief’s approval of an apprenticeship program for that occupation
39in the county in which the project is located.

begin delete

40(o)

end delete

P6    1begin insert(p)end insert “Skilled journeyperson” means a worker who either:

2(1) Graduated from an apprenticeship program for the applicable
3occupation that was approved by the chief or located outside
4California and approved for federal purposes pursuant to the
5apprenticeship regulations adopted by the federal Secretary of
6Labor.

7(2) Has at least as many hours of on-the-job experience in the
8applicable occupation as would be required to graduate from an
9apprenticeship program for the applicable occupation that is
10approved by the chief.

11

20119.2.  

(a) This article provides for a pilot program for the
12Los Angeles Unified School District to use best value procurement
13for projects over one million dollars ($1,000,000).

14(b) The governing board, for projects over one million dollars
15($1,000,000), before December 31, 2020, may use the best value
16procurement method in accordance with this article.

17(c) The governing board of the school district shall let any
18contract for a project pursuant to this article to the selected bidder
19that represents the best value or else reject all bids.

20(d) The bidder may be selected on the basis of the best value to
21the governing board of the school district. In order to implement
22this method of selection, the governing board of the school district
23shall adopt and publish procedures and required guidelines for
24evaluating the qualifications of the bidders that ensure the best
25value selections by the school district are conducted in a fair and
26impartial manner. These procedures and guidelines shall conform
27to this article and shall be mandatory for the school district when
28using best value selection.

29(e) If the governing board of the school district deems it to be
30for the best interest of the school district, the governing board of
31the school district, on the refusal or failure of the selected bidder
32for a project to execute a tendered contract, may award it to the
33begin delete second lowest scored bidder that represents the best value.end deletebegin insert bidder
34with the second lowest best value score.end insert
If the second bidder fails
35or refuses to execute the contract, the governing board of the school
36district may likewise award it to thebegin insert bidder with theend insert third lowest
37begin delete scored bidder.end deletebegin insert best value score.end insert

38(f) (1) If the school district elects to award a project pursuant
39to this section, retention proceeds withheld by the district from the
40selected best value contractor shall not exceed 5 percent if a
P7    1performance and payment bond, issued by an admitted surety
2insurer, is required in the solicitation of bids.

3(2) In a contract between the selected best value contractor and
4a subcontractor, and in a contract between a subcontractor and any
5subcontractor thereunder, the percentage of the retention proceeds
6withheld shall not exceed the percentage specified in the contract
7between the district and the selected best value contractor. If the
8selected best value contractor provides written notice to a
9subcontractor that, prior to or at the time the bid is requested, a
10bond may be required and the subcontractor subsequently is unable
11or refuses to furnish a bond to the selected best value contractor,
12then the selected best value contractor may withhold retention
13proceeds in excess of the percentage specified in the contract
14between the district and the selected best value contractor from
15any payment made by the selected best value contractor to the
16subcontractor.

17(g) All subcontractors bidding on contracts pursuant to this
18chapter shall be afforded the protection contained in Chapter 4
19(commencing with Section 4100) of Part 1.

20

20119.3.  

The governing board of the school district shall
21proceed in accordance with the following when awarding best
22value contracts under this article:

23(a) The school district shall prepare a solicitation for bids and
24give notice pursuant to Section 20112.

25(b) begin insert(1)end insertbegin insertend insert The school district shall establish a procedure to
26prequalify bidders as required by this code. Information submitted
27by the bidder as part of the evaluation process shall not be open
28to public inspection to the extent that information is exempt from
29disclosure under the California Public Records Act (Chapter 3.5
30(commencing with Section 6250) of Division 7 of Title 1 of the
31Government Code).

begin insert

32(2) A best value entity shall not be prequalified or shortlisted
33unless the entity provides an enforceable commitment to the
34governing board that the entity and its subcontractors at every
35tier will use a skilled and trained workforce to perform all work
36on the project or contract that falls within an apprenticeable
37occupation in the building and construction trades.

end insert
begin insert

38(3) An entity’s commitment that a skilled and trained workforce
39will be used to perform the project or contract may be established
40by any of the following:

end insert
begin insert

P8    1(A) The entity’s agreement with the school district that the entity
2and its subcontractors at every tier will comply with the
3requirements of this subdivision and that the entity will provide
4the director with evidence, on a monthly basis while the project
5or contract is being performed, that the entity and its
6subcontractors are complying with the requirements of this
7subdivision.

end insert
begin insert

8(B) If the governing board has entered into a project labor
9agreement that will bind all contractors and subcontractors
10performing work on the project or contract and that includes the
11requirements of this subdivision, the entity’s agreement that it will
12become a party to that project labor agreement.

end insert
begin insert

13(C) Evidence that the entity has entered into a project labor
14agreement that includes the requirements of this subdivision and
15that will bind the entity and all its subcontractors at every tier
16performing the project or contract.

end insert

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

18(1) Invite prequalified bidders to submit sealed bids in the
19manner prescribed by this article.

20(2) Include a section identifying and describing the following:

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

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

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

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

32

20119.4.  

Selection of the best value contractor shall be made
33as follows:

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

begin delete

37(2) Factors in determining a qualification score shall include,
38but are not limited to, relevant experience, skilled and trained
39workforce, and acceptable safety record and shall be weighted in
40accordance with the following:

P9    1(A) At least 50 percent of the total weight or consideration shall
2be given to the following factors: relevant expertise, skilled and
3trained workforce, and acceptable safety record. A factor listed in
4this subparagraph shall not make up less than 15 percent of the
5total weight or consideration. Other factors may be included, in
6addition to relevant experience, skilled and trained workforce, and
7acceptable safety record, in determining a qualification score.

8(B) No more than 50 percent of the total weight or consideration
9shall be given to price. A bidder that qualifies as a certified small
10business shall receive a 5-percent bid preference.

end delete
begin insert

11(2) Qualification scores shall be determined by using only the
12criteria and selection procedures specifically identified in the
13request for proposals. The following minimum factors, however,
14shall be weighted as deemed appropriate by the school district:

end insert
begin insert

15(A) Relevant experience.

end insert
begin insert

16(B) Safety record.

end insert
begin insert

17(C) Other factors identified in the request for proposal.

end insert

18(b) To determine the best value contractor, the school district
19shall divide each bidder’s price by its qualifications score. A
20preference of up to 5 percent shall be applied to the price of a bid
21submitted by a small business, as defined by the school district,
22before dividing the bidder’s price by its qualification score. The
23lowest resulting cost per quality point will represent the best value
24bid. The award of the contract shall be made to the bidder whose
25bid is determined, by the school district in writing, to be the best
26value to the school district.

27(c) The school district shall issue a written decision of its
28contract award or else reject all bids.

29(d) Upon issuance of a contract award, the school district shall
30publicly announce its award identifying the project, the project
31price, the best value contractor to which the award is made, as well
32as the prices, qualification scores, and resulting costs per
33qualification point for all responsive bidders. The contract file
34shall include documentation sufficient to support the decision to
35award.

36

20119.5.  

(a) (1) A school district that uses the best value
37procurement method pursuant to this article shall submit to the
38Legislative Analyst the following reports completed by an
39independent third party:

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

P10   1(B) A final report on or before January 1, 2020.

2(2) A report shall include, but is not limited to, the following
3information:

4(A) A description of the projects awarded using the best value
5procedures.

6(B) The contract award amounts.

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

8(D) A description of any written protests concerning any aspect
9of the solicitation, bid, or award of the best value contracts,
10including the resolution of the protests.

11(E) A description of the prequalification process.

12(F) The criteria used to evaluate the bids, including the
13weighting of the criteria and an assessment of the effectiveness of
14the methodology.

15(G) If a project awarded under this article has been completed,
16an assessment of the project performance, to include a summary
17of any delays or cost increases.

18(b) (1) The Legislative Analyst shall submit an interim report
19to the appropriate policy and fiscal committees of the Legislature
20on the use of the best value procurement method by school districts
21on or before January 1, 2019, and a final report on or before July
221, 2020. The report may include the information provided from
23the school district reports pursuant to subdivision (a) and any
24pertinent information that the Legislative Analyst deems instructive
25in evaluating whether the best value procurement method should
26be continued, expanded, or prohibited.

27(2) The requirement for submitting a report imposed pursuant
28to this subdivision is inoperative on January 1, 2021, pursuant to
29Section 10231.5 of the Government Code.

30

20119.6.  

Except as otherwise provided in this article, the best
31value procurement method is not intended to change any guideline,
32criterion, procedure, or requirement of the governing board of the
33school district to let a contract for a project to the lowest
34responsible bidder or else reject all bids.

35

20119.7.  

This article shall remain in effect only until January
361, 2021, and as of that date is repealed, unless a later enacted
37statute, that is enacted before January 1, 2021, deletes or extends
38that date.

39

SEC. 2.  

The Legislature finds and declares that a special law
40is necessary and that a general law cannot be made applicable
P11   1within the meaning of Section 16 of Article IV of the California
2Constitution because of the need to establish a pilot project for the
3Los Angeles Unified School District to determine the potential
4benefits and consequences of using best value procurement to
5facilitate infrastructure improvements and ease fiscal impacts.



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