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 These provisions would be repealed on January 1, 2021.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:
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:
(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
21(c) It is the intent of the Legislature to provide an optional,
22alternative procedure for bidding and building school construction
As used in this article:
25(a) “Apprenticeable Occupation” means an occupation for which
26the Chief of the Division of
begin delete Aprenticeshipend delete
27 Standards had approved an apprenticeship program pursuant to
28Section 3075 of the Labor Code 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
P3 1selection representing the best combination of price and
3(c) “Best value contract” means a competitively bid contract
4entered into pursuant to this article.
5(d) “Best value contractor” means a properly licensed person,
6firm, or corporation that submits a bid for and is awarded a best
8(e) “Best value score” means the resulting score when the school
9district divides the bidder’s price by the bidder’s qualification
11(f) “Demonstrated management competency” means the
12experience, competency, capability, and capacity of the proposed
13management staffing to complete projects of similar size, scope,
15(g) “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.
19(h) “Governing board” or “governing board of the school
20district” means the governing board of the Los Angeles Unified
22(i) “Labor compliance” means the ability to comply with, and
23past performance with, contract and statutory requirements for the
24payment of wages and qualifications of the workforce. The criteria
25used to evaluate a bidder’s labor compliance shall include, at a
26minimum, the bidder’s ability to comply with the apprenticeship
27requirements of the California Apprenticeship Council and the
28Department of Industrial Relations, its past conformance with such
29 requirements, and its past conformance with requirements to pay
30prevailing wages on public works projects.
31(j) “Project” has the same meaning as “public project” as defined
32in subdivision (c) of Section 22002.
33(k) “Qualifications” means financial condition, relevant
34experience, demonstrated management competency, labor
35compliance, the safety record of the bidder, and, to the extent
36relevant, the preceding qualifications as they pertain to all
37subcontractors proposed to be used by the bidder for designated
38portions of the work.
P4 1(l) “Relevant experience” means the experience, competency,
2capability, and capacity to complete projects of similar size, scope,
4(m) “Safety record” shall be deemed “acceptable” as determined
5by the school district. In its determination, the school district shall
6consider, but is not required to find, a contractor’s safety record
7as acceptable if its experience modification rate for the most recent
8three-year period is an average of 1.00 or less, and its average total
9recordable injury or illness rate and average lost work rate for the
10most recent three-year period do not exceed the applicable
11statistical standards for its business category, or if the bidder is a
12party to an alternative dispute resolution system as provided for
13in Section 3201.5 of the Labor Code.
14(n) “School district” means the Los Angeles Unified School
16(o) “Skilled and trained workforce” means a workforce that
17meets all of the following conditions:
18(1) All the workers are either skilled journeypersons or
19apprentices registered in an apprenticeship program approved by
20the Chief of the Division of Apprenticeship Standards.
21(2) (A) As of January 1, 2016, at least 30 percent of the skilled
22journeypersons employed to perform work on the contract or
23project by the entity and each of its subcontractors at every tier
24are graduates of an apprenticeship program for the applicable
25occupation that was either approved by the Chief of the Division
26of Apprenticeship Standards pursuant to Section 3075 of the Labor
27Code or located outside California and approved for federal
28 purposes pursuant to the apprenticeship regulations adopted by
29the federal Secretary of Labor.
30(B) As of January 1, 2017, at least 40 percent of the skilled
31journeypersons employed to perform work on the contract or
32project by the entity and each of its subcontractors at every tier
33are graduates of an apprenticeship program for the applicable
34occupation that was either approved by the Chief of the Division
35of Apprenticeship Standards pursuant to Section 3075 of the Labor
36Code or located outside California and approved for federal
37purposes pursuant to the apprenticeship regulations adopted by
38the federal Secretary of Labor.
39(C) As of January 1, 2018, at least 50 percent of the skilled
40journeypersons employed to perform work on the contract or
P5 1project by the entity and each of its subcontractors at every tier
2are graduates of an apprenticeship program for the applicable
3occupation that was either approved by the Chief of the Division
4of Apprenticeship Standards pursuant to Section 3075 of the Labor
5Code or located outside California and approved for federal
6purposes pursuant to the apprenticeship regulations adopted by
7the federal Secretary of Labor.
8(D) As of January 1, 2019, at least 60 percent of the skilled
9journeypersons employed to perform work on the contract or
10project by the entity and each of its subcontractors at every tier
11are graduates of an apprenticeship program for the applicable
12occupation that was either approved by the Chief of the Division
13of Apprenticeship Standards pursuant to Section 3075 of the Labor
14Code or located outside California and approved for federal
15purposes pursuant to the apprenticeship regulations adopted by
16the federal Secretary of Labor.
17(E) As of January 1, 2020, at least 70 percent of the skilled
18journeypersons employed to perform work on the contract or
19project by the entity and each of its subcontractors at every tier
20are graduates of an apprenticeship program for the applicable
21occupation that was either approved by the Chief of the Division
22of Apprenticeship Standards pursuant to Section 3075 of the Labor
23Code or located outside California and approved for federal
24purposes pursuant to the apprenticeship regulations adopted by
25the federal Secretary of Labor.
26(3) For an apprenticeable occupation in which no apprenticeship
27program had been approved by the chief prior to January 1, 1995,
28up to one-half of the graduation percentage requirements of
29paragraph (2) may be satisfied by skilled journeypersons who
30commenced working in the apprenticeable occupation prior to the
31chief’s approval of an apprenticeship program for that occupation
32in the county in which the project is located.
33(p) “Skilled journeyperson” means a worker who either:
34(1) Graduated from an apprenticeship program for the applicable
35occupation that was approved by the chief or located outside
36California and approved for federal purposes pursuant to the
37apprenticeship regulations adopted by the federal Secretary of
39(2) Has at least as many hours of on-the-job experience in the
40applicable occupation as would be required to graduate from an
P6 1apprenticeship program for the applicable occupation that is
2approved by the chief.
(a) This article provides for a pilot program for the
4Los Angeles Unified School District to use best value procurement
5for projects over one million dollars ($1,000,000).
6(b) The governing board, for projects over one million dollars
7($1,000,000), before December 31, 2020, may use the best value
8procurement method in accordance with this article.
9(c) The governing board of the school district shall let any
10contract for a project pursuant to this article to the selected bidder
11that represents the best value or else reject all bids.
13 The bidder may be selected on the basis of the best value to
14the governing board of the school district. In order to implement
15this method of selection, the governing board of the school district
16shall adopt and publish procedures and required guidelines for
17evaluating the qualifications of the bidders that ensure the best
18value selections by the school district are conducted in a fair and
19impartial manner. These procedures and guidelines shall conform
20to this article and shall be mandatory for the school district when
21using best value selection.
23 If the governing board of the school district deems it to be
24for the best interest of the school district, the governing board of
25the school district, on the refusal or failure of the selected bidder
26for a project to execute a tendered contract, may award it to the
27 bidder with the second lowest best value score. If the second bidder
28fails or refuses to execute the contract, the governing board of the
29school district may likewise award it to the bidder with the third
30lowest best value score.
34(f) (1) If the school district elects to award a project pursuant
35to this section, retention proceeds withheld by the district from the
36selected best value contractor shall not exceed 5 percent if a
37performance and payment bond, issued by an admitted surety
38insurer, is required in the solicitation of bids.
39(2) In a contract between the selected best value contractor and
40a subcontractor, and in a contract between a subcontractor and any
P7 1subcontractor thereunder, the percentage of the retention proceeds
2withheld shall not exceed the percentage specified in the contract
3between the district and the selected best value contractor. If the
4selected best value contractor provides written notice to a
5subcontractor that, prior to or at the time the bid is requested, a
6bond may be required and the subcontractor subsequently is unable
7or refuses to furnish a bond to the selected best value contractor,
8then the selected best value contractor may withhold retention
9proceeds in excess of the percentage specified in the contract
10between the district and the selected best value contractor from
11any payment made by the selected best value contractor to the
13(g) All subcontractors bidding on contracts pursuant to this
14chapter shall be afforded the protection contained in Chapter 4
15(commencing with Section 4100) of Part 1.
The governing board of the school district shall
17proceed in accordance with the following when awarding best
18value contracts under this article:
19(a) The school district shall prepare a solicitation for bids and
20give notice pursuant to Section 20112.
21(b) (1) The school district shall establish a procedure to
22prequalify bidders as required by this code. Information submitted
23by the bidder as part of the evaluation process shall not be open
24to public inspection to the extent that information is exempt from
25disclosure under the California Public Records Act (Chapter 3.5
26(commencing with Section 6250) of Division 7 of Title 1 of the
28(2) A best value entity shall not be prequalified or shortlisted
29unless the entity provides an enforceable commitment to the
30governing board that the entity and its subcontractors at every tier
31will use a skilled and trained workforce to perform all work on the
32project or contract that falls within an apprenticeable occupation
33in the building and construction trades.
34(3) An entity’s commitment that a skilled and trained workforce
35will be used to perform the project or contract may be established
36by any of the following:
37(A) The entity’s agreement with the school district that the entity
38and its subcontractors at every tier will comply with the
39requirements of this subdivision and that the entity will provide
begin delete directorend delete with evidence,
P8 1on a monthly basis while the project or contract is being performed,
2that the entity and its subcontractors are complying with the
3requirements of this subdivision.
4(B) If the governing board has entered into a project labor
5agreement that will bind all contractors and subcontractors
6performing work on the project or contract and that includes the
7requirements of this subdivision, the entity’s agreement that it will
8become a party to that project labor agreement.
9(C) Evidence that the entity has entered into a
10agreement that includes the requirements of this subdivision and
11that will bind the entity and all its subcontractors at every tier
12performing the project or contract.
13(c) Each solicitation for bids shall do all of the following:
14(1) Invite prequalified bidders to submit sealed bids in the
15manner prescribed by this article.
16(2) Include a section identifying and describing the following:
17(A) Criteria that the school district will consider in evaluating
18the qualifications of the bidders.
19(B) The methodology and rating or weighting system that will
20be used by the school district in evaluating bids.
21(C) The relative importance or weight assigned to the criteria
22for evaluating the qualifications of bidders identified in the request
24(d) Final evaluation of the bidders shall be done in a manner
25that prevents the identity of the bidders and the cost or price
26information from being revealed in evaluating the qualifications
27of the bidders prior to completion of qualification scoring.
Selection of the best value contractor shall be made
30(a) (1) The school district shall evaluate the qualifications of
31the bidders based solely upon the criteria set forth in the solicitation
32documents, and shall assign a qualification score to each bid.
33(2) Qualification scores shall be determined by using only the
34criteria and selection procedures specifically identified in the
35request for proposals. The following minimum factors, however,
36shall be weighted as deemed appropriate by the school district:
37(A) Relevant experience.
38(B) Safety record.
39(C) Other factors identified in the request for proposal.
P9 1(b) To determine the best value contractor, the school district
2shall divide each bidder’s price by its qualifications score. A
3preference of up to 5 percent shall be applied to the price of a bid
4submitted by a small business, as defined by the school district,
5before dividing the bidder’s price by its qualification score. The
6lowest resulting cost per quality point will represent the best value
7bid. The award of the contract shall be made to the bidder whose
8bid is determined, by the school district in writing, to be the best
9value to the school district.
10(c) The school
district shall issue a written decision of its
11contract award or else reject all bids.
12(d) Upon issuance of a contract award, the school district shall
13publicly announce its award identifying the project, the project
14price, the best value contractor to which the award is made, as well
15as the prices, qualification scores, and resulting costs per
16qualification point for all responsive bidders. The contract file
17shall include documentation sufficient to support the decision to
(a) (1) A school district that uses the best value
20procurement method pursuant to this article shall submit to the
21Legislative Analyst the following reports completed by an
22independent third party:
23(A) An interim report on or before July 1, 2018.
24(B) A final report on or before January 1, 2020.
25(2) A report shall include, but is not limited to, the following
27(A) A description of the projects awarded using the best value
29(B) The contract award amounts.
30(C) The best value contractors awarded the projects.
31(D) A description of any written protests concerning any aspect
32of the solicitation, bid, or award of the best value contracts,
33including the resolution of the protests.
34(E) A description of the prequalification process.
35(F) The criteria used to evaluate the bids, including the
36weighting of the criteria and an assessment of the effectiveness of
38(G) If a project awarded under this article has been completed,
39an assessment of the project performance, to include a summary
40of any delays or cost increases.
P10 1(b) (1) The Legislative Analyst shall submit an interim report
2to the appropriate policy and fiscal committees of the Legislature
3on the use of the best value procurement method by school districts
4on or before January 1, 2019, and a final report on or before July
51, 2020. The report may include the information provided from
6the school district reports pursuant to subdivision (a) and any
7pertinent information that the Legislative Analyst deems instructive
8in evaluating whether the best value procurement method should
9be continued, expanded, or prohibited.
10(2) The requirement for submitting a report imposed pursuant
11to this subdivision is inoperative on January 1, 2021, pursuant to
12Section 10231.5 of the Government Code.
Except as otherwise provided in this article, the best
14value procurement method is not intended to change any guideline,
15criterion, procedure, or requirement of the governing board of the
16school district to let a contract for a project to the lowest
17responsible bidder or else reject all bids.
This article shall remain in effect only until January
191, 2021, and as of that date is repealed, unless a later enacted
20statute, that is enacted before January 1, 2021, deletes or extends
The Legislature finds and declares that a special law
23is necessary and that a general law cannot be made applicable
24within the meaning of Section 16 of Article IV of the California
25Constitution because of the need to establish a pilot project for the
26Los Angeles Unified School District to determine the potential
27benefits and consequences of using best value procurement to
28facilitate infrastructure improvements and ease fiscal impacts.