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 These provisions would be repealed on January 1, 2021.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:
begin delete Occupation”end delete means an
26occupation for which the Chief of the Division of Apprenticeship
27Standards 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
P3 1for evaluating the qualifications of bidders with the resulting
2selection representing the best combination of price and
4(c) “Best value contract” means a competitively bid contract
5entered into pursuant to this article.
6(d) “Best value contractor” means a properly licensed person,
7firm, or corporation that submits a bid for and is awarded a best
9(e) “Best value score” means the resulting score when the school
10district divides the bidder’s price by the bidder’s qualification
12(f) “Demonstrated management competency” means the
13experience, competency, capability, and capacity of the proposed
14management staffing to complete projects of similar size, scope,
16(g) “Financial condition” means the financial resources needed
17to perform the contract. The criteria used to evaluate a bidder’s
18financial condition shall include, at a minimum, capacity to obtain
19all required payment bonds and required insurance.
20(h) “Governing board” or “governing board of the school
21district” means the governing board of the Los Angeles Unified
23(i) “Labor compliance” means the ability to comply with, and
24past performance with, contract and statutory requirements for the
25payment of wages and qualifications of the workforce. The criteria
26used to evaluate a bidder’s labor compliance shall include, at a
27minimum, the bidder’s ability to comply with the apprenticeship
28requirements of the California Apprenticeship Council and the
29Department of Industrial Relations, its past conformance with such
30 requirements, and its past conformance with requirements to pay
31prevailing wages on public works projects.
32(j) “Project” has the same meaning as “public project” as defined
33in subdivision (c) of Section 22002.
34(k) “Qualifications” means financial condition, relevant
35experience, demonstrated management competency, labor
36compliance, the safety record of the bidder, and, to the extent
37relevant, the preceding qualifications as they pertain to all
38subcontractors proposed to be used by the bidder for designated
39portions 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”
begin delete as determined a contractor’s
5by the school district. In its determination, the school district shall
6consider, but is not required to find,end delete
begin delete safety record experience modification rate for the most recent
7as acceptable if itsend delete
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
begin delete 30end delete percent of the
22skilled journeypersons employed to perform work on the contract
23or project 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
begin delete 40end delete 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
begin delete 50end delete 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
begin delete 60end delete 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
begin delete 70end delete 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 bidder may be selected on the basis of the best value to
10the governing board of the school district. In order to implement
11this method of selection, the governing board of the school district
12shall adopt and publish procedures and required guidelines for
13evaluating the qualifications of the bidders that ensure the best
14value selections by the school district are conducted in a fair and
15impartial manner. These procedures and guidelines shall conform
16to this article and shall be mandatory for the school district when
17using best value selection.
18(d) If the governing board of the school district deems it to be
19for the best interest of the school district, the governing board of
20the school district, on the refusal or failure of the selected bidder
21for a project to execute a tendered contract, may award it to the
22 bidder with the second lowest best value score. If the second bidder
23fails or refuses to execute the contract, the governing board of the
24school district may likewise award it to the bidder with the third
25lowest best value score.
26(e) The governing board of the school district shall let any
27contract for a project pursuant to this article to the selected bidder
28that represents the best value or else reject all bids.
29(f) (1) If the school district elects to award a project pursuant
30to this section, retention proceeds withheld by the district from the
31selected best value contractor shall not exceed 5 percent if a
32performance and payment bond, issued by an admitted surety
33insurer, is required in the solicitation of bids.
34(2) In a contract between the selected best value contractor and
35a subcontractor, and in a contract between a subcontractor and any
36subcontractor thereunder, the percentage of the retention proceeds
37withheld shall not exceed the percentage specified in the contract
38between the district and the selected best value contractor. If the
39selected best value contractor provides written notice to a
40subcontractor that, prior to or at the time the bid is requested, a
P7 1bond may be required and the subcontractor subsequently is unable
2or refuses to furnish a bond to the selected best value contractor,
3then the selected best value contractor may withhold retention
4proceeds in excess of the percentage specified in the contract
5between the district and the selected best value contractor from
6any payment made by the selected best value contractor to the
8(g) All subcontractors bidding on contracts pursuant to this
9chapter shall be afforded the protection contained in Chapter 4
10(commencing with Section 4100) of Part 1.
The governing board of the school district shall
12proceed in accordance with the following when awarding best
13value contracts under this article:
14(a) The school district shall prepare a solicitation for bids and
15give notice pursuant to Section 20112.
16(b) (1) The school district shall establish a procedure to
17prequalify bidders as required by this code. Information submitted
18by the bidder as part of the evaluation process shall not be open
19to public inspection to the extent that information is exempt from
20disclosure under the California Public Records Act (Chapter 3.5
21(commencing with Section 6250) of Division 7 of Title 1 of the
23(2) A best value entity shall not be prequalified or shortlisted
24unless the entity provides an enforceable commitment to the
25governing board that the entity and its subcontractors at every tier
26will use a skilled and trained workforce to perform all work on the
27project or contract that falls within an apprenticeable occupation
28in the building and construction trades.
29(3) An entity’s commitment that a skilled and trained workforce
30will be used to perform the project or contract may be established
31by any of the following:
32(A) The entity’s agreement with the school district that the entity
33and its subcontractors at every tier will comply with the
34requirements of this subdivision and that the entity will provide
35the governing board of the school district with evidence, on a
36monthly basis while the project or contract is being performed,
37that the entity and its subcontractors are complying with the
38requirements of this subdivision.
39(B) If the governing board has entered into a project labor
40agreement that will bind all contractors and subcontractors
P8 1performing work on the project or contract and that includes the
2requirements of this subdivision, the entity’s agreement that it will
3become a party to that project labor agreement.
4(C) Evidence that the entity has entered into a project labor
5agreement that includes the requirements of this subdivision and
6that will bind the entity and all its subcontractors at every tier
7performing the project or contract.
8(c) Each solicitation for bids shall do all of the following:
9(1) Invite prequalified bidders to submit sealed bids in the
10manner prescribed by this article.
11(2) Include a section identifying and describing the following:
12(A) Criteria that the school district will consider in evaluating
13the qualifications of the bidders.
14(B) The methodology and rating or weighting system that will
15be used by the school district in evaluating bids.
16(C) The relative importance or weight assigned to the criteria
17for evaluating the qualifications of bidders identified in the request
19(d) Final evaluation of the bidders shall be done in a manner
20that prevents the identity of the bidders and the cost or price
21information from being revealed in evaluating the qualifications
22of the bidders prior to completion of qualification scoring.
Selection of the best value contractor shall be made
25(a) (1) The school district shall evaluate the qualifications of
26the bidders based solely upon the criteria set forth in the solicitation
27documents, and shall assign a qualification score to each bid.
28(2) Qualification scores shall be determined by using only the
29criteria and selection procedures specifically identified in the
30request for proposals. The following minimum factors, however,
31shall be weighted as deemed appropriate by the school district:
32(A) Relevant experience.
33(B) Safety record.
34(C) Other factors identified in the request for proposal.
35(b) To determine the best value contractor, the school district
36shall divide each bidder’s price by its qualifications score. A
37preference of up to 5 percent shall be applied to the price of a bid
38submitted by a small business, as defined by the school district,
39before dividing the bidder’s price by its qualification score. The
40lowest resulting cost per quality point will represent the best value
P9 1bid. The award of the contract shall be made to the bidder whose
2bid is determined, by the school district in writing, to be the best
3value to the school district.
4(c) The school district shall
issue a written decision of its
5contract award or else reject all bids.
6(d) Upon issuance of a contract award, the school district shall
7publicly announce its award identifying the project, the project
8price, the best value contractor to which the award is made, as well
9as the prices, qualification scores, and resulting costs per
10qualification point for all responsive bidders. The contract file
11shall include documentation sufficient to support the decision to
(a) (1) A school district that uses the best value
14procurement method pursuant to this article shall submit to the
15Legislative Analyst the following reports completed by an
16independent third party:
17(A) An interim report on or before July 1, 2018.
18(B) A final report on or before January 1, 2020.
19(2) A report shall include, but is not limited to, the following
21(A) A description of the projects awarded using the best value
23(B) The contract award amounts.
24(C) The best value contractors awarded the projects.
25(D) A description of any written protests concerning any aspect
26of the solicitation, bid, or award of the best value contracts,
27including the resolution of the protests.
28(E) A description of the prequalification process.
29(F) The criteria used to evaluate the bids, including the
30weighting of the criteria and an assessment of the effectiveness of
32(G) If a project awarded under this article has been completed,
33an assessment of the project performance, to include a summary
34of any delays or cost increases.
begin delete(1)end delete begin delete end deleteThe Legislative Analyst shall submit an interim report
36to the appropriate policy and fiscal committees of the Legislature
37on the use of the best value procurement method by school districts
38on or before January 1, 2019, and a final report on or before July
391, 2020. The report may include the information provided from
40the school district reports pursuant to subdivision (a) and any
P10 1pertinent information that the Legislative Analyst deems instructive
2in evaluating whether the best value procurement method should
3be continued, expanded, or prohibited.
4(2) The requirement for submitting a report imposed pursuant
5to this subdivision is inoperative on January 1, 2021, pursuant to
6Section 10231.5 of the Government Code.
Except as otherwise provided in this article, the best
8value procurement method is not intended to change any guideline,
9criterion, procedure, or requirement of the governing board of the
10school district to let a contract for a project to the lowest
11responsible bidder or else reject all bids.
This article shall remain in effect only until January
131, 2021, and as of that date is repealed, unless a later enacted
14statute, that is enacted before January 1, 2021, deletes or extends
The Legislature finds and declares that a special law
17is necessary and that a general law cannot be made applicable
18within the meaning of Section 16 of Article IV of the California
19Constitution because of the need to establish a pilot project for the
20Los Angeles Unified School District to determine the potential
21benefits and consequences of using best value procurement to
22facilitate infrastructure improvements and ease fiscal impacts.