BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1185 (Ridley-Thomas) - Los Angeles Unified School District:
best value procurement: pilot program.
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|Version: May 20, 2015 |Policy Vote: ED. 6 - 2 |
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|Urgency: No |Mandate: No |
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|Hearing Date: July 6, 2015 |Consultant: Jillian Kissee |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: This bill, an urgency measure, authorizes a pilot
program for the Los Angeles Unified School District (LAUSD) to
use best value procurement for projects over $1 million and
requires the Legislative Analyst Office (LAO) to report on the
use of the best value procurement method by school districts.
Fiscal
Impact:
LAUSD: Unknown, but potentially significant costs and/or
savings at the district level to the extent that (1) the
district elects to use a best value procurement method, and
(2) that the method actually realizes savings that would
surpass potential increases in costs from not choosing the
lowest bidder. This bill is permissive, and would also allow
LAUSD to continue to choose the lowest responsible bidder.
LAO indicates costs of approximately $75,000 General Fund
related to the interim and final reporting requirement.
AB 1185 (Ridley-Thomas) Page 1 of
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Background: Existing law requires the governing board of a school
district, to competitively bid, and award to the lowest
responsible bidder, any contract for a public project (as
defined) involving an expenditure of $15,000 or more. (Public
Contract Code § 20111)
Existing law, until January 1, 2017 authorizes a pilot program
at the University of California (UC) to award construction
contracts on a "best value" basis, rather than just to the
lowest bid. (Public Contract Code §10506.4)
Existing law defines "best value," for purposes of the UC, as a
procurement process whereby the lowest responsible bidder may be
selected on the basis of objective criteria with the resulting
selection representing the best combination of price and
qualifications. (Public Contract Code § 10506.5)
Proposed Law:
This bill, an urgency measure, authorizes a pilot program for
the Los Angeles Unified School District (LAUSD) to use best
value procurement for projects over $1 million before December
31, 2020 and requires the Legislative Analyst's Office (LAO) to
report on the use of the best value procurement method by school
districts. This bill's provisions are only in effect until
January 1, 2021.
Specifically, this bill:
1) Authorizes that a bidder may be selected on the basis of
best value to the governing board.
2) Generally outlines the definitions, policies, and
procedures to be followed by LAUSD consistent with current
law provisions applicable to best value contracting by the
UC (Public Contract Code, Chapter 2.1, Article 1.5,
commencing with § 10506.4) and additionally requires that:
a. Specified "skilled and trained workforce"
requirements are met.
b. Specified proceeds retention and surety bond
conditions are met.
AB 1185 (Ridley-Thomas) Page 2 of
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c. Subcontracting fair practices are followed.
d. Los Angeles Unified School District (LAUSD)
weigh, at minimum and as deemed appropriate, factors
such as relevant experience, acceptable safety record
and other factors identified in a request for proposal
in determining qualification scores for each bid, and
specifically assign preference of up to 5% to small
businesses, as defined by the LAUSD.
3) Consistent with the UC pilot, this bill requires LAUSD
to establish a procedure to prequalify bidders, as
specified. However, it prohibits a best value entity from
being prequalified unless the entity provides an
enforceable commitment that it will use a skilled and
trained workforce to perform all work on the project. This
commitment may be established in the following three ways:
a. An agreement between the entity and the school
district governing board to comply with these
requirements and the provision of monthly evidence
demonstrating such compliance during the performance
of the project/contract.
b. A project labor agreement (PLA), entered into
by the school district governing board, that includes
these requirements and that binds all
contractors/subcontractors working on the
project/contract and agreement by the entity to become
a party to the PLA.
c. Evidence that the entity has entered into a
PLA that includes these requirements and that binds
the entity and all its subcontractors at every tier
performing the project/contract.
4) Establishes the following definitions:
a. "Best value score" as the resulting score when
the bidder's price is divided by the bidder's
qualification score.
b. "Skilled journeyperson" as a worker who
either graduated from an applicable apprenticeship
AB 1185 (Ridley-Thomas) Page 3 of
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program which met specified state or federal approval
requirements, or had at least as many hours of
on-the-job experience in an applicable occupation as
would be required for graduation from a state-approved
apprenticeship program.
c. "Apprenticeable occupation" as an occupation
for which the Chief of the Division of Apprenticeship
Standards of the Department of Industrial Relations
had approved an apprenticeship program before January
1, 2015.
d. "Skilled and trained workforce" as a workforce
in which all the workers are skilled journeypersons or
apprentices registered in an apprenticeship program
approved by the Chief of the Division of
Apprenticeship Standards of the Department of
Industrial Relations and establishes the following
phased-in implementation of the proportion of skilled
journeypersons and subcontractors at every tier,
employed that must be approved apprenticeship program
graduates to meet the condition of having a "skilled
and trained workforce":
i. At least 20% by January 1, 2016.
ii. At least 30% by January 1, 2017.
iii. At least 40% by January 1, 2018.
iv. At least 50% by January 1, 2019.
v. At least 60% by January 1, 2020.
5) This bill also establishes the following reporting
requirements:
a. LAUSD to submit an interim report and a final
report, completed by an independent third party,
containing specified information on the use of best
value to the LAO by July 1, 2018 and January 1, 2020,
respectively.
b. LAO to submit an interim report to the
Legislature on the use of the best value procurement
method by school district by January 1, 2019 and a
final report by July 1, 2020 to evaluate whether the
best value procurement method should be continued,
expanded, or prohibited.
AB 1185 (Ridley-Thomas) Page 4 of
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Related
Legislation: This bill is almost identical to AB 1971
(Bocanegra, 2014) which was never acted upon on the Senate
Floor.
Staff
Comments: This bill gives the governing board of the LAUSD the
authority to use best value procurement on projects above $1
million, but does not require the district to do so. To the
extent this bill results in the LAUSD awarding contracts to
bidders other than those with the lowest bid, contracted costs
could increase. Savings attributed to higher quality
construction, reduction in contract delays, and fewer change
orders and claims are speculative and it is unclear whether
potential savings would offset any increases in contracts.
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