BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1185|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 1185
Author: Ridley-Thomas (D)
Amended: 8/31/15 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE: 6-2, 6/17/15
AYES: Liu, Block, Hancock, Leyva, Monning, Pan
NOES: Runner, Vidak
NO VOTE RECORDED: Mendoza
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 48-23, 5/22/15 - See last page for vote
SUBJECT: Los Angeles Unified School District: best value
procurement: pilot program
SOURCE: Author
DIGEST: This bill establishes a pilot program to authorize the
Los Angeles Unified School District (LAUSD) to use a best value
procurement method, before December 31, 2020, for public
projects that exceed $1 million, and requires submission of
specified reports on the use of this procurement method.
ANALYSIS:
Existing law:
1)Requires the governing board of a school district, to
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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)
2)Authorizes, until January 1, 2017, 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)
3)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)
This bill:
1)Authorizes the governing board of the LAUSD, before December
31, 2020, to use best value procurement for projects over $1
million.
2)Outlines the definitions, policies, and procedures to be
followed by the 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.
c) Subcontracting fair practices are followed.
d) 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)Establishes the following additional definitions for purposes
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of the pilot:
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 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 30% by January 1, 2016.
ii) At least 40% by January 1, 2017.
iii) At least 50% by January 1, 2018.
iv) At least 60% by January 1, 2019.
v) At least 70% by January 1, 2020.
4)Provides that, for an apprenticeable occupation with no
approved program prior to January 1, 1995, up to one-half of
the apprenticeship program graduate percentage requirements
may be met by skilled journeypersons who commenced work in the
occupation prior to the approval of an applicable apprentice
program in the county of the project's location.
5)Prohibits the prequalification or shortlisting of a best value
entity absent an enforceable commitment to use a skilled and
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trained workforce for all work on the project/contract as
applicable and provides that this commitment may be
established by:
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.
6)Clarifies that the best value procurement method is not
intended to change guideline, criterion, procedure, or
requirement of the governing board to let a project contract
to the lowest responsible bidder other than those specifically
provided for in the bill's provisions.
7)Requires a school district that uses the best value
procurement method to submit an interim and final report,
prepared by an independent third party, on its use, to be
delivered to the appropriate policy and fiscal committees of
the Legislature, as specified.
8)Sunsets these provisions on January 1, 2021.
Comments
1)Need for the bill. According to the author, this bill will
empower LAUSD to consider qualifications other than just
price. The current lowest bidder process restricts the
ability of school districts to evaluate bidders on the basis
of prior school construction experience, previous violations
of health and safety laws, disqualification or removal from
prior school construction jobs, and financial stability. This
bill can ensure that the district can consider the bidder's
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experience or knowledge to navigate the school construction
process when selecting a contractor, minimizing project delays
and cost overruns.
2)Best Value Pilot Program. SB 667 (Migden, Chapter 367,
Statutes of 2006) established a pilot program for the
University of California (UC). Initially authorized for five
years, the bill allowed the UC San Francisco to award
contracts based on the best value for the university. Under
this process, UC prequalifies bidders, then evaluates the bid
based on answers to a separate best value questionnaire and
assigns a qualification score. UC then divides each bidder's
price by its qualification score. The lowest resulting cost
per quality point represents the best value bid.
In a report to the Legislature in January 2010, the UC
reported that 23 contracts totaling $158.3 million were issued
under the best value pilot program. Of the 23 contracts, 12
contracts were low bid contracts. According to the report,
the "University Representatives for all these projects [four
completed and two almost completed projects] have been
unanimous in their praise of this process that has already
demonstrated numerous advantages such as decreased bid
protests and communication problems, decreased the need for
multiple inspections and re-work, decreased disputes, change
order requests, claims and litigation and increased incentives
for contractors to perform their work safety and to adhere to
high labor and quality standards." UC concludes that the best
value pilot program fosters better quality work, less labor
and safety problems, better qualified persons/contractors,
better on-time completion, and better on-budget performance.
In 2011, SB 835 (Wolk, Chapter 636, Statutes of 2011),
expanded the authority to all UC campuses and extended the
sunset from January 1, 2012, to January 1, 2017.
The provisions of this bill are generally based upon the pilot
program authorized for the UC, but codify more prescriptive
requirements around labor, contractors and subcontractors, and
the weighting of certain factors in the evaluation of bids.
3)Skilled workforce provisions. The provisions of this bill
relative to a skilled workforce are very similar to recently
adopted provisions regarding the use of a design-build method
for awarding public works contracts by state and local
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agencies (SB 785, Chapter 931, Statutes of 2014), as well as
contracts for the construction, alteration, demolition,
installation, repair, or maintenance work at petroleum
refineries (SB 54, Chapter 795, Statutes of 2013). In
addition, these provisions were a component of SB 566
(O'Donnell), which was heard and passed by the Senate
Education Committee on June 10, 2015, by a vote of 6-2.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
According to the Senate Appropriations Committee, there are
unknown, but potentially significant 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 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.
SUPPORT: (Verified8/28/15)
None received
OPPOSITION: (Verified8/28/15)
None received
ASSEMBLY FLOOR: 48-23, 5/22/15
AYES: Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos,
Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman,
Frazier, Eduardo Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray,
Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez,
Low, McCarty, Medina, Mullin, Nazarian, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Ting, Wilk, Williams, Wood, Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Chang, Chávez,
Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones,
Kim, Lackey, Maienschein, Mathis, Mayes, Melendez, Obernolte,
Patterson, Steinorth, Wagner
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NO VOTE RECORDED: Alejo, Brough, Cristina Garcia, Gipson,
Linder, O'Donnell, Olsen, Waldron, Weber
Prepared by:Kathleen Chavira / ED. / (916) 651-4105
8/30/15 19:06:25
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