Amended in Senate August 27, 2015

Amended in Senate July 16, 2015

Amended in Senate June 25, 2015

Amended in Assembly April 30, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1431


Introduced by Assembly Member Gomez

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(Coauthors: Assembly Members Cooper, Gonzalez, and Roger Hernández)

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(Coauthor: Senator Hertzberg)

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February 27, 2015


An act to amend Section 20919.15 of, and to add and repeal Article 60.4 (commencing with Section 20919.20)begin delete of,end deletebegin insert ofend insert Chapter 1 of Part 3 of Division 2begin delete ofend deletebegin insert of,end insert the Public Contract Code, relating to local public contracting.

LEGISLATIVE COUNSEL’S DIGEST

AB 1431, as amended, Gomez. Local Agency Public Construction Act: job order contracting.

Existing law, the Local Agency Public Construction Act, authorizes job order contracting, as provided, by the Los Angeles Unified School District (LAUSD), until December 31, 2020.

This bill would repeal the provisions relating to the LAUSD and would instead authorize job order contracting in a similar manner for school districts until January 1, 2022. The bill would restrict job order contracting pursuant to the bill to school districts that have entered into a project labor agreement or agreements, as defined, that will apply to all public works in excess of $25,000 undertaken by the school district through at least December 31, 2021, regardless of what contracting procedure is used to award that work. The bill would require job order contractors to submit a questionnaire to the school district containing specified information verified under oath. By expanding the crime of perjury, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 20919.15 of the Public Contract Code is
2amended to read:

3

20919.15.  

This article shall remain in effect only until January
41, 2016, and as of that date is repealed, unless a later enacted
5statute, that is enacted before January 1, 2016, deletes or extends
6that date.

7

SEC. 2.  

Article 60.4 (commencing with Section 20919.20) is
8added to Chapter 1 of Part 3 of Division 2 of the Public Contract
9Code
, to read:

10 

11Article 60.4.  Job Order Contracting for School Districts
12

 

13

20919.20.  

The Legislature finds and declares all of the
14following:

15(a) It is the intent of the Legislature, in enacting this article, to
16demonstrate an alternative and optional procedure for bidding of
17public works projects that is applicable only to schoolbegin delete districts
18other than the Los Angeles Unified School District.end delete
begin insert districts.end insert The
19Legislature has previously authorized the use of this alternative
20and optional procedurebegin delete in Article 60.3 (commencing with Section
2120219)end delete
only for the Los Angeles Unified School District, which
P3    1is using the procedure in conjunction with its project stabilization
2agreement.

3(b) Districts should be able to utilize cost-effective options for
4the delivery of public works projects, in accordance with the
5national trend, which include authorizations in California, to allow
6public entities to utilize job order contracts as a project delivery
7method.

8(c) The benefits of a job order contract project delivery system
9include accelerated completion of the projects, cost savings, and
10reduction of construction contracting complexity for the unified
11school district.

12(d) The job order contracting approach should be used for the
13purposes of reducing project cost and expediting project
14completion.

begin delete

15(e) The Legislature is uncertain of the benefits and advantages
16of job order contracting for California school districts and therefore
17 looks forward to the reports required by Section 20919.32 in order
18to fully and competently assess any further exemptions to the
19school contracting process.

end delete
begin delete

13 20(f)

end delete

21begin insert(e)end insert The availability of job order contracting as a project delivery
22method will not preclude the use of traditional methods of project
23delivery if a traditional method results in higher cost savings.

begin delete

16 24(g)

end delete

25begin insert(f)end insert It is the intent of the Legislature that job order contracts be
26competitively bid and awarded to the bidders providing the most
27qualified responsive bids. It is further the intent of the Legislature
28that school districts use the job order contract process pursuant to
29this article only if the school district has entered into a project
30labor agreement that meets the requirements of Section 2500 for
31all its public works projects.

32

20919.21.  

As used in this chapter:

33(a) “Adjustment factor” means the job order contractor’s
34competitively bid adjustment to the school district’s prices as
35published in the unit price catalog.

36(b) “Indefinite quantity” means one or more of the construction
37tasks listed in the unit price catalog.

38(c) “Job order” means a firm, fixed priced, lump-sum order
39issued by the school district to a job order contractor for a definite
P4    1project scope of work as compiled from the unit price catalog to
2be performed pursuant to a job order contract.

3(d) “Job order contract” means a contract, awarded to a most
4qualified bidder as described in paragraph (1) of subdivision (b)
5of Section 20919.24, between the school district and a licensed,
6bonded, and general liability insured contractor in which the
7contractor agrees to a fixed period, fixed-unit price, and indefinite
8quantity contract that provides for the use of job orders for public
9works or maintenance projects.

10(e) “Job order contract technical specifications” means a book,
11published by the school district, detailing the technical
12specifications with regard to quality of materials and workmanship
13to be used by the job order contractor in accomplishing the tasks
14listed in the unit price catalog.

15(f) “Job order contractor” means a licensed, bonded, and general
16liability insured contractor awarded a job order contract.

17(g) “Offer to perform work” means the job order contractor’s
18proposal for a specific job order.

19(h) “Plans and specifications” means the unit price catalog and
20the job order contract technical specifications. The scope of work
21to be performed with a job order contract is potentially, but not
22necessarily, all the tasks published in the unit price catalog.

23(i) “Project” means the specific requirements and work to be
24accomplished by the job order contractor in connection with an
25individual job order.

26(j) “Project labor agreement” means an agreement that meets
27the requirements of Section 2500.

28(k) “Project scope of work” means the document and related
29drawings, specifications, and writings referenced therein which
30together set forth the specific requirements and work to be
31accomplished by the job order contractor in connection with an
32individual job order.

33(l) “Proposal” means the job order contractor prepared document
34quoting those construction tasks listed in the unit price catalog that
35the job order contractor requires to complete the project scope of
36work, together with the appropriate quantities of each task. The
37pricing of each task shall be accomplished by multiplying the
38construction task unit price by the proposed quantity and the
39contractor’s competitively bid adjustment factor. The proposal
40shall also contain a schedule for the completion of a specific project
P5    1 scope of work as requested by the school district. The proposal
2may also contain approved drawings, work schedule, permits, or
3other documentation as the school district may require for a specific
4job order.

5(m) “Public works” has the same meaning as in Chapter 1
6(commencing with Section 1720) of Part 7 of Division 2 of the
7Labor Code.

8(n) “Public works project” has the same meaning as “public
9project,” as defined in Section 22002.

10(o) “Subcontractor” means any person, firm, or corporation,
11other than the employees of the job order contractor, who is bonded
12and general liability insured and who contracts to furnish labor,
13or labor and materials, at the worksite or in connection with a job
14order, whether directly or indirectly on behalf of the job order
15contractor.

16(p) “School district” means any school district.

17(q) “Unit price catalog” means a book containing specific
18construction tasks and the unit prices to install or demolish that
19construction. The listed tasks shall be based on generally accepted
20industry standards and information, where available, for various
21items of work to be performed by the job order contractor. The
22prices shall include the cost of materials, labor, and equipment for
23performing the items of work. The prices shall not include overhead
24and profit. All unit prices shall be developed using local prevailing
25wages.

26

20919.22.  

Provisions in this article only apply to school districts
27that choose to utilize job order contracting. A school district may
28utilize job order contracting, when permitted by this article, as an
29alternative to any contracting procedures that the school district
30is otherwise authorized or required by law to use.

31

20919.23.  

(a) The school district may utilize job order
32contracting pursuant to this article only if the school district has
33entered into a project labor agreement or agreements that will apply
34to all public works in excess of twenty-five thousand dollars
35($25,000) undertaken by the school district through at least
36December 31, 2021, regardless of what contracting procedure is
37used to award that work.

38(b) The school district shall prepare an execution plan for all
39modernization projects that may be eligible for job order
40contracting pursuant to this article. The school district shall select
P6    1from that plan a sufficient number of projects to be initiated as job
2order contracts during each calendar year and shall determine for
3each selected project that job order contracting will reduce the
4total cost of that project. Job order contracting shall not be used if
5the school district finds that it will increase the total cost of the
6project.

7

20919.24.  

Bidding for job order contracts shall progress as
8follows:

9(a) (1) The school district shall prepare a set of documents for
10job order contracts. The documents shall include a unit price
11catalog and preestablished unit prices, job order contract technical
12 specifications, and any other information deemed necessary to
13describe adequately the school district’s needs.

14(2) Any architect, engineer, or consultant retained by the school
15district to assist in the development of the job order contract
16documents shall not be eligible to participate in the preparation of
17a bid with any job order contractor.

18(b) Based on the documents prepared under subdivision (a), the
19school district shall prepare a request for bid that invites
20prequalified job order contractors to submit competitive sealed
21bids in the manner prescribed by the school district.

22(1) (A) The prequalified job order contractors, as determined
23by the school district, shall bid one or more adjustment factors to
24the unit prices listed in the unit price catalog based on the job order
25contract technical specifications. Awards shall be made to the
26prequalified bidders that the school district determines to be the
27most qualified based upon preestablished criteria made by the
28school district. The prequalified bidders must be in compliance
29with the school district’s project labor agreement.

30(B) Compliance shall constitute no more than three major
31violations on any school district projects within the last three years.
32If a contractor has more than three violations within a three-year
33period of time, the school district shall seek administrative review
34of the violations. Violations will include, but are not limited to,
35the following:

36(i) Failure to register core workers with the appropriate building
37trade union.

38(ii) Failure to assign apprentices in accordance with Section
391777.5 of the Labor Code.

40(iii) Failure to comply with subdivision (c) of Section 20919.25.

P7    1(iv) Incorrect assignment of work in accordance with the school
2district’s project labor agreement.

3(2) The school district may award multiple job order contracts
4through a request for bid. Job order contracts shall be awarded to
5the most qualified prequalified bidders described in this
6subdivision.

7(3) The request for bids may encourage the participation of local
8construction firms and the use of local subcontractors.

9(c) (1) The school district shall establish a procedure to
10prequalify job order contractors using a standard questionnaire
11that includes, at a minimum, the issues covered by the standardized
12questionnaire and model guidelines for rating bidders developed
13by the Department of Industrial Relations pursuant to subdivision
14(a) of Section 20101. This questionnaire shall require information
15including, but not limited to, all of the following:

16(A) If the job order contractor is a partnership, limited
17partnership, or other association, a listing of all of the partners or
18association members known at the time of bid submission who
19will participate in the job order contract.

20(B) Evidence that the members of the job order contractor have
21the capacity to complete projects of similar size, scope, or
22complexity, and that proposed key personnel have sufficient
23experience and training to competently manage the construction
24of the project, as well as a financial statement that assures the
25school district that the job order contractor has the capacity to
26complete the project.

27(C) The licenses, registration, and credentials required to
28perform construction, including, but not limited to, information
29on the revocation or suspension of any license, credential, or
30registration.

31(D) Evidence that establishes that the job order contractor has
32the capacity to obtain all required payment and performance
33bonding and liability insurance.

34(E) Information concerning workers’ compensation experience
35history, worker safety programs, and apprenticeship programs.

36(F) A full disclosure regarding all of the following that are
37applicable:

38(i) Any serious or willful violation of Part 1 (commencing with
39Section 6300) of Division 5 of the Labor Code or the federal
P8    1Occupational Safety and Health Act of 1970 (Public Law 91-596),
2settled against any member of the job order contractor.

3(ii) Any debarment, disqualification, or removal from a federal,
4state, or local government public works project.

5(iii) Any instance where the job order contractor, or its owners,
6officers, or managing employees submitted a bid on a public works
7project and were found to be nonresponsive, or were found by an
8awarding body not to be a responsible bidder.

9(iv) Any instance where the job order contractor, or its owners,
10officers, or managing employees defaulted on a construction
11contract.

12(v) Any violations of the Contractors’ State License Law
13(Chapter 9 (commencing with Section 7000) of Division 3 of the
14Business and Professions Code), excluding alleged violations of
15federal or state law regarding the payment of wages, benefits,
16apprenticeship requirements, or personal income tax withholding,
17or of Federal Insurance Contribution Act (FICA) withholding
18requirements settled against any member of the job order
19 contractor.

20(vi) Any bankruptcy or receivership of any member of the job
21order contractor, including, but not limited to, information
22concerning any work completed by a surety.

23(vii) Any settled adverse claims, disputes, or lawsuits between
24the owner of a public works project and any member of the job
25order contractor during the five years preceding submission of a
26bid under this article, in which the claim, settlement, or judgment
27exceeds fifty thousand dollars ($50,000). Information shall also
28be provided concerning any work completed by a surety during
29this period.

30(G) In the case of a partnership or any association that is not a
31legal entity, a copy of the agreement creating the partnership or
32association and specifying that all partners or association members
33agree to be fully liable for the performance under the job order
34contract.

35(2) The information required under this subdivision shall be
36verified under oath by the entity and its members in the manner
37in which civil pleadings in civil actions are verified. Information
38that is not a public record under the California Public Records Act
39(Chapter 3.5 (commencing with Section 6250) of Division 7 of
P9    1Title 1 of the Government Code) shall not be open to public
2inspection.

3

20919.25.  

(a) The maximum total dollar amount that may be
4awarded under a single job order contract shall not exceed five
5million dollars ($5,000,000) in the first term of the job order
6contract and, if extended or renewed pursuant to subdivision (b),
7a maximum of ten million dollars ($10,000,000) over the
8subsequent two terms of the job order contract.

9(b) Job order contracts may be executed for an initial contract
10term of no more than 12 months, with the option of extending or
11renewing the job order contract for two 12-month periods. The
12term of the job order contract shall be for the contract term or
13whenever the maximum value of the contract is achieved,
14whichever is less. All extensions or renewals shall be priced as
15provided in the request for bids. The extension or renewal shall
16be mutually agreed to by the school district and the job order
17contractor.

18(c) The school district may issue job orders to the job order
19contractor that has been awarded the job order contract. The job
20order issued to the job order contractor shall not commence for
21seven days from the time the job order was issued and the job order
22contractor shall provide a minimum of seven days’ notice for the
23addition of any subcontractor or substitution of any subcontractor
24as described in subdivision (e) of Section 20919.26. The job order
25shall be based on a project scope of work prepared by the school
26district as well as a proposal from the job order contractor who is
27awarded the job order contract. No single job order may exceed
28one million dollars ($1,000,000).

29(d) The amounts specified in subdivisions (a) and (c) shall be
30adjusted on January 1, 2016, as if this section was operative
31beginning January 1, 2004, to reflect the percentage change in the
32California Consumer Price Index, and shall be adjusted each
33January 1 thereafter to reflect the percentage change in the
34California Consumer Price Index.

35(e) It is unlawful to split or separate into smaller job orders any
36project for the purpose of evading the cost limitation provisions
37of this chapter.

38(f) All work performed under the job order contract shall be
39covered by a project labor agreement.

P10   1(g) Any change or alteration to a job order shall be in compliance
2with Section 20118.4.

3

20919.26.  

(a) All work bid under the job order contract shall
4comply with Chapter 4 (commencing with Section 4100) of Part
51 and is subject to all of the penalties and provisions set forth in
6that chapter.

7(b) For purposes of this article, if the primary job order
8contractor chooses to use subcontractors, the primary job order
9contractor is required to verify that the subcontractors possess the
10appropriate licenses and credentials required to perform
11construction.

12(c) Notwithstanding subdivision (a), the primary job order
13contractor may use subcontractors that are not listed at the time
14the job order is issued if the work to be performed under that job
15order is less than ten thousand dollars ($10,000).

16(d) If the primary job order contractor chooses to use a
17subcontractor that is not listed at the time of bid to perform work
18on a job order, all of the following apply:

19(1) The primary job order contractor shall provide public notice
20of the availability of work to be subcontracted by trade. The public
21notice shall include the scope of work; the project location; the
22name, address, and the telephone number of the primary job order
23contractor; and the closing date, time, and location for sealed bids
24to be submitted.

25(2) The primary job order contractor shall take sealed bids from
26the subcontractors solicited for the proposal. These bids shall be
27publicly opened at a prescribed time and place by the primary job
28order contractor. After the bids are opened, the job order contractor
29shall notify the school district which subcontractor was selected.

30(3) The notification shall include every subcontractor for all
31tiers and must establish the authorized subcontractor list for the
32job order. Work shall not commence prior to seven days’ notice
33of the established subcontractor list and the subsequent addition
34of any subcontractor to the job order.

35(4) The notification shall identify the scope of the work to be
36performed by each subcontractor to the job order, broken down
37by craft. If a subcontractor performs multiple crafts, the job order
38contractor shall identify the work of each craft to be performed.

39(e) If the primary job order contractor chooses to make a
40substitution to the subcontractor list, the primary job order
P11   1contractor shall provide a minimum of seven days’ notice to the
2school district along with justification as to the need for the
3substitution. The school district may request a hearing to evaluate
4the substitution request, which shall be in accordance with Chapter
54 (commencing with Section 4100) of Part 1.

6(f) If the school district determines that there has been a violation
7of Chapter 4 (commencing with Section 4100) of Part 1, including
8bid shopping by the primary job order contractor, the school district
9may terminate the job order or the contractor may lose
10authorization to proceed with awarded work subject to the school
11district’s administrative due process review, if such review is
12established pursuant to the school district’s project labor agreement.
13If the school district determines that a job order contractor has
14violated any provision set forth in Chapter 4 (commencing with
15Section 4100) of Part 1, the school district may declare the
16contractor ineligible for future job orders and may result in a loss
17of prequalification status for a period of time to be determined by
18the school district.

19

20919.27.  

(a) A job order contract shall set forth in the general
20conditions of the job order contract the party or parties responsible
21for seeing that the provisions of Article 2 (commencing with
22Section 1770) of Chapter 1 of Part 7 of Division 2 of the Labor
23Code are complied with.

24(b) For purposes of job order contracting, prevailing wages
25when required to be paid shall apply to all work ordered under the
26job order contract regardless of thresholds set forth in Section
271771.5 of the Labor Code.

28(c) The job order contractor shall pay the prevailing wage in
29effect at the time the job order is issued by the school district and
30all increases as published by the Department of Industrial Relations
31for the term of the job order contract, including all overtime,
32holiday, and shift provisions published by the Department of
33Industrial Relations.

34(d) The school district shall designate one individual to act as
35a monitor to inspect job sites for labor compliance violations at
36the request of the designated labor representative in its project
37labor agreement.

38

20919.28.  

A willful violation of Section 20919.26 occurs when
39the job order contractor or subcontractor knew or reasonably should
40have known of his or her obligations under the public works law
P12   1and deliberately fails or refuses to comply with its provisions. The
2school district using job order contracting shall publish and
3distribute to the Labor Commissioner a list of all job order
4contractors or subcontractors who violate this provision and the
5school district shall not award a job order contract or any future
6job orders under an existing job order contract to any contractor
7or subcontractor who violates this provision during the effective
8period of debarment of the contractor or subcontractor.

9

20919.29.  

For purposes of employment of apprentices on job
10order contracts, when the individual job order involves more than
11thirty thousand dollars ($30,000) or 20 working days, all general
12contractors or subcontractors shall at all times be in compliance
13with Section 1777.5 of the Labor Code and shall comply with the
14following:

15(a) Prior to commencing work on an individual job order, every
16contractor shall submit job order award information to an
17applicable apprenticeship program that can supply apprentices to
18the site of the job order. The information submitted shall include
19an estimate of the journeyman hours to be performed under the
20contract, the number of apprenticeships proposed to be employed,
21and the approximate dates the apprentices would be employed. A
22copy of this information shall also be submitted to the awarding
23agency if requested by the awarding agency.

24(b) The ratio of work performed by apprentices to journeymen
25employed in a particular craft or trade on the job order may be no
26higher than the ratio stipulated in the apprenticeship standard under
27which the apprenticeship program operates where the job order
28contractor agrees to be bound by those standards but, except as
29otherwise provided in Section 1777.5 of the Labor Code, in no
30case shall the ratio be less than one hour of apprenticeship work
31for every five hours of journeyman work.

32(c) Every apprentice employed under the job order contract shall
33be paid the prevailing rate of per diem wages for apprentices in
34the trade to which he or she is registered and shall be employed
35only at the work of the craft or trade to which he or she is
36registered.

37(d) Every apprentice employed under the job order contract
38shall be hired from the local joint labor management apprenticeship
39committee that has jurisdiction in the geographic area of the
40project.

P13   1

20919.30.  

A job order contractor or subcontractor that
2knowingly violates the provisions involving employment of
3apprentices shall forfeit as a civil penalty an amount not exceeding
4one hundred dollars ($100) for each full calendar day of
5noncompliance. The amount of this penalty shall be based on
6consideration of whether the violation was a good faith mistake
7due to inadvertence. A contractor or subcontractor that knowingly
8commits a second or subsequent violation of the provisions
9involving employment of apprentices within a three-year period
10where the noncompliance results in apprenticeship training not
11being provided as required, shall forfeit as a civil penalty a sum
12of not more than three hundred dollars ($300) for each full calendar
13day of noncompliance and shall not be awarded any further job
14orders under the job order contract and shall be precluded for a
15period of one year from bidding on any future job order contracts.

16

20919.31.  

In order to prevent fraud, waste, and abuse, the
17school district adopting job order contracting shall do all of the
18following:

19(a) Prepare for each individual job order developed under a job
20order contract an independent school district estimate. The estimate
21will be prepared prior to the receipt of the contractor’s offer to
22perform work and will be compared to the contractor’s proposed
23price to determine the reasonableness of that price before issuance
24of any job order. The basis for any adjustments to the school district
25estimate is to be documented. In the event that the contractor’s
26proposal for a given job order is found to be unreasonable, not cost
27effective, or undesirable, the school district is under no obligation
28to issue the job order to the job order contractor, and may instead
29utilize any other available procurement procedures.

30(b) The school district shall not issue a job order until the job
31order has been reviewed and approved by the appropriate level of
32management.

33(c) Once a job order has been issued, all documents pertaining
34to preparation and approval of the job order, including the
35independent school district estimate, shall be available for public
36review.

37

20919.32.  

A school district that adopts the job order contracting
38process shall also adopt a payment resolution process which may
39include, but not be limited to, the convening of a payment
40resolution committee.

P14   1

20919.33.  

This article shall remain in effect only until January
21, 2022, and as of that date is repealed, unless a later enacted
3statute, that is enacted before January 1, 2022, deletes or extends
4that date.

5

SEC. 3.  

No reimbursement is required by this act pursuant to
6Section 6 of Article XIII B of the California Constitution because
7the only costs that may be incurred by a local agency or school
8district will be incurred because this act creates a new crime or
9infraction, eliminates a crime or infraction, or changes the penalty
10for a crime or infraction, within the meaning of Section 17556 of
11the Government Code, or changes the definition of a crime within
12the meaning of Section 6 of Article XIII B of the California
13Constitution.



O

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