BILL ANALYSIS Ó
AB 1431
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Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1431 (Gomez) - As Amended April 30, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill extends the authority to utilize job order contracting
(JOC) to all school districts through January 1, 2022.
Specifically, this bill:
AB 1431
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1)Specifies that nothing in this bill prohibits a school
district from utilizing JOC, as an alternative to any
contracting procedures that the school district is otherwise
authorized or required by law to use.
2)Authorizes a school district to utilize JOC only if the school
district has entered into a project labor agreement or
agreements 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.
3)Requires the school district to prepare an execution plan for
all modernization projects that may be eligible for JOC.
Requires the school district to select from that plan a
sufficient number of projects to be initiated as JOC during
each calendar year and to determine for each selected project
that JOC will reduce the total cost of that project.
Prohibits JOC from being used if the school district finds
that it will increase the total cost of the project.
4) Sets forth a bid process for prequalified contractors,
including the requirement that the bidder must be in
compliance with the school district's project labor agreement.
Authorizes the school district to award multiple job order
contracts.
5)Requires the school district to establish a procedure to
prequalify job order contractors using a standard
questionnaire that includes, at a minimum, the issues covered
by the standardized questionnaire and model guidelines for
rating bidders developed by the Department of Industrial
Relations (DIR). This questionnaire requires various pieces of
AB 1431
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information including, but not limited to, the following: a)
a listing of all partners; b) evidence of ability to complete
the project of similar size, scope or complexity; c) licenses,
bonds and insurance; d) information regarding workers;
compensation history, safety and apprenticeship programs; e)
safety record; f) skilled labor force availability; and g)
full disclosure of past violations, disciplinary actions, and
lawsuits. Requires all information to be verified under oath.
6)Specifies that the maximum total dollar amount that may be
awarded under a single job order contract shall not exceed $5
million in the first term of the contract or $10 million
(adjusted annually to reflect changes in the consumer price
index) if the contract is extended or renewed for the second
and final term. Specifies the contract is required to be
executed in less than 12 months, with the option to extend for
two 12 month periods, as authorized. Specifies no single job
order may exceed $1 million.
7)Requires the contract to specify parties responsible for labor
code compliance and specifies various labor code compliance
requirements; including the provision of prevailing wage and
the use of subcontractors.
8)Sets forth a process for independent job order contract
estimates, in order to prevent fraud, waste, and abuse. Makes
the issued job order available to the public for review.
9)Requires the school district, if they choose to adopt the job
order contracting process, to submit to the Office of Public
School Construction (OPSC), the Senate Committee on Business,
Professions and Economic Development and Assembly Committee on
Business, Professions and Consumer Protection, the Senate and
Assembly Committees on Education, and the Joint Legislative
Budget Committee before December 31, 2019, a report containing
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a description of each job order contract procured, and the
work under each contract completed on or before June 30, 2019.
The report shall be prepared by an independent third party and
the school district shall pay for the cost of the report.
FISCAL EFFECT:
Negligible fiscal impact. Use of JOC is voluntary and presumably
K-12 districts will choose this process for specific projects
upon determining a potential for savings in terms of project
schedule and/or costs.
COMMENTS:
1)Purpose. This bill provides an alternative and optional
procedure for bidding of public works project, known as job
order contracts (JOCs), modeled after a process currently used
in Los Angeles Unified School District (LAUSD).
2)Background. Under current law, K-12 school districts are
required to competitively bid any public works contract over
$15,000 and award the contract to the lowest responsible
bidder. The traditional method for awarding public works
contracts is through the "design-bid-build" method. A school
district would first hire an architect to design a school
facility and then issue a bid for the construction phase,
awarding the contract to the lowest bidder. Alternative
methods for awarding contracts have emerged over time,
including; a) design-build, which enables a school district to
issue a bid for both the design and construction of projects
over $10 million; b) best value, which authorizes school
districts to consider factors other than cost; and c) JOC.
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The authorization for LAUSD, and this bill, limit the amount
for each job order to $1 million and the total amount of the
initial contract for a contractor to $5 million and renewed
for two more 12-month terms for $10 million. JOC allows a
school district to identify contractors for specific tasks and
locks in the price for up to $5 million worth of work. JOC is
intended to reduce costs and accelerate completion of smaller
projects; it is not generally viewed as an appropriate method
of contracting for large, complex construction projects that
require extensive or innovative design or are likely to
encounter changes and revisions during constructions.
In its report to the Legislature in 2011, the LAUSD stated that
for "job orders completed through November 1, 2011, actual
project costs were reduced by an average of 9.26% as compared to
the estimates and the procurement time. The procurement time
savings varied among projects, but overall, produced significant
time savings and provided the LAUSD with a valuable procurement
tool."
Analysis Prepared by:Misty Feusahrens / APPR. / (916)
319-2081