BILL ANALYSIS Ó AB 1651 Page 1 Date of Hearing: April 13, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 1651 (Obernolte) - As Amended March 17, 2016 ----------------------------------------------------------------- |Policy |Utilities and Commerce |Vote:|15 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires the Public Utilities Commission (PUC) to post information related to contracts and audits on its Internet web site. Specifically, this bill: 1)Requires the PUC, no less frequently than once a month, to post the following documents and information on its Internet Web site: AB 1651 Page 2 a) A copy of each contract that the PUC enters into; b) The names, addresses, and points of contact of parties to the contract; c) The goods and services requested, as applicable; and d) The contract value. 2)Beginning July 1, 2017, requires the PUC to also post on its internet Web site all contracts entered into at its direction, regardless of whether the PUC is a party to the contract. 3)Requires the PUC to post any audits of the PUC's contracting practices conducted by the Department of General Services (DGS) on its Internet web site., FISCAL EFFECT: Increased administrative and equipment costs in the $150,000 range (special fund). According to the PUC, as many as 400 contracts are received per month, most of them paper. These paper contracts need to be scanned, uploaded, assembled, and tracked. A full time Associate Governmental Program Analyst will be needed to perform these tasks. Additionally, this project will require dedicated IT resources to manage the functions, storage, and systems for publishing all contracts and related documents on the web. AB 1651 Page 3 COMMENTS: 1)Purpose. According to the author, one of the PUC's core functions is to foster a fair contracting process that ensures public utilities are providing ratepayers with reliable service at reasonable rates. This bill provides the public with the information needed to keep the PUC accountable. This bill is sponsored by the PUC. According to the sponsor, an audit to examine PUC contracting practices was approved by the Joint Legislative Audit Committee on January 13, 2016. While the California State Auditor's report is still pending, this bill will help ensure maximum transparency moving forward. 2)PUC Contracts. DGS has the statutory authority for the competitive and non-competitive procurement of information technology goods and services for the state. In most cases, state agencies rely on the State Contracting Manual when soliciting and/or entering into a contract to provide services. Under current law, DGS has the authority to delegate authority to any state agency to acquire certain types of acquisitions. DGS has delegated authority to the PUC to award contracts for information and non-information technology goods without competitive bidding if the amount of the contract does not exceed $25,000. In 2000, the State Auditor determined that the PUC has not adequately developed or managed many of its contracts. The State Auditor further found lack of invoice review, resulting in potentially hundreds of thousands of improper charges. In response to the issues raised in the report, the PUC announced it will now require contract mangers to use competitive bid processes and will follow the State Contracting Manual. AB 1651 Page 4 This bill provides transparency regarding whether or not the PUC is consistently using the state contracting process as well as the results of any related audits. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081