BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1651


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          Date of Hearing:  April 13, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          1651 (Obernolte) - As Amended March 17, 2016


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          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:








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             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.








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          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.  









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            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