BILL ANALYSIS Ó
AB 1651
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CONCURRENCE IN SENATE AMENDMENTS
AB
1651 (Obernolte)
As Amended August 19, 2016
Majority vote
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|ASSEMBLY: |80-0 |(May 31, 2016) |SENATE: |39-0 |(August 23, |
| | | | | |2016) |
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Original Committee Reference: U. & C.
SUMMARY: Requires the California Public Utilities Commission
(CPUC) to post information related to contracts and audits on
its Internet Web site.
The Senate amendments:
1)Delete the requirement on the CPUC to post a copy of each
contract that it enters into on its Internet Web site.
2)Change the timeline for the CPUC to post specified contract
information on its Internet Web site from once a month to once
a year.
3)Delete the provision specifying that the posting requirements
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apply to contracts entered into at the direction of the CPUC,
whether or not the CPUC is a party to the contract.
EXISTING LAW:
1)Requires public contracts to be awarded by competitive
bidding, subject to certain exceptions, as specified. (Public
Contract Code Section 10295 et seq.)
2)Authorizes any state agency that receives delegated authority
to acquire goods to and make certain types of acquisitions, as
specified. (Public Contract Code Section 10332)
3)Requires the Department of General Services (DGS) to conduct
an audit of each state agency to which purchasing authority
has been delegated at least once in each three-year period to
ensure compliance with statutory requirements related to
specific contracting procedures. (Public Contract Code Section
10333)
4)Prohibits certain consultants from participating in decisions
or participating in making contracts if they have a financial
interest. (Government Code Section 1090 et seq.)
FISCAL EFFECT: According to the Senate Appropriations
Committee, this bill would have unknown, likely minor savings,
to the CPUC to post contract information on its Web site. The
CPUC estimated approximately $150,000 annually to meet monthly
reporting requirements.
COMMENTS:
1)Author's Statement: According to the author, "One of the
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CPUC's core functions is to foster a fair contracting process
that ensures public utilities are providing ratepayers with
reliable service at reasonable rates. Given the concerns that
have been raised, my hope is that AB 1651 will shine a light
on these contracting practices and provide the public with the
tools needed to keep the CPUC accountable."
2)Background: In 2000, the State Auditor published a report on
the CPUC's contracting process and found that the CPUC "does
not always adequately develop and manage its contracts. ?As a
result, the [CPUC] has paid hundreds of thousands of dollars
on invoices that include improper charges or lacked sufficient
detail." Since then, it is still unclear whether or not the
CPUC is consistently using the state contracting process for
the awarding of contracts.
3)CPUC Contracting Practices: Unless the work is of a highly
specialized nature, state agencies typically issue a request
for bids from qualified contractors and award a contract based
on the bid that demonstrates knowledge, skills, and abilities
to perform the work at the least cost. However, it is
difficult to obtain documents indicating if the CPUC-directed
regulated entities to enter into a contract because for the
most part, such contracts are either confidential or heavily
redacted. This makes it difficult for the public to determine
whether the award was made in the best interest of ratepayers
and the state.
4)August 2015 Oversight Hearing: In August 2015, the Assembly
Utilities and Commerce Committee held an oversight hearing on
the CPUC's contracting practices and examined whether or not
the CPUC is sufficiently using competitive solicitation
practices and adhering to the state's contracting rules.
Subsequently, in January 2016, the Joint Legislative Audit
Committee approved an audit to examine whether the CPUC
solicits competitive bids for contacts whenever possible and
uses the state's contracting process for all contracts. The
audit also seeks to examine whether or not the CPUC directs
regulated entities to expend ratepayer funds to certain
entities.
AB 1651
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This bill requires the CPUC to make the specified information
about each contract that the CPUC enters into available on its
Internet Web site at least once a year. This bill also
requires the CPUC to post any audits conducted by DGS on the
CPUC's contracting practices.
Analysis Prepared by:
Edmond Cheung / U. & C. / (916) 319-2083 FN:
0004870