BILL ANALYSIS Ó
AB 2030
Page 1
ASSEMBLY THIRD READING
AB
2030 (Mullin)
As Amended April 26, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Local |8-0 |Eggman, Waldron, | |
|Government | |Mullin, Bonilla, | |
| | |Chiu, Cooley, Gordon, | |
| | |Linder | |
| | | | |
| | | | |
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SUMMARY: Changes specified bidding requirements for the San
Francisco Bay Area Rapid Transit District and the San Mateo
County Transit District. Specifically, this bill:
1)Increases the bid threshold, from $100,000 to $150,000, above
which the San Francisco Bay Area Rapid Transit District (BART)
and the San Mateo County Transit District (SamTrans) must
award contracts for supplies, equipment and materials to the
lowest responsible bidder or to the bidder who submits a
proposal that provides best value, as defined.
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2)Increases, from $100,000 to $150,000, the maximum procurement
amount for supplies, equipment or materials under which BART
and SamTrans must obtain at least three quotations that permit
prices and terms to be compared.
3)Increases, from $2,000 to $5,000, the minimum procurement
amount for construction and for supplies, equipment or
materials above which BART must obtain at least three
quotations that permit prices and terms to be compared.
4)Increases, from $2,000 to $5,000, the minimum procurement
amount for supplies, equipment or materials above which
SamTrans must obtain at least three quotations that permit
prices and terms to be compared.
5)Requires the $5,000 amount for SamTrans, specified in 4)
above, to be adjusted on January 1, 2018, to reflect the
percentage change since January 1, 2016, in the California
Consumer Price Index (California CPI), and further requires
that amount to be adjusted each January 1 thereafter to
reflect the annual percentage change in the California CPI.
EXISTING LAW:
1)Requires BART and SamTrans to let contracts for the purchase
of supplies, equipment, and materials to the lowest
responsible bidder or to the bidder who submits a proposal
that provides best value, as defined, if the amount of the
contract exceeds $100,000.
2)Requires BART to obtain at least three quotations that permit
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prices and terms to be compared whenever the expected
procurement required exceeds $2,500 and does not exceed
$10,000 for the construction of facilities and works or does
not exceed $100,000 for supplies, equipment, or materials.
3)Requires SamTrans to obtain at least three quotations that
permit prices and terms to be compared whenever the expected
procurement required exceeds $2,500 and does not exceed
$100,000 for supplies, equipment, or materials.
FISCAL EFFECT: None
COMMENTS:
1)Bill Summary. This bill makes several changes to the
procurement requirements for BART and SamTrans. For both BART
and SamTrans, this bill increases the formal bid threshold
from $100,000 to $150,000 above which both agencies must award
contracts for the purchase of supplies, equipment and
materials to the lowest bidder or the bidder that provides the
best value.
For BART, this bill also increases the minimum dollar amount,
from $2,500 to $5,000, above which BART must obtain three
quotes for construction of facilities and works for the
purchase of supplies, equipment or materials. It also
increases the maximum amount allowed under this relaxed
procurement method for the purchase of supplies, equipment or
materials, from $100,000 to $150,000.
For SamTrans, this bill increases the minimum dollar amount,
from $2,500 to $5,000, above which SamTrans must obtain three
quotes for the purchase of supplies, equipment or materials,
and increases the maximum amount allowed under this
procurement method from $100,000 to $150,000 (there is no
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construction component in this provision for SamTrans). The
bill also requires the $5,000 minimum for SamTrans to be
adjusted for inflation using the California CPI. This
adjustment must be made on January 1, 2018, to reflect the
change since January 1, 2016, and annually thereafter to
reflect the annual change in the California CPI.
This bill is sponsored by the author.
2)Author's Statement. According to the author, "This bill
adjusts SamTrans' and BART's procurement thresholds as
follows: a) Raises the limit under which the agencies can
purchase supplies, equipment and materials via the 'best
value' process from $100,000 to $150,000; and b) Increases the
small purchase threshold from $2,500 to $5,000, allowing the
agencies additional flexibility to meet their purchasing needs
more quickly, particularly for locally-funded purchases? AB
2030 increases (these) purchasing thresholds? to allow
relatively low-cost procurements to be processed in a more
efficient and expeditious manner while still complying with
Federal Transit Administration (FTA) requirements."
3)Background. Current law requires both BART and SamTrans to
issue contracts for the purchase of supplies, equipment, and
materials to the lowest responsible bidder or to the bidder
who submits a proposal that provides best value, as defined,
if the amount of the contract exceeds $100,000.
A less formal procurement method is allowed for smaller
contracts. For construction of facilities and works that is
expected to cost between $2,500 and $10,000, and for the
purchase of supplies, equipment or materials that is expected
to cost between $2,500 and $100,000, BART must obtain at least
three quotes that permit prices and terms to be compared.
SamTrans must follow the same rules when purchasing supplies,
equipment or materials.
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According to the author, "Effective approximately one year
ago, the federal government raised the 'Simplified Acquisition
Threshold' to allow federal grantees like BART and SamTrans to
make purchases using federal grant funds via informal
procurement methods for services, supplies, and other property
of up to $150,000, with even less stringent requirements for
'micro-purchases' of under $3,000."
The Simplified Acquisition Threshold (SAT) is set by the
federal government for its Simplified Acquisition Procedures
(SAP), which are designed to help federal agencies meet their
small business procurement targets. SAPs employ streamlined
contracting procedures for contracts valued between $2,500 and
$150,000, such as allowing quotations (including oral
quotations) instead of requiring full-blown bids, requiring
less stringent reporting, and setting simpler rules for
subcontracting. Federal acquisition thresholds are adjusted
every five years and published in the Federal Register. The
latest adjustment in 2015 raised the micro-purchase threshold
to $3,500. The SAT ceiling remained the same at $150,000.
4)Policy Considerations. The Legislature may wish to consider
the following:
a) Conformity to Federal Limits. The author has pointed to
the SAT as justification for changing the procurement
limits in this bill. The minimum SAT for "micro purchases"
is $3,500. This bill adjusts a similar minimum for BART
and SamTrans to $5,000. The Legislature may wish to
consider whether the stated intent of this bill - to
conform to the federal SAT - has been accomplished with the
bill's proposed increase to $5,000.
b) Legislative Oversight. This bill requires an automatic
adjustment for inflation of the increased $5,000 minimum
dollar amount above which SamTrans must obtain at least
three quotes when contracting for supplies, equipment or
materials. This would effectively eliminate legislative
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oversight of this authority. The Legislature may wish to
consider whether the Legislature should relinquish this
oversight function.
5)Arguments in Support. None on file.
6)Arguments in Opposition. None on file.
Analysis Prepared by:
Angela Mapp / L. GOV. / (916) 319-3958 FN:
0002896