BILL ANALYSIS Ó
AB 2358
Page 1
ASSEMBLY THIRD READING
AB
2358 (Bigelow and Wood)
As Amended May 27, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Accountability |9-0 |Cristina Garcia, | |
| | |Lackey, Brough, | |
| | |Burke, Frazier, | |
| | | | |
| | | | |
| | |Beth Gaines, Irwin, | |
| | |Medina, Rodriguez | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood | |
| | | | |
AB 2358
Page 2
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SUMMARY: Increases the maximum amount for which a state agency
can directly contract with a certified small business (SB) or a
disabled veteran business enterprise (DVBE) from $250,000 to
$300,000.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, the less competitive nature of the streamlined
bidding process on contracts between $250,000 to $300,000 could
result in higher contract costs of up to several hundred
thousand dollars annually. Partially offsetting the above costs
would be reduced administrative costs associated with
streamlined bidding, advertising, and contract awarding
procedures.
COMMENTS: Under current law, certain state contracts with SBs
and DVBEs for goods, services, or information technology can
bypass formal competitive bidding requirements. Specifically,
state agencies are allowed to contract directly with a SB or
DVBE after obtaining price quotes from at least two firms before
awarding the contract. Contracts offered under this streamlined
SB/DVBE option are currently limited to between $5,000 and
$250,000 in value. This bill increases the maximum amount to
$300,000.
According to the author, "Adequate access to contract
opportunities for both small businesses and DVBEs is a continual
problem. This bill will allow small and veteran-owned
businesses to have more access to state agency contracts by
increasing the direct contracting limit from $250,000 to
$300,000."
AB 2358
Page 3
The Department of General Services' most recent consolidated
annual report notes that 22,674 contracts were awarded using the
SB/DVBE option for fiscal year 2014-15. It is unclear whether
or not increasing the maximum contract value under the option to
$300,000 will increase the number of participating SB or DVBE
firms. Hypothetically, state agencies could, if they wish, pick
specific firms with whom they have done business before and
invite them to make offers since formal bidding requirements do
not apply.
Analysis Prepared by:
Cassie Royce / A. & A.R. / (916) 319-3600 FN:
0003173