BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2708


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          Date of Hearing: April 11, 2016 


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 2708  
          (Daly) - As Amended March 18, 2016


          SUBJECT:  Department of Transportation:  Lean 6-SIGMA program


          SUMMARY:  Directs the California Department of Transportation  
          (Caltrans) to conduct a study to assess implementation of the  
          Lean 6-SIGMA process-improvement program to determine the  
          effectiveness of streamlining the process for procuring  
          architectural and engineering (A&E) services for the department.


          EXISTING LAW:  Grants Caltrans the authority to contract for A&E  
          services and prescribes the general parameters governing the A&E  
          procurement process.


          FISCAL EFFECT:  Unknown


          COMMENTS:   Lean 6-Sigma is a data-driven process management  
          approach that originated in the private sector and is  
          increasingly being used by government agencies to pinpoint waste  
          and inefficiencies.   Last year, the Governor's Office of  
          Business and Economic Development (GO-Biz) and the Government  
          Operations Agency (Gov. Ops.) partnered together to offer a Lean  
          6-Sigma implementation program to 11 state departments,  
          including Caltrans, to address process-based issues that are  








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          causing delays in services to both internal and external  
          stakeholders.  





          To date, Caltrans has reviewed over a dozen programs and/or  
          processes using the Lean 6-Sigma methodology, including the  
          process for procuring A&E services.  Currently, it takes  
          Caltrans about 98 calendar days to process an A&E contract.   
          Furthermore, the onerous process can be burdensome on A&E firms,  
          especially smaller firms that are trying to work with Caltrans.   
          After the process was reviewed using Lean 6-Sigma, Caltrans  
          expects the process to be simplified and reduced to about 45  
          days.  The A&E process improvements are currently in the  
          implementation phase. 





          The author introduced AB 2708 to follow up on the A&E  
          procurement process review to ensure the new streamlined process  
          under Lean 6-Sigma is, in fact, streamlined and effective.   
          According to the author, "California must find a way to expedite  
          the repair of older roads and the construction of new roads.   
          The implementation of the Lean-6 SIGMA program can be vital to  
          that mission."





          California is in the midst of a transportation funding crisis,  
          so much so that the Governor last year called for a special  
          session of the Legislature to address the crisis.  Amongst the  
          myriad of proposals for a comprehensive funding package, the  
          need for concurrent reforms at Caltrans is universal.  In fact,  








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          even the Governor's proposed transportation funding package  
          includes an anticipated $100 million annually in Caltrans  
          efficiencies.  





          Although the A&E procurement process is a relatively minor piece  
          of a large, complex project delivery process, an assessment of  
          Caltrans' ability to meaningfully reform its processes, as  
          required by this bill, could foretell of its ability to tackle  
          the much bigger reforms that are due.   





          


          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file




          Opposition


          None on file









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          Analysis Prepared by:Janet Dawson / TRANS. / (916) 319-2093