Amended in Senate April 6, 2015

Senate BillNo. 376


Introduced by Senator Lara

February 24, 2015


begin deleteAn act to amend Section 10290.1 of the Public Contract Code, relating to public contracts. end deletebegin insertAn act to amend Section 10507.7 of, and to add Section 10507.6 to, the Public Contract Code, relating to public contracts.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 376, as amended, Lara. begin deleteContracting by state agencies. end deletebegin insertPublic contracts: University of California.end insert

begin insert

Existing provisions of the California Constitution provide that the University of California constitutes a public trust and require the university to be administered by the Regents of the University of California (regents), a corporation in the form of a board, with full powers of organization and government, subject to legislative control only for specified purposes, including such competitive bidding procedures as may be applicable to the university by statute for the letting of construction contracts, sales of real property, and purchasing of materials, goods, and services. Existing law requires the regents, except as provided, to let all contracts involving an expenditure of more than $100,000 annually for goods and materials or services, excepting personal or professional services, to the lowest responsible bidder meeting certain specifications, or to reject all bids. Existing law, until January 1, 2018, also authorizes the bid evaluation and selection for these contracts to be determined by the best value.

end insert
begin insert

This bill would require a bidder, to qualify as a lowest responsible bidder or best value awardee, to certify in writing to the University of California (UC) that the bid includes a total employee compensation package that is valued on a per-employee basis at a level sufficient that it does not materially undercut the average per-employee value of total compensation for UC employees who perform comparable work at the relevant campus, medical center, or laboratory at which the bidder proposes to perform the work. The bill would require the UC to include in its request for proposals a calculation of the average per-employee value of total compensation for UC employees who perform comparable work at the relevant location, as prescribed. The bill, with respect to contracts for services, would remove personal services from the lowest responsible bidder requirement exemption and would require contracts for services involving an expenditure exceeding $100,000 annually to include any renewals or extensions of the contract that will also result in an expenditure exceeding $100,000 annually.

end insert
begin delete

Existing law authorizes state agencies, in exercising their delegation of contracting authority from the Department of General Services, to contract for specified items or services with suppliers who have multiple award schedules with the General Services Administration of the United States, as provided.

end delete
begin delete

This bill would make nonsubstantive changes to that provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert
begin insert

The Legislature finds and declares the following:

end insert
begin insert

2(a) It is a matter of statewide concern that responsible
3competitive bidding at the University of California not undercut
4the wages and benefits provided by the University of California
5for comparable work, given that a significant percentage of
6University of California employees already are eligible for public
7benefits and any material decrease in the compensation of
8employees performing such work would result in materially
9increased General Fund costs for the provision of benefits.

end insert
begin insert

10(b) It is a matter of statewide concern that the University of
11California not repeat past instances in which public resources
12have been squandered via contracting out to for-profit private
13contractors that charge significant administrative overhead.

end insert
14begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 10507.6 is added to the end insertbegin insertPublic Contract Codeend insertbegin insert,
15to read:end insert

begin insert
P3    1

begin insert10507.6.end insert  

For the purposes of this article, to qualify as a lowest
2responsible bidder or best value awardee, a bidder shall certify
3the following in writing to the University of California:

4(a) That the bid includes a total employee compensation
5package, including fringe benefits, that is valued on a per-employee
6basis at a level sufficient that it does not materially undercut the
7average per-employee value of total compensation, including fringe
8benefits, for employees of the University of California who perform
9comparable work at the relevant campus, medical center, or
10laboratory at which the bidder proposes to perform the work.

11(b) The University of California shall implement this paragraph
12by including in its request for proposals a calculation of the
13average per-employee value of total compensation, including fringe
14benefits, for employees of the University of California who perform
15comparable work at the relevant campus, medical center, or
16laboratory, and that calculation shall use all known cost escalators
17to project the future rate of growth of average per-employee total
18compensation costs.

end insert
19begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 10507.7 of the end insertbegin insertPublic Contract Codeend insertbegin insert is
20amended to read:end insert

21

10507.7.  

begin insert (a)end insertbegin insertend insert Except as provided for in this article, the Regents
22of the University of California shall let all contracts involving an
23expenditure of more than one hundred thousand dollars ($100,000)
24annually for goods and materials to be sold to the University of
25California to the lowest responsible bidder meeting specifications,
26or else reject all bids. Contracts for services to be performed, other
27thanbegin delete personal orend delete professional services, involving an expenditure
28of one hundred thousand dollars ($100,000) or more annually shall
29be made or entered into with the lowest responsible bidder meeting
30specifications, or else all bids shall be rejected. If the regents deem
31it to be for the best interest of the university, thebegin delete regents may,end delete
32begin insert regents,end insert on the refusal or failure of the successful bidder for
33materials, goods, or services to execute a tendered contract,begin insert mayend insert
34 award it to the second lowest responsible bidder meeting
35specifications. If the second lowest responsible bidder fails or
36refuses to execute the contract, the regents may likewise award it
37to the third lowest responsible bidder meeting specifications.

begin insert

38(b) For the purposes of this section, contracts for services
39involving an expenditure of one hundred thousand dollars
40($100,000) or more annually shall include any renewal or
P4    1extension of an existing contract, if the renewal or extension
2involves an expenditure of one hundred thousand dollars
3($100,000) or more annually.

end insert
begin delete
4

SECTION 1.  

Section 10290.1 of the Public Contract Code is
5amended to read:

6

10290.1.  

(a) Notwithstanding any other provision of law, in
7exercising its delegation of contracting authority from the
8department, a state agency may contract for goods, information
9technology, or services with suppliers who have multiple award
10schedules with the General Services Administration of the United
11States if the supplier is willing to extend those terms, conditions,
12and prices. The department may also develop multiple award
13schedules or agreements for use by state agencies in the same
14manner.

15(b) The department shall determine the delegation contracting
16authority for agencies wishing to contract with suppliers who have
17multiple award schedules. The department shall seek input from
18both customer departments and agencies and private sector
19suppliers.

end delete


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