Amended in Senate June 1, 2015

Amended in Senate April 6, 2015

Senate BillNo. 376


Introduced by Senator Lara

February 24, 2015


An act to amend Section 10507.7 of, and to add Section 10507.6 to, the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 376, as amended, Lara. Public contracts: University of California.

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 ofbegin delete more thanend delete $100,000begin insert or moreend insert 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.

This bill would require a bidder, to qualify as a lowest responsible bidder or best valuebegin delete awardee,end deletebegin insert awardee on contracts for specified services,end insert 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 forbegin delete services, would removeend deletebegin insert services involving an expenditure of $100,000 or more, would not exceptend insert personal services from the lowest responsible bidderbegin delete requirement exemption andend deletebegin insert requirement. The billend insert would require contracts for services involving an expenditurebegin delete exceedingend deletebegin insert ofend insert $100,000begin insert or moreend insert annually to include any renewals or extensions of the contract thatbegin delete will alsoend deletebegin insert wouldend insert result in an expenditurebegin delete exceedingend deletebegin insert ofend insert $100,000begin insert or moreend insert annually.

begin insert

This bill would exclude specified employees and public works from these provisions, as provided.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

The Legislature finds and declares the following:

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.

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

14

SEC. 2.  

Section 10507.6 is added to the Public Contract Code,
15to read:

16

10507.6.  

begin insert(a)end insertbegin insertend insertFor the purposes of this article, to qualify as a
17lowest responsible bidder or best valuebegin delete awardee,end deletebegin insert awardee on any
18contract for building maintenance, cleaning, or custodial services,
P3    1call center services, dining services, grounds keeping services,
2laborer services, mail room services, parking or transportation
3services, security services, or patient care technical employee or
4nursing assistant services,end insert
a bidder shall certifybegin delete the followingend delete in
5writing to the University of begin deleteCalifornia:end delete

6begin delete(a)end deletebegin deleteend deletebegin deleteThat end deletebegin insertCalifornia that end insertthe bid includes a total employee
7compensation package, including fringe benefits, that is valued on
8a per-employee basis at a level sufficient that it does not materially
9undercut the average per-employee value of total compensation,
10including fringe benefits, for employees of the University of
11California who perform comparable work at the relevant campus,
12medical center, or laboratory at which the bidder proposes to
13perform the work.

14(b) The University of California shall implement thisbegin delete paragraphend delete
15begin insert sectionend insert by including in its request for proposals a calculation of
16the average per-employee value of total compensation, including
17fringe benefits, for employees of the University of California who
18perform comparable work at the relevant campus, medical center,
19or laboratory, and that calculation shall use all known cost
20escalators to project the future rate of growth of average
21per-employee total compensation costs.

begin insert

22The requirements of this section shall not apply to employees
23subject to Section 1191.5 of the Labor Code or Section 214(c) of
24Title 29 of the United States Code. Any employees covered by
25Section 1191.5 of the Labor Code or Section 214(c) of Title 29 of
26the United States Code shall be omitted from all calculations and
27certifications required by this article.

end insert
begin insert

28(c) This section does not apply to any work subject to Chapter
291 (commencing with Section 1720) of Part 7 of Division 2 of the
30Labor Code.

end insert
31

SEC. 3.  

Section 10507.7 of the Public Contract Code is
32amended to read:

33

10507.7.  

(a)  Except as provided for in this article, the Regents
34of the University of California shall let all contracts involving an
35expenditure of more than one hundred thousand dollars ($100,000)
36annually for goods and materials to be sold to the University of
37California to the lowest responsible bidder meeting specifications,
38or else reject all bids. Contracts for services to be performed, other
39than professional services, involving an expenditure of one hundred
40thousand dollars ($100,000) or more annually shall be made or
P4    1entered into with the lowest responsible bidder meeting
2specifications, or else all bids shall be rejected. If the regents deem
3it to be for the best interest of the university, the regents, on the
4refusal or failure of the successful bidder for materials, goods, or
5services to execute a tendered contract, may award it to the second
6lowest responsible bidder meeting specifications. If the second
7lowest responsible bidder fails or refuses to execute the contract,
8the regents may likewise award it to the third lowest responsible
9bidder meeting specifications.

10(b) For the purposes of this section, contracts for services
11involving an expenditure of one hundred thousand dollars
12($100,000) or more annually shall include any renewal or extension
13of an existing contract, if the renewal or extension involves an
14expenditure of one hundred thousand dollars ($100,000) or more
15annually.



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