BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 693|
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UNFINISHED BUSINESS
Bill No: SB 693
Author: Hueso (D), et al.
Amended: 6/27/16
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 9-0, 4/7/15
AYES: Hueso, Cannella, Hertzberg, Hill, Lara, Leyva, McGuire,
Pavley, Wolk
NO VOTE RECORDED: Fuller, Morrell
SENATE FLOOR: 31-1, 4/13/15
AYES: Allen, Bates, Beall, Block, Cannella, De León, Galgiani,
Hall, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Lara,
Leno, Leyva, McGuire, Mendoza, Mitchell, Monning, Moorlach,
Morrell, Nguyen, Nielsen, Pan, Roth, Stone, Vidak, Wieckowski,
Wolk
NOES: Anderson
NO VOTE RECORDED: Berryhill, Fuller, Gaines, Hertzberg, Liu,
Pavley, Runner
SENATE LABOR AND IND. REL. COMMITTEE: 4-1, 8/23/16 (Pursuant
to Senate Rule 29.10)
AYES: Mendoza, Jackson, Leno, Mitchell
NOES: Stone
ASSEMBLY FLOOR: 64-14, 8/18/16 - See last page for vote
SUBJECT: Public contracts: skilled and trained workforce
SOURCE: State Building and Construction Trades Council
DIGEST: This bill consolidates the "skilled and trained
workforce" requirements of various provisions of existing law
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related to alternative construction delivery methods, defines
the terms of these requirements, and makes other conforming
changes.
Assembly Amendments gutted and amended this bill's original
subject matter dealing with the State Energy Resources
Conservation and Development Commission and conflicts of
interest, and replace it with the issue of public contracts and
the utilization of a skilled and trained workforce.
ANALYSIS:
Existing law:
1)Lays out the following definitions regarding "alternative
construction delivery methods" and related bidding for public
contracts in school districts:
a) "Best value" is a procurement process where the lowest
responsible bidder may be selected on the basis of
objective criteria and may include, but need not be limited
to, price, features, functions, life-cycle costs, and among
others.
b) "Design-build" means a procurement process in which both
the design and construction of a project are performed by a
single entity.
c) "Design-build entity" means a corporation, limited
partnership, partnership, or other association that is able
to provide appropriately-licensed contracting,
architectural, and engineering services as needed pursuant
to a design-build contract. (Education Code §17250.15)
2)Defines a skilled and trained workforce as workers who are
either registered apprentices or skilled journeypersons. Such
journeypersons are graduates of programs in which they have
received applicable training and education approved by the
Chief of the Division of Apprenticeship Standards (DAS) of the
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Department of Industrial Relations (DIR), or approved for
federal purposes under federal apprenticeship regulations
(Health and Safety Code §25536.7, Public Contract Code
§20119.1 and §20155.2, among others).
3)Specifies that a design-build entity shall not be prequalified
or shortlisted for such public contracts unless it provides an
enforceable commitment to the school district that the entity
will use a skilled and trained workforce to perform all work
on the project or contract that falls within an apprenticeable
occupation (as defined) in the building and construction
trades. Existing law lays down additional related definitions
and requirements, including the use of binding project labor
agreements (PLAs) as evidence of an entity's commitment to
utilizing a skilled and trained workforce (Education Code
§17250.25).
4)States that the governing board of a school district shall not
enter into a "lease/leaseback" agreement, as defined, with any
entity unless the governing board is provided with an
enforceable commitment that the entity will use a skilled and
trained workforce to perform all work on the project or
contract that falls within an apprenticeable occupation in the
building and construction trades. Existing law lays down
additional related definitions and requirements, including the
use of binding PLAs as evidence of an entity's commitment to
utilizing a skilled and trained workforce (Education Code
§17407.5)
5)Stipulates that when the governing board of a school district
awards "best value" contracts, a contractor's commitment to a
skilled and trained workforce can be established by providing
the governing board with monthly evidence of compliance, or by
being party to a PLA, entered into by the governing board,
that binds all of its contractors to the use of a skilled and
trained workforce (Public Contract Code §20119.3).
6)Specifies that a design-build entity shall not be prequalified
or shortlisted under the procurement process for public
contracts unless it provides an enforceable commitment to the
Director of the Department of General Services or the
Secretary of the Department of Corrections and Rehabilitation
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that the entity and will use a skilled and trained workforce
to perform all work on the project or contract that falls
within an apprenticeable occupation in the building and
construction trades. Existing law lays down additional related
definitions and requirements, including the use of binding
PLAs as evidence of an entity's commitment to utilizing a
skilled and trained workforce (Public Contract Code §10191).
7)Allows local agencies under specified conditions to procure
design-build contracts for certain public works projects, but
prohibits contractor prequalification or shortlisting unless
the entity and its subcontractors provide the local agency
with an enforceable commitment to use a skilled and trained
workforce to perform all work on the project or contract that
falls within an apprenticeable occupation in the building and
construction trades. Existing law lays down additional related
definitions and requirements, including the use of binding
PLAs as evidence of an entity's commitment to utilizing a
skilled and trained workforce (Public Contract Code §22164).
8)Authorizes a pilot program in the Los Angeles Unified School
District to utilize best value procurement methods for certain
public projects but forbids contractor prequalification or
shortlisting unless the entity provides the governing board of
the school district with and enforceable commitment to use a
skilled and trained workforce (Public Contract Code
§20119-20119.7).
9)Authorizes a pilot program allowing the counties of Alameda,
Los Angeles, Riverside, San Bernardino, San Diego, Solano, and
Yuba District to utilize best value procurement methods for
certain public projects but forbids contractor
prequalification or shortlisting unless the entity provides
the governing board of the school district with and
enforceable commitment to use a skilled and trained workforce
(Public Contract Code §20155-20155.9).
This bill:
1)Authorizes a public entity to require a bidder, contractor or
other entity to use a skilled and trained workforce to
complete a contract or project regardless of whether the
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public entity is required to do so by a statute or regulation.
2)Deletes various provisions of existing law in order to
establish a new comprehensive section of the Public Contract
Code applicable whenever a public entity is required by
statute or regulation to obtain an enforceable commitment that
a bidder, contractor, or other entity will use a skilled and
trained workforce to complete a contract or project, with the
following provisions:
a) Defines a "skilled and trained workforce" as a workforce
that meets all of the following conditions:
i) All the workers performing work in an apprenticeable
occupation in the building and construction trades are
either skilled journeypersons or apprentices registered
in a state-approved apprenticeship program.
ii) For work performed on or after January 1, 2017, at
least 30% of the skilled journeypersons are graduates of
an apprenticeship program, as specified.
iii) For work performed on or after January 1, 2018, at
least 40% of the skilled journeypersons are graduates of
an apprenticeship program, as specified.
iv) For work performed on or after January 1, 2019, at
least 50% of the skilled journeypersons are graduates of
an apprenticeship program, as specified.
v) For work performed on or after January 1, 2020, at
least 60% of the skilled journeypersons are graduates of
an apprenticeship program, as specified.
b) Defines "graduate of an apprenticeship program" to mean
either of the following:
i) The individual has been issued a certificate of
completion under the authority of the California
Apprenticeship Council for completing an approved
apprenticeship program.
ii) The individual completed an apprenticeship program
located outside California and approved for federal
purposes, as specified.
c) Provides that the apprenticeship graduate requirements
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are satisfied if, in a particular calendar month, either of
the following is true:
i) At least the required percentage of skilled
journeypersons employed by the contractor or
subcontractor meet the specified graduate requirements.
ii) For the hours of work performed by skilled
journeypersons employed by the contractor or
subcontractor, the percentage of hours performed is at
least equal to the required graduate percentage.
d) Exempts a contractor or subcontractor from the
apprenticeship graduation requirements if, during the
calendar month the employed skilled journeypersons perform
fewer than 10 hours of work on the contract or project.
e) Provides that a subcontractor need not meet the
apprenticeship graduate requirements if both of the
following are true:
i) The subcontractor was not listed as a subcontractor
or a substitute for a listed subcontractor.
ii) The subcontract does not exceed one-half of 1% of
the price of the prime contract.
f) Provides that when a contractor, bidder, or other entity
is required to provide a commitment that a skilled and
trained workforce will be used, the commitment shall be
made in an enforceable agreement that provides specified
provisions, including a monthly compliance report that
shall be a public record.
g) Provides that if the entity fails to provide the monthly
report, the public agency or other awarding body shall
withhold further payment until a complete report is
provided.
h) Provides that if a monthly report does not demonstrate
compliance with these requirements, the public agency or
other awarding body shall withhold further payments until
the entity provides a plan to achieve substantial
compliance prior to completion of the contract or project.
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i) Provides that these requirements shall not apply if any
of the following is true:
i) The entity has entered into, and agrees to abide by,
a PLA that will bind all contractors and subcontractors
performing work on the project or contract to use a
skilled and trained workforce.
ii) The project or contract is being performed under the
extension or renewal of a PLA that was entered into prior
to January 1, 2017.
iii) The entity has entered into a project labor
agreement that will bind the entity and all its
subcontractors at every tier to use a skilled and trained
workforce.
3)Amends provisions of existing law related to construction and
related work performed by contract at specified stationary
sources (petroleum refineries and petrochemical manufacturing
facilities) to do the following:
a) Specify that those provisions do not preclude the use of
an alternative workweek schedule adopted pursuant to
existing law.
b) Incorporate the same definition of "graduate of an
apprenticeship program" described above.
c) Make other technical changes.
4)Provides that the amendments made by this bill shall not apply
to contracts that were advertised for bid or awarded before
January 1, 2017.
5)Provides that for contracts advertised for bid or awarded
before January 1, 2017, for which an entity or contractor
provided an enforceable commitment regarding the use of a
skilled and trained workforce, the entity may grant a request
by the entity or contractor to instead comply with the
requirements of this bill.
6)Makes related legislative findings and declarations.
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FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, this bill
would result in administrative costs to the Division of
Apprenticeship Standards (DAS) of approximately $123,000 in the
first year and $116,000 ongoing (special funds), to respond to
skilled workforce requirement inquires.
SUPPORT: (Verified8/23/16)
State Building and Construction Trades Council (source)
Air Conditioning Sheet Metal Association
Air-Conditioning & Refrigeration Contractors Association
California Chapters of National Electrical Contractors
Association
California Labor Federation
California Legislative Conference of the Plumbing, Heating, and
Piping Industry
California State Association of Electrical Workers
California State Pipe Trades Council
California's Coalition for Adequate School Housing
Finishing Contractors Association of Southern California
International Union of Elevator Constructors
Northern California Allied Trades
United Contractors
Wall and Ceiling Alliance
Western States Council of Sheet Metal Workers
OPPOSITION: (Verified8/23/16)
Pro-Craft Construction, Inc.
Western Electrical Contractors Association
The State Building and Construction Trades Council, contend that
SB 693 will unify state statutes regarding a "skilled and
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trained workforce" for public construction contracts using
certain alternative delivery methods. They believe that this
bill will consolidate the statutes, ease compliance and
implementation issues, such as establishing streamlined
reporting requirements and clarifications to enforcement
provisions. They argue that consolidation of the statutes will
provide uniformity and will ensure the statute can be
appropriately amended in the future should there be any changes
needed. Additionally, the Coalition for Adequate School Housing
states that SB 693 will clarify the relationship between project
labor agreements and the skilled workforce requirements for
design-build, best-value, and lease-leaseback school facility
projects. The bill also makes these provisions consistent for
all three of the project methods. They also argue that these
changes will assist school districts with clarification to
implement these school construction methods
appropriately.ARGUMENTS IN OPPOSITION: Opponents
contend that provisions of the bill related to project labor
agreements create loopholes for evading the skilled and trained
workforce requirements of prior legislation. They contend that
if the use of a skilled and trained workforce is truly a value
to contracting, then it should apply to all construction of a
particular type and not exempt certain projects simply because
of the existence of a project labor agreement. According to
opponents, if a PLA was entered into within the last year or
two, it should have included the skilled and trained workforce
requirement, but that this is not so under SB 693. Furthermore,
they assert that if older PLAs are in place prior to 2014, any
extension or renewal of these PLAs should include the skilled
and trained workforce requirement. Opponents believe that if the
use of a skilled and trained workforce is truly a value to
contracting then it should apply to all construction of a
particular type, not only to some projects but not others,
simply because of the existence of a PLA.
ASSEMBLY FLOOR: 64-14, 8/18/16
AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bloom,
Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,
Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman,
Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Holden, Irwin,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
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Maienschein, McCarty, Medina, Mullin, Nazarian, O'Donnell,
Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Waldron, Weber, Wilk,
Williams, Wood, Rendon
NOES: Travis Allen, Bigelow, Brough, Chávez, Dahle, Beth
Gaines, Grove, Harper, Jones, Mathis, Melendez, Obernolte,
Patterson, Wagner
NO VOTE RECORDED: Roger Hernández, Mayes
Prepared by:Brandon Seto / L. & I.R. / (916) 651-1556
8/23/16 19:54:38
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