Senate BillNo. 959


Introduced by Senator Lara

February 8, 2016


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

LEGISLATIVE COUNSEL’S DIGEST

SB 959, as introduced, Lara. University of California: contracts: bidding.

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 $100,000 or more 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, beginning January 1, 2018, require a bidder, to qualify as a lowest responsible bidder or best value awardee on contracts for specified services, among other requirements, 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 also require the bidder to notify the UC of any changes in the submitted bid information during the performance of the contract and to submit an annual certified audit statement for the work performed under the contract. 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 would, for these purposes, require contracts for services involving an expenditure of $100,000 or more annually to include any renewals or extensions of the contract that would result in an expenditure of $100,000 or more annually.

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

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

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

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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 become more
4transparent than it is at present, in order that illegal and abusive
5employment practices by contractors can be prevented and, if not
6prevented, then brought to light and eliminated, with all victims
7of wage theft made whole for their employers’ violations.

8(b) It is a matter of statewide concern that responsible
9competitive bidding at the University of California not undercut
10the wages and benefits provided by the University of California
11for comparable work, given that a significant percentage of
12 University of California employees already are eligible for public
13benefits and any material decrease in the compensation of
14employees performing such work would result in materially
15increased General Fund costs for the provision of benefits.

16(c) It is a matter of statewide concern that the University of
17California not repeat past instances in which public resources have
18been squandered via contracting out to for-profit private contractors
19that charge significant administrative overhead.

P3    1(d) In amending the Public Contracts Code to promote
2responsible contracting at the University of California, it is
3important to delay the amendments’ effective date until January
41, 2018, in order to afford adequate preparatory time to the
5university and to contractors intending to bid on university
6contracts, as well as to lessen the cost of the amendments’
7requirements by delaying their effect until after the university’s
8$15 per hour minimum wage for contracted employees is fully in
9effect.

10

SEC. 2.  

Section 10507.6 is added to the Public Contract Code,
11to read:

12

10507.6.  

(a) For the purposes of this article, to qualify as a
13lowest responsible bidder or best value awardee on any contract
14for building maintenance, cleaning or custodial services, call center
15services, dining and food services, gardening, grounds keeping
16and plant nursery services, laborer services, mail room services,
17parking, shuttle bus, or transportation services, security services,
18storekeeper services, truck driving services, patient care technical
19employee services, patient billing services, medical transcribing
20services, patient escort services, or nursing assistant services a
21bidder shall satisfy the requirements set forth in this section.

22(b) (1) A bidder shall certify in writing to the University of
23California that the bid includes a total employee compensation
24package, including fringe benefits, that is valued on a per-employee
25basis at a level sufficient that it does not undercut by more than 5
26percent the average per-employee value of total compensation,
27including fringe benefits, for employees of the University of
28California who perform comparable work at the relevant campus,
29medical center, or laboratory at which the bidder proposes to
30perform the work.

31(2) The University of California shall implement this section
32by including in its request for proposals a calculation of the average
33per-employee value of total compensation, including fringe
34benefits, for employees of the University of California who perform
35comparable work at the relevant campus, medical center, or
36laboratory, and that calculation shall use all known cost escalators
37to project the future rate of growth of average per-employee total
38compensation costs.

39(c) A bidder shall certify in writing to the University of
40California that, within the prior 10 years, the bidder has not been
P4    1found liable for any violation of Section 484 of the Penal Code,
2Sections 200 through 558, inclusive, 1197.5, or 2810.5 of the Labor
3Code, or any Wage Order issued by the Industrial Welfare
4Commission, in any amount totaling more than twenty thousand
5dollars ($20,000) or 0.3 percent of the bidder’s most recent annual
6gross revenue, whichever is less.

7(d) A bidder shall provide all of the following to the University
8of California, at the same time that it submits its bid:

9(1) A spreadsheet showing, for each position and employee to
10be supplied to the university or to perform work at any university
11location, all applicable compensation and benefits to be offered,
12including, but not limited to, base wage rates or salaries, leave
13accrual rates, shift differentials, premium rates, bonus structures,
14rates or systems, retirement contributions and programs, and
15medical benefit programs and plans, including, but not limited to,
16applicable deductibles, employee copayments, and employer and
17employee shares of premiums for each tier and level of coverage
18offered.

19(2) A spreadsheet showing, for each position and employee to
20be supplied to the university or to perform work at any university
21location, the anticipated hours to be worked on a daily and weekly
22basis.

23(3) An organizational chart showing the bidder’s supervisory
24structure for the work to be performed.

25(4) Any and all employee handbooks or other policies to be
26applicable to employees performing contracted work for the
27University of California.

28(5) A projection showing, for all work performed for the
29university, the bidder’s projected total and itemized gross revenues,
30and total and itemized expenses and net revenues for each of the
31first three years of the proposed contract.

32(e) A successful bidder shall, after it commences performing
33work for the University of California, do all of the following:

34(1) Notify the university of any changes to the information
35provided in subdivisions (b), (c), and (d). That notification shall
36be provided within 30 days of the change and shall fully specify
37all information that has changed and the reasons for that change.
38It shall constitute proper grounds for the university to terminate a
39contract should a contractor notify the university that, within the
40prior 10 years, the bidder has been found liable for any violation
P5    1of Section 484 of the Penal Code, Sections 200 through 558, 1197.5
2or 2810.5 of the Labor Code, or any Wage Order issued by the
3Industrial Welfare Commission, in any amount totaling more than
4twenty thousand dollars ($20,000) or 0.3 percent of the bidder’s
5most recent annual gross revenue, whichever is less.

6(2) Provide the university with a copy of all notices provided
7to employees pursuant to Section 2810.5 of the Labor Code before
8those employees begin working at a University of California
9campus, laboratory, or medical center.

10(3) By no later than the 15th day of each month, provide the
11university with a monthly certified payroll report covering all
12employees who performed work at any university location during
13the preceding month.

14(4) Annually provide the university, by no later than October 1
15of each year, with data showing compliance with Section 1197.5
16of the Labor Code during the preceding fiscal year, for each job
17classification performing work at any university location.

18(5) Annually provide the university, by no later than October 1
19of each year, an audited statement prepared and signed by a
20certified public accountant showing, for all work performed for
21the university during the preceding fiscal year, the bidder’s total
22and itemized gross revenues, and total and itemized expenses and
23net revenues.

24(f) All records provided by a bidder or contractor to the
25university pursuant to this section shall be disclosed to any member
26of the public making a request to the university under Section 6253
27of the Government Code, provided that (1) the university shall
28redact those portions of such records containing confidential
29information within the meaning of subdivision (c) of Section 6254
30of the Government Code, and (2) the university, in responding to
31any request made during the course of a bid process that is not yet
32complete, shall delay until after the bid process is complete before
33disclosing any records containing materials submitted by a bidder.

34(g) The requirements of this section shall not apply to employees
35covered by Section 1191.5 of the Labor Code or subdivision (c)
36of Section 214 of Title 29 of the United States Code. Any
37employees covered by Section 1191.5 of the Labor Code or
38subdivision (c) of Section 214 of Title 29 of the United States Code
39shall be omitted from any and all certifications and disclosures
40required by this article.

P6    1(h) This section does not apply to any work subject to Chapter
21 (commencing with Section 1720) of Part 7 of Division 2 of the
3Labor Code.

4(i) This section shall become operative January 1, 2018.

5

SEC. 3.  

Section 10507.7 of the Public Contract Code is
6amended to read:

7

10507.7.  

begin insert(a)end insertbegin insertend insert Except as provided for in this article, the Regents
8of the University of California shall let all contracts involving an
9expenditure of more than one hundred thousand dollars ($100,000)
10annually for goods and materials to be sold to the University of
11California to the lowest responsible bidder meeting specifications,
12or else reject all bids. Contracts for services to be performed, other
13than personal or professional services, involving an expenditure
14of one hundred thousand dollars ($100,000) or more annually shall
15be made or entered into with the lowest responsible bidder meeting
16specifications, or else all bids shall be rejected. If the regents deem
17it to be for the best interest of the university, the regents may, on
18the refusal or failure of the successful bidder for materials, goods,
19or services to execute a tendered contract, award it to the second
20lowest responsible bidder meeting specifications. If the second
21lowest responsible bidder fails or refuses to execute the contract,
22the regents may likewise award it to the third lowest responsible
23bidder meeting specifications.

begin insert

24(b) This section shall remain in effect only until January 1, 2018,
25and as of that date is repealed, unless a later enacted statute, that
26is enacted before, deletes or extends that date.

end insert
27

SEC. 4.  

Section 10507.7 is added to the Public Contract Code,
28to read:

29

10507.7.  

(a) Except as provided for in this article, the Regents
30of the University of California shall let all contracts involving an
31expenditure of more than one hundred thousand dollars ($100,000)
32annually for goods and materials to be sold to the University of
33California to the lowest responsible bidder meeting specifications,
34or else reject all bids. Contracts for services to be performed, other
35than personal or professional services, involving an expenditure
36of one hundred thousand dollars ($100,000) or more annually shall
37be made or entered into with the lowest responsible bidder meeting
38specifications, or else all bids shall be rejected. If the regents deem
39it to be for the best interest of the university, the regents may, on
40the refusal or failure of the successful bidder for materials, goods,
P7    1or services to execute a tendered contract, award it to the second
2lowest responsible bidder meeting specifications. If the second
3lowest responsible bidder fails or refuses to execute the contract,
4the regents may likewise award it to the third lowest responsible
5bidder meeting specifications.

6(b) For the purposes of this section, contracts for services
7involving an expenditure of one hundred thousand dollars
8($100,000) or more annually shall include any renewal or extension
9of an existing contract if the renewal or extension involves an
10expenditure of one hundred thousand dollars ($100,000) or more
11annually.

12(c) This section shall become operative on January 1, 2018.



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