Amended in Senate May 31, 2016

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 amended, 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 billbegin insert,end insertbegin delete would,end delete beginning January 1, 2018,begin insert wouldend insert 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 tobegin insert provide any applicable collective bargaining agreements and toend insert notify the UC of any changes in the submitted bid information during the performance of thebegin delete contract and to submit an annual certified audit statement for the work performed under theend delete 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:

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 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.

P3    1(c) It is a matter of statewide concern that the University of
2California not repeat past instances in which public resources have
3been squandered via contracting out to for-profit private contractors
4that charge significant administrative overhead.

5(d) In amending the Public Contract Code to promote
6responsible contracting at the University of California, it is
7important to delay the amendments’ effective date until January
81, 2018, in order to afford adequate preparatory time to the
9university and to contractors intending to bid on university
10contracts, as well as to lessen the cost of the amendments’
11requirements by delaying their effect until after the university’s
12$15 per hour minimum wage for contracted employees is fully in
13effect.

14

SEC. 2.  

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

16

10507.6.  

(a) For the purposes of this article, to qualify as a
17lowest responsible bidder or best value awardee on any contract
18for building maintenance, cleaning or custodial services, call center
19services, dining and food services, gardening, grounds keeping
20and plant nursery services, laborer services, mail room services,
21parking, shuttle bus, or transportation services, security services,
22storekeeper services, truck driving services, patient care technical
23employee services, patient billing services, medical transcribing
24services, patient escort services, or nursing assistant services a
25bidder shall satisfy the requirements set forth in this section.

26(b) (1) A bidder shall certify in writing to the University of
27California that the bid includes a total employee compensation
28package, including fringe benefits, that is valued on a per-employee
29basis at a level sufficient that it does not undercut by more than 5
30percent the average per-employee value of total compensation,
31including fringe benefits, for employees of the University of
32California who perform comparable work at the relevant campus,
33medical center, or laboratory at which the bidder proposes to
34perform the work.

35(2) The University of California shall implement this section
36by including in its request for proposals a calculation of the average
37per-employee value of total compensation, including fringe
38benefits, for employees of the University of California who perform
39comparable work at the relevant campus, medical center, or
40laboratory, and that calculation shall use all known cost escalators
P4    1to project the future rate of growth of average per-employee total
2compensation costs.

3(c) A bidder shall certify in writing to the University of
4California that, within the priorbegin delete 10end deletebegin insert fiveend insert years, the bidder has not
5been found liable for any violation of Section 484 of the Penal
6Code, Sections 200 through 558, inclusive, 1197.5, or 2810.5 of
7the Labor Code, or any wage order issued by the Industrial Welfare
8Commission, in any amount totaling more than twenty thousand
9dollars ($20,000) or 0.3 percent of the bidder’s most recent annual
10gross revenue, whichever is less.

11(d) A bidder shall provide all of the following to the University
12of California, at the same time that it submits its bid:

13(1) A spreadsheet showing, for each position and employee to
14be supplied to the university or to perform work at any university
15location, all applicable compensation and benefits to be offered,
16including, but not limited to, base wage rates or salaries, leave
17accrual rates, shift differentials, premium rates, bonus structures,
18rates or systems, retirement contributions and programs, and
19medical benefit programs and plans, including, but not limited to,
20applicable deductibles, employee copayments, and employer and
21employee shares of premiums for each tier and level of coverage
22offered.

begin delete

23(2) A spreadsheet showing, for each position and employee to
24be supplied to the university or to perform work at any university
25location, the anticipated hours to be worked on a daily and weekly
26basis.

end delete
begin delete

23 27(3)

end delete

28begin insert(2)end insert An organizational chart showing the bidder’s supervisory
29structure for the work to be performed.

begin delete

25 30(4)

end delete

31begin insert(3)end insert Anybegin insert collective bargaining agreements, where applicable,end insert
32 and all employee handbooks or other policies to be applicable to
33employees performing contracted work for the University of
34California.

begin delete

35(5) A projection showing, for all work performed for the
36university, the bidder’s projected total and itemized gross revenues,
37and total and itemized expenses and net revenues for each of the
38first three years of the proposed contract.

end delete

39(e) A successful bidder shall, after it commences performing
40work for the University of California, dobegin delete all ofend delete the following:

P5    1(1) Notify the university of any changes to the information
2provided in subdivisions (b), (c), and (d). That notification shall
3be provided within 30 days of the change and shall fully specify
4all information that has changed and the reasons for that change. begin delete5 It shall constitute proper grounds for the university to terminate a
6contract should a contractor notify the university that, within the
7prior 10 years, the bidder has been found liable for any violation
8of Section 484 of the Penal Code, Sections 200 through 558, 1197.5
9or 2810.5 of the Labor Code, or any Wage Order issued by the
10Industrial Welfare Commission, in any amount totaling more than
11twenty thousand dollars ($20,000) or 0.3 percent of the bidder’s
12most recent annual gross revenue, whichever is less.end delete

13(2) Provide the university with a copy of all notices provided
14to employees pursuant to Section 2810.5 of the Labor Code before
15those employees begin working at a University of California
16campus, laboratory, or medical center.

begin delete

17(3) By no later than the 15th day of each month, provide the
18university with a monthly certified payroll report covering all
19employees who performed work at any university location during
20the preceding month.

21(4) Annually provide the university, by no later than October 1
22of each year, with data showing compliance with Section 1197.5
23of the Labor Code during the preceding fiscal year, for each job
24classification performing work at any university location.

25(5) Annually provide the university, by no later than October 1
26of each year, an audited statement prepared and signed by a
27certified public accountant showing, for all work performed for
28the university during the preceding fiscal year, the bidder’s total
29and itemized gross revenues, and total and itemized expenses and
30net revenues.

end delete

31(f) All records provided by a bidder or contractor to the
32university pursuant to this section shall be disclosed to any member
33of the public making a request to the university under Section 6253
34of the Government Code, provided that (1) the university shall
35redact those portions of such records containing confidential
36information within the meaning of subdivision (c) of Section 6254
37of the Government Code, and (2) the university, in responding to
38any request made during the course of a bid process that is not yet
39complete, shall delay until after the bid process is complete before
40disclosing any records containing materials submitted by a bidder.

P6    1(g) The requirements of this section shall not apply to employees
2covered by Section 1191.5 of the Labor Code or subdivision (c)
3of Section 214 of Title 29 of the United States Code. Any
4employees covered by Section 1191.5 of the Labor Code or
5subdivision (c) of Section 214 of Title 29 of the United States Code
6shall be omitted from any and all certifications and disclosures
7required by this article.

8(h) This section does not apply to any work subject to Chapter
91 (commencing with Section 1720) of Part 7 of Division 2 of the
10Labor Code.

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

12

SEC. 3.  

Section 10507.7 of the Public Contract Code is
13amended to read:

14

10507.7.  

(a) Except as provided for in this article, the Regents
15of the University of California shall let all contracts involving an
16expenditure of more than one hundred thousand dollars ($100,000)
17annually for goods and materials to be sold to the University of
18California to the lowest responsible bidder meeting specifications,
19or else reject all bids. Contracts for services to be performed, other
20than personal or professional services, involving an expenditure
21of one hundred thousand dollars ($100,000) or more annually shall
22be made or entered into with the lowest responsible bidder meeting
23specifications, or else all bids shall be rejected. If the regents deem
24it to be for the best interest of the university, the regents may, on
25the refusal or failure of the successful bidder for materials, goods,
26or services to execute a tendered contract, award it to the second
27lowest responsible bidder meeting specifications. If the second
28lowest responsible bidder fails or refuses to execute the contract,
29the regents may likewise award it to the third lowest responsible
30bidder meeting specifications.

31(b) This section shall remain in effect only until January 1, 2018,
32and as of that date is repealed, unless a later enacted statute, that
33is enacted before, deletes or extends that date.

34

SEC. 4.  

Section 10507.7 is added to the Public Contract Code,
35to read:

36

10507.7.  

(a) Except as provided for in this article, the Regents
37of the University of California shall let all contracts involving an
38expenditure of more than one hundred thousand dollars ($100,000)
39annually for goods and materials to be sold to the University of
40California to the lowest responsible bidder meeting specifications,
P7    1or else reject all bids. Contracts for services to be performed, other
2than personal or professional services, involving an expenditure
3of one hundred thousand dollars ($100,000) or more annually shall
4be made or entered into with the lowest responsible bidder meeting
5specifications, or else all bids shall be rejected. If the regents deem
6it to be for the best interest of the university, the regents may, on
7the refusal or failure of the successful bidder for materials, goods,
8or services to execute a tendered contract, award it to the second
9lowest responsible bidder meeting specifications. If the second
10lowest responsible bidder fails or refuses to execute the contract,
11the regents may likewise award it to the third lowest responsible
12bidder meeting specifications.

13(b) For the purposes of this section, contracts for services
14involving an expenditure of one hundred thousand dollars
15($100,000) or more annually shall include any renewal or extension
16of an existing contract if the renewal or extension involves an
17expenditure of one hundred thousand dollars ($100,000) or more
18annually.

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



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