Amended in Assembly August 15, 2016

Amended in Senate May 31, 2016

Senate Bill No. 959

Introduced by Senator Lara

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(Coauthor: Assembly Member Gonzalez)

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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 begin delete such end delete begin insert any end insert 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 begin delete value. end delete begin insert value, as defined. end insert

This bill, beginning January 1, 2018, would 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. begin delete The bill would also require the bidder to provide any applicable collective bargaining agreements and to notify the UC of any changes in the submitted bid information during the performance of the contract. end delete 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:

SECTION 1.  

The Legislature finds and declares the following:

(a) It is a matter of statewide concern that responsible
competitive bidding at the University of California become more
transparent than it is at present, in order that illegal and abusive
employment practices by contractors can be prevented and, if not
prevented, then brought to light and eliminated, with all victims
of wage theft made whole for their employers’ violations.

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

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

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

SEC. 2.  

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

10507.6.  

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

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

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

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

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

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

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

(3) Any collective bargaining agreements, where applicable,
and all employee handbooks or other policies to be applicable to
employees performing contracted work for the University of
California.

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

(1) Notify the university of any changes to the information
provided in subdivisions (b), (c), and (d). That notification shall
be provided within 30 days of the change and shall fully specify
all information that has changed and the reasons for that change.

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

(f)

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

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(g)

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begin insert (e) end insert  The requirements of this section shall not apply to employees
covered by Section 1191.5 of the Labor Code or subdivision (c)
of Section 214 of Title 29 of the United States Code. Any
employees covered by Section 1191.5 of the Labor Code or
subdivision (c) of Section 214 of Title 29 of the United States Code
shall be omitted from any and all certifications and disclosures
required by this article.

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(h)

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begin insert (f) end insert  This section does not apply to any work subject to Chapter
1 (commencing with Section 1720) of Part 7 of Division 2 of the
Labor Code.

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(i)

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begin insert (g) end insert  This section shall become operative January 1, 2018.

SEC. 3.  

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

10507.7.  

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

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

SEC. 4.  

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

10507.7.  

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

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

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