BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: SB 1214
-----------------------------------------------------------------
|Author: |Allen |
|-----------+-----------------------------------------------------|
|Version: |March 31, 2016 Hearing |
| |Date: April 13, 2016 |
-----------------------------------------------------------------
-----------------------------------------------------------------
|Urgency: |No |Fiscal: |Yes |
-----------------------------------------------------------------
-----------------------------------------------------------------
|Consultant:|Kathleen Chavira |
| | |
-----------------------------------------------------------------
Subject: University of California: Best Value Construction
Contracting Program
SUMMARY
This bill eliminates the sunset on the authority of the
University of California (UC) to use the best value procurement
method at all its campuses and medical centers and permanently
extends the authority of the UC to use this procurement method
at all its locations.
BACKGROUND
Existing law, until January 1, 2017, authorizes a pilot program
at the UC to award construction contracts on a "best value"
basis, rather than just to the lowest bid.
(Public Contract Code §10506.4)
Existing law defines "best value," for purposes of the UC, as a
procurement process whereby, the lowest responsible bidder may
be selected on the basis of objective criteria with the
resulting selection representing the best combination of price
and qualifications. (Public Contract Code § 10506.5)
Existing law establishes a pilot program to authorize the Los
Angeles Unified School District (LAUSD) to use a best value
procurement method, before December 31, 2020, for public
projects that exceed $1 million, and requires submission of
specified reports on the use of this procurement method.
SB 1214 (Allen) Page 2
of ?
(Public Contract Code § 20119 - 20119.7)
ANALYSIS
This bill:
1) Expands the authority of the UC to use best value
contracting beyond its campuses and medical centers to
include all locations of the UC.
2) Deletes obsolete reporting requirements.
3) Deletes the sunset on the authority of the UC to use the
best value procurement method, thereby extending this
authority permanently.
4) Makes several technical and conforming changes.
STAFF COMMENTS
1) Need for the bill. The existing law, which authorizes the
University of California (UC) Best Value Pilot program
sunsets on January 1, 2017. According to the author,
without this bill, the UC will forego the ability to employ
a contractor selection method that provides significant
opportunity for cost avoidance. The UC estimates that these
projects were completed with a demonstrated savings of
about 3 percent.
2) UC Best Value Pilot Program. SB 667 (Migden, Chapter 367,
Statutes of 2006) established a Best Value Pilot program
for the UC. Initially authorized for five years, the bill
allowed the UC San Francisco to award contracts based on
the best value for the university. Under this process, UC
prequalifies bidders, then evaluates the bid based on
answers to a separate best value questionnaire and assigns
a qualification score. UC then divides each bidder's price
by its qualification score. The lowest resulting cost per
quality point represents the best value bid.
In a report to the Legislature, in January 2010, the UC
reported that 23 contracts totaling $158.3 million were
issued under the Best Value Pilot program. Of the 23
SB 1214 (Allen) Page 3
of ?
contracts, 12 contracts were low bid contracts. According
to the report, the "University Representatives for all
these projects [four completed and two almost completed
projects] have been unanimous in their praise of this
process that has already demonstrated numerous advantages
such as decreased bid protests and communication problems,
decreased the need for multiple inspections and re-work,
decreased disputes, change order requests, claims and
litigation and increased incentives for contractors to
perform their work safety and to adhere to high labor and
quality standards." UC concludes that the Best Value Pilot
program fosters better quality work, less labor and safety
problems, better qualified persons/contractors, better
on-time completion, and better on-budget performance. In
2011, SB 835 (Wolk, Chapter 636, Statutes of 2011),
expanded the authority to all UC campuses, including
medical centers, and extended the sunset from January 1,
2012, to January 1, 2017.
In its December 18, 2015 report, the UC reports that of the
320 construction contracts awarded since January 1, 2012,
40 totaling $1.19 billion were awarded through the Best
Value Pilot program, representing 13 percent of overall
projects. The UC cites numerous advantages of this process
including decreased bid protests, improved communication
with contractors, reduced re-inspection and re-work, fewer
disputes, change order requests, claims and litigation.
The UC notes that the selection criteria it uses for best
value procurement rewards contractors for maintaining
strong safety and labor compliance standards and delivering
high quality workmanship. The UC also notes that its best
value contractor selection was met with nearly unanimous
praise from the design and contracting community.
3) Prior legislation. AB 1185 (Ridley-Thomas, Chapter 786,
Statutes of 2015) established a Best Value Pilot program at
the Los Angeles Unified School District (LAUSD). The
provisions of AB 1185 were generally based upon provisions
authorizing the Best Value Pilot program for the UC, but
codified more prescriptive requirements around labor,
contractors and subcontractors, and the weighting of
certain factors in the evaluation of bids.
SUPPORT
SB 1214 (Allen) Page 4
of ?
University of California
OPPOSITION
None received.
-- END --