BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1214|
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THIRD READING
Bill No: SB 1214
Author: Allen (D)
Amended: 3/31/16
Vote: 21
SENATE EDUCATION COMMITTEE: 8-1, 4/13/16
AYES: Liu, Block, Hancock, Leyva, Mendoza, Monning, Pan, Vidak
NOES: Huff
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: University of California: Best Value Construction
Contracting Program
SOURCE: Author
DIGEST: 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.
ANALYSIS:
Existing law:
1)Authorizes, until January 1, 2017, 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)
2)Defines "best value," for purposes of the UC, as a procurement
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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)
3)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.
(Public Contract Code § 20119 - 20119.7)
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.
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
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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 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.
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
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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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
SUPPORT: (Verified4/26/16)
University of California
OPPOSITION: (Verified4/26/16)
None received
Prepared by:Kathleen Chavira / ED. / (916) 651-4105
4/27/16 15:57:26
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