BILL ANALYSIS Ó
SB 1214
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SENATE THIRD READING
SB
1214 (Allen)
As Amended June 23, 2016
Majority vote
SENATE VOTE: 27-9
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Higher |11-0 |Medina, Baker, | |
|Education | |Chávez, Irwin, | |
| | |Jones-Sawyer, Levine, | |
| | |Linder, Low, | |
| | |Santiago, Weber, | |
| | |Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |17-3 |Gonzalez, Bloom, |Bigelow, Jones, |
| | |Bonilla, Bonta, |Wagner |
| | |Calderon, Chang, | |
| | |Daly, Eggman, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Holden, Obernolte, | |
SB 1214
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| | |Quirk, Santiago, | |
| | |Weber, Wood, Chau | |
| | | | |
| | | | |
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SUMMARY: Extends 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. Specifically, this bill:
1)Extends the sunset by one year, until January 1, 2018, on the
authority of the UC Regents to use the best value procurement
method for projects over $1 million at all its campuses and
medical centers.
2)Deletes obsolete reporting requirements.
3)Makes several technical and conforming changes.
EXISTING LAW:
1)Authorizes, until January 1, 2017, a pilot program at the UC
to award construction contracts over $1 million, on a "best
value" basis, rather than just to the lowest bid (Public
Contract Code (PCC) Section 10506.4).
2)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 (PCC Section 10506.5).
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3)Requires the UC Regents, on or before January 1, 2016, to
submit a report to the appropriate policy committees of the
Legislature and the Joint Legislative Budget Committee,
regarding the UC's best value pilot (PCC Section 10506.8).
4)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 (PCC
Sections 20119 - 20119.7).
FISCAL EFFECT: According to the Assembly Appropriations
Committee, based on the results to date of UC's use of best
value procurement, the university could realize additional
significant savings in contract and contract administration
costs for the additional year that this authority is extended
under this bill.
COMMENTS: History of UC Best Value Pilot. SB 667 (Migden),
Chapter 367, Statutes of 2006, created the UC Best Value Pilot,
authorized for five years, solely at UC's San Francisco campus
(UCSF). SB 667 allowed UCSF 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.
Senate Bill 835 (Wolk), Chapter 636, Statutes of 2011, extended
the sunset in SB 667 and expanded the best value pilot to all UC
campuses and medical centers for five more years; with a status
report due to the Joint Legislative Budget Committee, on or
before January 1, 2016.
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According to the UC "Report on the Best Value Construction
Contract Pilot Program", issued in December 2015, since January
2012, UC awarded over 320 construction contracts totaling $4.05
billion. Forty of these contracts, or 13%, totaling $1.19
billion, utilized the best value construction authority.
Additionally, the report finds that given the additional time
and administrative requirements associated with the best value
selection process, the UC screens its projects carefully to
maximize the value obtained from said process.
To note, according to the author's office, when SB 835 was
initially debated in the Legislature, some legislators expressed
concerns that granting best value authority to the UC would
allow for subjectivity and favoritism to enter into the
selection process. However, according to the report, "To date,
no bidder, or third-party for that matter, has protested any
qualification score determined by the University's BV [best
value] Contractor Selection scoring committees." Lastly, the
report finds that UC's best value pilot has fostered improved
cooperative project administration, better quality work, less
labor and safety violations, better qualified contractors, more
on-time completion of projects, and increased on-budget
performance.
Need for the measure. According to the author, "Best Value
contracting is far more effective at selecting contractors who
will provide the lowest finished cost as opposed to selecting
contractors on the basis of the lowest first cost." The author
contends that best value contracting has been met with praise
from the design and contracting community and that the loss of
UC's authority to offer best value contracting would be to the
detriment of students, patients, researchers, faculty, and the
taxpayers of California.
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Related legislation. SB 667 (Migden), SB 835 (Wolk) - as
described in the "History of the UC Best Value Pilot" section of
this analysis, and AB 1185 (Ridley-Thomas), Chapter 786,
Statutes of 2015, which, among others, authorizes the Los
Angeles Unified School District to utilize a best value
procurement process as a pilot project until January 1, 2021,
for construction projects over $1 million.
Analysis Prepared by:
Jeanice Warden / HIGHER ED. / (916) 319-3960
FN: 0003786