BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1214|
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UNFINISHED BUSINESS
Bill No: SB 1214
Author: Allen (D)
Amended: 6/23/16
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
SENATE FLOOR: 27-9, 5/9/16
AYES: Allen, Beall, Block, De León, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara,
Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Pan,
Pavley, Roth, Vidak, Wieckowski, Wolk
NOES: Anderson, Berryhill, Cannella, Fuller, Moorlach,
Morrell, Nguyen, Nielsen, Stone
NO VOTE RECORDED: Bates, Gaines, Huff, Runner
ASSEMBLY FLOOR: 66-12, 8/25/16 - See last page for vote
SUBJECT: University of California: Best Value Construction
Contracting Pilot Program
SOURCE: Author
DIGEST: This bill extends the sunset date on the authority of
the University of California (UC) to use the best value
procurement method at all its campuses and medical centers to
January 1, 2018.
SB 1214
Page 2
Assembly Amendments extend the sunset to January 1, 2018, for UC
to use the best value procurement method, rather than
permanently extending that authority.
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
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 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)Extends the sunset on the authority of the UC to use the best
value procurement method to January 1, 2018.
4)Makes several technical and conforming changes.
Comments
SB 1214
Page 3
Need for the bill. The existing law which authorizes the 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.
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 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
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Page 4
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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
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.
SUPPORT: (Verified8/25/16)
State Building and Construction Trades Council
University of California
OPPOSITION: (Verified8/25/16)
None received
ASSEMBLY FLOOR: 66-12, 8/25/16
AYES: Alejo, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta,
Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu,
Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández,
SB 1214
Page 5
Holden, Irwin, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, McCarty, Medina, Mullin, Nazarian,
Obernolte, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NOES: Achadjian, Travis Allen, Bigelow, Brough, Dahle, Beth
Gaines, Grove, Harper, Jones, Mathis, Melendez, Patterson
NO VOTE RECORDED: Burke, Mayes
Prepared by:Lenin DelCastillo / ED. / (916) 651-4105
8/25/16 17:30:40
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